DIY chains yet to feel at home
When B&Q opened its flagship store in the Pudong area of Shanghai in 2001, the new building was surrounded on all sides by empty land. Now there are high-rise apartment blocks as far as the eye can see.
Engulfed by a massive property boom that shows no signs of abating, China should be a soar-away market for do-it-yourself retailers, a perfect play on the country's burgeoning new middle class. In the space of a decade, Chinese home ownership has gone from zero to about 70 per cent in the east-coast cities.
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Yet home improvement stores have found it hard to crack the Chinese market. B&Q, the British chain that is part of the Kingfisher Group, is one of the few to have succeeded and, even so, its margins are only half those of its operations in Europe. With 50 stores currently, the Chinese business made a profit for the first time in 2003 and contributed ￡300m ($549m) of sales last year and ￡5m of profits.
Foreign retailers have often discovered that the models they have used in other markets - even in other developing countries - do not transfer easily to China. DIY retailers have been a prime example.
The challenge for home-improvement retailers is that there is no tradition of DIY in China. This is partly because labour is so cheap, even in a relatively rich city such as Shanghai, so home-owners have little financial incentive to do the work themselves.
The biggest reason, however, has been the nature of the housing market, which has been dominated by new flats. In most countries, even a brand new home will come with most of the fittings and fixtures already in place. In China, a new flat is usually a concrete shell, with no plasterboard on the walls and only a few wires hanging from the ceiling where the lights should go. That means that new home???-owners have no option but to seek professional help.
"In the UK, most of the customers are doing repair and maintenance on their properties," says David Wei, president of B&Q China. "In China, at least half of the demand comes from new properties."
To cater for this different market, B&Q has had to make big changes to its format. For a start, about one-quarter of revenues come from a contracting service that the company offers, which combines building materials and basic designs for kitchens and bathrooms. B&Q is now the biggest interior designer in China.
The layout of stores also has to be different. In a typical UK store, products will be laid out by category, with electrical sockets in one aisle and light switches in another. Yet as the Chinese customers often have to buy everything, they want the products to match - so they are laid out by brand rather than function.
There are signs, however, that the housing market is beginning to change in ways that could help DIY retailers. Over the last two years in cities such as Shanghai, there has been rapid growth of a second-hand housing market. That means there is a new group of property owners looking to improve rather than establish their homes.
In parallel to this shift in the market, B&Q has begun introducing a new format at some of its stores with a far greater emphasis on soft furnishings, such as curtains, bedding and fabrics. The theory is that a large number of home-owners have moved beyond fitting out their flats with basic necessities and now want to upgrade their living conditions.
"It is a big sign that the market is changing andthat the customers are becoming more sophisticated," says Paul French at Access Asia, a Shanghai-based consultancy.
The company has collaborated with a number of partners to create branded products for its stores. With Hong Kong retailer G.O.D. (Goods of Desire), it has established its own line of furniture, while it has signed a deal with Disney Home to use some of its images for decorating children's rooms.
"Now that people have higher incomes, they are looking for more stylish solutions," says Mr Wei.
The company is also taking some unusual steps to try to foster an appreciation of DIY among its Chinese customers. B&Q is introducing a Kid's Club into all its stores this summer, which will offer simple classes for children in making a box or painting a stool. Classes are also being offered to women in basic interior design.
B&Q may be the market leader, but the sector remains highly fragmented - while there are already a number of foreign competitors in China, the heavy armoury has yet to arrive. Home Depot, the largest DIY group in the US, has no ???-presence yet in China, but it has been talking to Orient Homes, the strongest Chinese company in the sector, about taking a significant stake.
Mr Wei says Home Depot's arrival would not immediately threaten B&Q's market leadership. Although the US group has deep pockets, it would not be able to buy itself a dominant position given the fragmented nature of the sector; and having an efficient global procurement network is not an advantage in China because the cheapest solution is to source most products locally, he says.
"If it cannot leverage its capital or procurement strengths, then Home Depot will not have any obvious advantages in the China market," says Mr Wei. "But we do respect them and whatever move they make will have an impact on the market."
家装市场：“自己动手”不容易
当
百安居(B&Q)上海浦东新区旗舰店2001年开张时，这座新建筑四周都是空地。而现在，周围凡是看得到的地方，到处都是高层住宅楼。
席卷中国的大规模房地产热潮丝毫没有减退的迹象，在10年时间里，中国东部沿海城市的房屋拥有比例已经从零升至约70%。对这里的“自己动手”(DIY)零售商而言，如果充分利用中国新兴的中产阶级，中国应当会成为它们发展神速的市场。
然而，家装商店却发现很难打入中国市场。英国翠丰集团(Kingfisher)旗下的英国连锁店百安居，是少数几家成功的企业之一，即便如此，该公司在中国的利润率也只有其欧洲业务的一半。目前拥有50家门店的百安居中国业务在2003年首次盈利，去年的销售额为3亿英镑（合5.49亿美元），利润500万英镑。
外国零售商经常发现，很难把自己在其它市场――甚至是其它发展中国家――使用的模式引入中国。DIY零售商的经历便是最好的例证。
家装零售商们面临的挑战是，中国没有DIY传统。其中的部分原因在于，（中国的）劳动力非常廉价，即便在上海等相对富裕的城市也是如此，所以房主们没有自己动手的经济动机。
然而，最主要的原因在于以新房为主的中国住宅市场的特性。在大多数国家，即便是全新的房屋，也有大部分的配套设施。在中国，新房通常只是一个混凝土的空壳，墙上没有石膏板，只有在天花板装灯具的地方垂下来几根电线。这意味着新房主别无选择，只能寻求专业人士的帮助。
“在英国，多数顾客是为了修缮住宅，”百安居中国总裁卫哲(David Wei)表示，“而在中国，至少一半的需求来自新房。”
为迎合这个不同的市场，百安居不得不对其模式做出重大调整。首先，约有四分之一的收入来自该公司提供的合同服务。这种服务将建筑材料和厨卫基础设计结合在了一起。百安居目前是中国最大的室内设计企业。
门店的布局也必须有所不同。在典型的英国门店，产品按类别摆放，插座和开关放在不同的走道。然而，因为中国消费者往往必须买齐所有的东西，他们希望商品能够配套――所以商品是按照品牌、而不是按功能分类摆放的。
不过有迹象表明，住宅市场正开始向可能有利于DIY零售商的方向转变。过去两年，上海等城市的二手房市场发展迅速，这意味着出现了一个新的房产所有者群体，他们希望改善自己的住所，而不是全套装修。
为顺应这种市场转变，百安居已开始在旗下一些门店引入新的模式，将更多重点放在窗帘、床上用品和布艺等软装潢上。其理论是，许多房主已经超越了用基本必需品来装备房屋的阶段，他们目前希望改善居住条件。
咨询公司通亚(Access Asia)的保罗?弗伦奇(Paul French)表示：“这是一个重要迹象，表明市场正在变化，顾客日益成熟。”通亚是总部位于上海的一家咨询公司。
百安居与多个伙伴展开了合作，为其门店打造品牌产品。通过与香港零售商G.O.D.( Goods of Desire)的合作，百安居创建了自己的家具品牌。该公司还与Disney Home签订了协议，利用后者的部分卡通形象来装饰儿童房间。
卫哲表示：“既然人们收入提高了，他们就希望找到更时髦的解决方案。”
该公司也在采取一些与众不同的措施，试图培养中国顾客对DIY的欣赏。今年夏天，百安居将在所有门店推出儿童俱乐部(Kid’s Club)，为儿童提供制作盒子或粉刷凳子的简单课程。该公司还为女性提供基础的室内设计课程。
百安居也许是市场领导者，但整个行业仍然非常散乱――尽管中国市场上已经有许多外国竞争者，但重量级公司尚未进入。美国最大的DIY集团家得宝(Home Depot)目前还没有在中国开展业务，但该集团已经与东方家园(Orient Homes)就收购后者大量股权事宜进行了商谈。东方家园是该行业实力最强的中国公司。
卫哲表示，家得宝进入中国不会立即危及百安居的市场领先地位。尽管这家美国集团资金雄厚，但考虑到该行业的细分性质，该集团无法通过收购而占据主导地位。他表示，拥有高效的全球采购网络在中国并不是一种优势，因为最廉价的解决方案是在本地采购多数产品。
“如果家得宝不能利用其资金或采购方面的优势，那么它在中国市场就不会拥有明显优势，”卫哲表示。“不过，我们非常尊重它们，无论它们采取什么举措，都将对该市场造成影响。”
