The BHI (National Building Materials Household Prosperity Index, which bespeaks the performance of terminal market of building material and furniture industry in China) in March reads at 71.92, up 29.64 percentage points month-on-month, and down 32.99 percentage points year-on-year, according to the newly published data by the Department of Circulation Industry Development of Ministry of Commerce and the China Building Materials Circulation Association (hereafter referred to as CBMCA) on April 15.
The overall sales volume of Chinese building material and furniture hypermarkets above designated size has reached 32.85 billion yuan in March, with a month-on-month increase of 8438.72% and a year-on-year decrease of 63.84%. The cumulative sales volume in the first quarter of 2020 totals at 93.46 billion yuan, down by 53.45% compared to the previous year.
In 2020, BHI Drops, Sales Reduced
Building Material Market Affected by the Epidemic
According to the interpretation by the Industry Research Department of the CBMCA, China’s building material and home furniture market has accelerated the resumption pace in March with the advancement of national pandemic control and prevention work. As a result, the BHI reading rebounded in March and the market is currently in a stage of steady recovery.However, compared with the same period of last year, both the BHI and the sales volume fell under the impact of the COVID-19 pandemic, which indicates that the "Golden March" in previous years did not reappear as scheduled due to the epidemic, according to the analysis by CBMCA.
Four Building Material and Furniture Malls Closed in the Beginning of 2020AYD, a well-known home furnishings chain mall in China, recently announced the closure of its home furnishings mall in Chongqing City. It is the second AYD home furnishings mall that has been shut down since 2020. Since the outbreak of COVID-19, there have been four well-known building material and furniture malls announcing closure. Some insiders express their worries that more shutdowns are on the way.
AYD Has Two Home Furnishings Malls Closed
On February 23, AYD’s home furnishings mall in Nanchang City, Jiangxi Province, announced closing its branch mall in Xujiafang on March 31. AYD group used to have two home furnishings malls in Nanchang City, one in Jingdong district, the other in Xujiafang. The branch mall in Jingdong has been closed long before. The closure of its mall in Xujiafang indicates AYD’s withdrawal from the Nanchang market. According to the insiders of AYD, AYD’s branch mall in Xujiafang was built in 2007. Since 2016, the mall has been losing money which exceeded 10 million yuan, due to the transformation of roads near the mall and the increasing competition in Nanchang market. As for the Chongqing branch mall, which opened in 2010 as a pioneer to expand AYD’s southwestern market, announced termination of business on May 31. The stores in the mall received notification to clear their goods and move before the date. AYD Chongqing has exempted the stores from paying rents from April to May. In 2019, the Chongqing branch even had launched a new project of building a new mall of 300,000 square meters. With the stoppage of the project and the close announcement, some assumed that AYD is quitting the Chongqing market.
Zhengzhou City, Henan Province: Zhongzhou Building Material Market Closed
On March 18, Zhongzhou Building Material Market in Zhengzhou City notified the 200 stores to move before March 31.
Changcha City, Hunan Province: Easy Home Closed Its Branch Mall
On March 25, Easy Home Building Material issued an announce that its Jinyuan Branch in Changsha City would be closed on May 31 due to severe operational losses and the changing economic environment.
Facing the adversity, more and more building material and home furniture malls turn to online sales. The Easy Home has held cumulatively 20,000 live-stream sales in March, harvesting approximately 130,000 orders with 332 stores involved. Fusen-Noble House launched more than 40 online selling activities and received more than 10,000 orders. Red Star Macalline Home Furniture distributed coupons worth 2 billion yuan to stimulate consumption.
With the advancement of China’s epidemic control and prevention, the building material and home furniture malls are gradually resuming work. Meanwhile, China’s real estate market is also under recovery, meaning that malls with better operational ability, risk control capability, and better service are expected to be the direct beneficiary of the market recovery.
Editor: Lynn Lin