China's medium and high-end bathroom market space is growing rapidly

Posted on April 01 2022

According to the latest report of Pew Research Center, the middle-income class in mainland China has increased by 2 in the 10 years after 2001. 0.3 billion people, but more than three-quarters of mainlanders still have low incomes. The lower the income, the lower the consumption level, which is the constant law of the market economy, and this also explains why e-commerce can quickly capture the hearts of Chinese people. At present, nearly 80% of the people in China are still in the low-income stage. With the development of economy and the improvement of living standards, the proportion of middle and high-income groups is expected to further expand, which also means that there is still a lot of room for growth in the middle and high-end sanitary ware Market.

    Development direction of medium and high-end sanitary ware manufacturers

    In fact, the number of the richest class in China has always been expanding. From the sales performance of medium and high-end sanitary ware, the performance of large listed sanitary ware companies has increased rapidly. Obviously, the purchasing power of the rich class has not been weakened, but on the contrary, it is in the rising channel. In the field survey of sanitary ware stores, there are too many middle and high-end sanitary ware stores in sanitary ware stores in many Prefecture and municipal cities, which also shows that the growth space of middle and high-end sanitary ware is indeed not small.

    E-commerce is rising rapidly as a low-cost channel

    Nearly 80% of the people in China are still in the low-income class. Naturally, they are extremely sensitive to the price of sanitary ware. At this stage, new low-cost channels will naturally flock. This can explain why bathroom e-commerce is developing vigorously. Even if e-commerce problems continue, sales still increase sharply.

    Indeed, income determines expenditure. An article on a website points out that the cost of traditional sanitary ware sales channels is high and the price is relatively expensive. Naturally, fewer people are willing to go to sanitary ware stores to buy sanitary ware. Traditional channels always bear cost pressure in the competition with emerging e-commerce channels. How to reduce the sales cost of traditional channels is a problem that sanitary ware factories must think about. If the cost cannot compete with emerging channels, it is difficult to be optimistic about the sales of traditional channels in the future. Especially after e-commerce has better solutions to its problems, traditional channels will bear greater pressure.

    On the one hand, high-end sanitary ware still has ten times the growth space. From the development experience of the United States and Japan, if China can successfully get rid of the middle-income trap and leap into the ranks of rich countries, the proportion of the richest class should account for about 10% of the total population. At present, the proportion in China is only 1%. In other words, there is still ten times more room for growth.

    On the other hand, there is still two to three times the growth space for middle-end sanitary ware. In recent years, due to the reduction of the working population, sanitary ware manufacturers have to increase the wage expenditure of employees. With the further reduction of the working population, this wage growth trend will not slow down, but accelerate. From the experience of developed countries, the proportion of China's middle class is not high enough, and there is at least twice the growth space. If various measures are in place and social development is benign, there is still three times the growth space.