Industry overview of the home decor market in China

[Data source: qianzhan.com, “Size of home decor market in China”]

The home decor market in China shows a steady upward trend and is gradually entering  a more mature stage. The size of the Chinese home decor market has exceeded 2 trillion yuan. It is predicted that the market size will reach 2.59 trillion yuan by 2020, maintaining a compound annual growth rate of about 7%. Since the reform in 1998, the Chinese home decor market has experienced the stages of concept initiation, policy reform, and standard-setting. The State Council of China released “the Guiding Opinions on Actively Promoting the ‘Internet Plus’ Action Plan” in July 2015. The home decor industry vigorously responded to the policy on “Internet Plus” transform and upgrade. Currently, the home decor market in China is still mainly driven by new apartment owners. However, with the continuous development of China’s urbanization process, the demand for renovating old homes is increasing in recent years, especially in first-tier cities.

Consumer demographics of the Chinese home decor marketChinese home decor’s primary customers consist of men and women born in the 80s (33%) and 90s (27%). 87% of customers born in the 80s are married and have children, while 65% of customers born in the 90s are unmarried. According to a survey, customers born in the 70s and 80s prefer practical and eco-friendly decorated homes while the younger pay more attention to smart home and personalized trendy decorations. For all age distribution of customers, a simple, clean and practical home is at the top of the list.

Information customers care about while decorating their home

Budget, decoration style, experience from others, environmental indicators, furniture style and brand are the top 5 elements that people most concern in the process of home decoration. For overall style, around a quarter of customers like modern minimalist or ‘Nordic simplicity’ style, known as beiou fengge (北欧风格) in Chinese . At the same time, over 20% of people don’t have a specific pursuit of style. People lay great emphasis on healthy and eco-friendly home decor products, and this is reflected in that they will seek information about environmental indicators, considering the safety of decoration materials and ensuring the health and environmental protection during construction. In addition, more and more people pay attention to smart home and high-tech elements of electrical appliances. 

Customized home decoration products are increasingly welcomed

In a wave of consumption upgrade, customized home decoration products are more and more welcomed in the Chinese home decor market. As shown in a survey, over 70% of people will choose customized productions during the whole process of home decoration. 55% of researched consumers state that they want partially customized home furniture, while 17% of them choose a whole-house customized solution. Besides the advantage of saving time and cohesive style, a whole-house solution can make the home look more high-end and custom-made. Although still at an early stage of development, such a solution is more prevalent in people born in the 70s and people who lived in first-tier cities. 

Elements of choosing home decoration companies in China

Reputation, customer services, the quality of materials, and price-performance ratio are the core elements that consumers will take account of when selecting home decoration companies in China. Customers in the Chinese home decor market are more rational, and people will also consider the various aspects of home improvement companies like whether the products are eco-friendly, whether the designs are reasonable, etc.   However, there is a lot of negative feedback toward home decoration companies in China. According to a survey, consumers are unsatisfied or concern with the home improvement companies in the following contents: the quality of materials and work, extra charge, hidden contract traps, construction delay.  

The rise of the Chinese e-commerce home-decorating market

[Data Source: 2019 Tencent market research and industry analysis, “The type of decoration company used in the process of home decoration”]

Although the traditional home-decorating is still the mainstream, the Chinese e-commerce home-decorating market is booming. Among the total consumers surveyed, 77% of them choose the traditional home decoration, while 9% of them choose e-commerce home decoration, and the rest of them adopt two types of decoration more or less evenly. Nevertheless, it seems that e-commerce home decoration is more favored by people born in the 90s and people who live in first-tier cites.    Consumers list convenient purchasing experience, high price-performance ratio, many varieties, discounts and home delivery as top 5 advantages of Chinese e-commerce home-decorating. And the primary cons are poor information transparency, bad after-sale service and non-guaranteed quality of materials.

High acceptance of advertisements for home decoration

Due to the demand for information, home improvement advertisements are generally accepted by Chinese consumers. In a survey question about the response of online ads for home improvement, around half of people who are in demand of decorating home state that they will read the ads and look through the introduction of products, while over 30% of them will click the link and favorite the ads page. For the online advertising channels, ads on digital social medial are most popular, and over 30% of people can accept ads in WeChat moments, WeChat public accounts, news APPs like Tencent News and Toutiao (TopBuzz) and short-video APPs like Tencent Video and Tiktok. So, in order to reach their target customers, merchants can take advantage of multiple channels to advertise.  

Promotion strategy of home decoration companies in China

With the trend that millennials are becoming the primary consumers, home decoration companies and suppliers should know and understand the needs of these customers to win the market. Tips for marketing to millennial home-owners First, based on consumer insight, build segmentation strategies targeted at different customer groups. Those with family may be more concerned about safety, while those in high-tier cities may be more concerned with appearance. Second, monitor and optimize the outcome of ad serving by leveraging the power of digital platforms.Third, integrate online and offline channels to promote effectively. Most millenials are avid users of social media platforms like WeChat.  Last, focus on new core demand like decoration style, eco-protection, smart home and price-performance ratio to satisfy the needs of different customer segmentation.

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Sustainable buildings in China are a part of a greater development strategy

Throughout the last three decades, China has experienced unprecedented and hasty urbanization. The country developed approximately 2 billion square meters of new buildings each year. Many of the buildings have been criticized for not being energy efficient due to little insulation and insufficient heating/cooling systems. As the largest contributor of CO2 emissions worldwide, the Chinese government is making large efforts to reduce pollution and become greener. The committee of construction energy saving declared the implementation of sustainable buildings in China in now treated as a country developing strategy.

Green building development in China can save resources, reduce pollution, and create a relatively healthy living environment. According to the Ministry of Housing and Urban-Rural Development, China’s green building evaluation standards divide green buildings into three levels: one star, two stars, and three stars. The evaluation of green buildings mainly focuses on the elements of “four sections and one environmental protection”, namely energy saving, land saving, water saving, material saving and environmental protection. 

The Ministry of Finance has issued relevant documents and other policies, urging both the government and other departments to strengthen coordination to accelerate the development of eco architecture in China. For example, national economic and social development planning outline for 2011–2015 formally proposed that the construction industry should promote green buildings and eco architecture. Local governments of first-tier cities also developed economic incentives to increase the growth rate of green buildings in China.

China’s national policy supports green buildings development

The government is planning that at least half of new buildings will follow the green standards by 2020. Following through on these commitments would grow the country’s green building sector from 5 to 28 percent by 2030, representing a $12.9 trillion investment opportunity. Besides, this will enable to enhance society production of 500 billion RMB and would create at the same time 5 million additional jobs. 13th Five Year Plan also specifies pilot programs for constructing and renovating energy efficient primary and secondary schools, community hospitals and public buildings. As the national Five Year Plan is cascaded to provincial and municipal jurisdictions, nearly 20 cities have set even more ambitious targets. For example, Changde, Zhenjiang, Zibo, Wuxi, and Suzhou, Shanghai, Beijing, Shenzhen, and Chongqing require all new commercial buildings to be green buildings. In the pursuit of more sustainable buildings, more than 90% of China’s commercial building owners plan to have at least one net or near-zero energy building in the next ten years.

By the end of 2016, more than 20,000 green buildings were built. According to data released by the China Real Estate Association, as of the end of December 2017, a total of 10.927 green building indication projects were evaluated nationwide, an increase of more than 3,000 over the previous year. 

[Data source: qianzhan, ‘Construction projects of green buildings in China 2015-2019’]

Loans for green buildings in China are rising steadily

Government and banks promote green financial mechanisms such as green bonds, green credit, and green funds to develop eco architecture in China. Around 118.34 billion yuan is required to complete the 2 billion square meters green buildings target. The energy-saving upgrading of existing residential buildings is estimated to cost 350 billion yuan and the reconstruction of public buildings requires 60 billion yuan. The total demand for financing of green building in China will exceed 600 billion yuan.

Report released in December 2017 by the former China Banking Regulatory Commission (CBRC) showed that 21 major Chinese banks had issued green credits totaling RMB 8.22 trillion among 12 green categories in the first half of 2017. For green buildings was issued a total of RMB 730 billion in green credits from 1H 2013 to 1H 2017.

In terms of green bonds, there are two types of them: labeled (issued by diversified companies) and unlabeled (pure-play issuers). The issuance of green construction bonds in China began in 2017, with a small total number of issuances. In that year, only five were issued with a total size of 4.51 billion yuan. In 2018, the number increased to 12 green construction bonds with a total amount of 8.72 billion; in the first half of 2019, bonds for green buildings development in China totaling 2.2 billion yuan. Over the past two years, China has issued 15.43 billion yuan of bonds invested in green construction.

[Data source: tanpaifang, ‘Bonds for green buildings in China 2017-2019’]

SOARING DEMAND FOR GREEN BUILDINGS IN CHINA

Due to fast economic development, the urbanization rate in China will increase from 50% in 2012 to 70% in 2030, indicating a significant demand for new buildings in urban areas. Every year the total area of new buildings is up to 2 billion square meters, consuming 40% of the world’s cement and steel. Besides, buildings in China have a relatively short life expectancy of about 30 years, while in European countries it is around 80 years, and 44 years in the USA. Consequently, it is critical to initiate green building efforts so as to alleviate the potential impacts from the building sector.

Sustainable buildings in China have different degrees of improvement in indoor air quality, thermal environment, light environment, and acoustic environment. Higher rents, energy and water efficiency, better air quality, sustainability, lower operation cost, a high-quality work environment－all these factors have facilitated overall comfort and driven demand for green buildings in China.

Drivers of the green building market in China

The latest report shows that the growth of green buildings market in China is largely driven by customer demand, environmental regulations, and health-minded communities. The market achieved a five-fold increase in share from 5% to 28% by 2018. New eco homes, hospitals, and public schools are seen as the three most important areas of green building growth. Increasing consumer demand has turned the green buildings market in China into an industry with an output value of 15 trillion yuan in 2017. 

[Data source: Smart Market report, ‘Triggers driving green buildings activity in China’, 2018]

Due to soaring demand, green buildings companies increase their influence in China’s construction market. Recently, Times Media released TOP20 of China’s green housing companies in 2019. The total green building areas of Vanke, Country Garden, and China Evergrande reached 35.02 million square meters, 34.2 million square meters, and 31.31 million square meters, respectively, ranking among the top three. The green building area of ​​the three leading real estate companies totaled 105.3 million square meters.

New building standards in major cities contribute to the growing demand

 Chinese standards require a reduction of the total land used for building construction. Moreover, because of energy shortages and dependence on fossil fuels in China, standards have rigid requirements for energy saving and energy structure optimization for building sectors. Additionally, they require an increase in total green area (trees or grass), namely, total greening rate should be higher than 30% of the total project floor area. In 2019, more than 2,400 projects with an area of more than 133 million square meters were participating in LEED (Local Economic and Employment Development). According to the organization of LEED (Local Economic and Employment Development), green buildings can save 40% of water, 70% of deserting material and reduce carbon emission by around 35%.  In 2019 LEED-certified space in Beijing, Shanghai, Suzhou and Shenzhen totaled 43 million square meters.

[Data source: LEED in progress, ‘LEED certification in Chinese cities (Sqm of certifications (million))’, 2019]

The implementation of green building standards is becoming more and more stringent in various places, and major cities such as Beijing, Shanghai, Guangzhou, and Shenzhen have proposed that land acquisition must meet the two-star domestic green building. It contributes to a demand in the green buildings market in China.

High capital value of sustainable buildings in China

In the past three years, the average capital value of green buildings is higher than non-green ones. Strong demand, good tenant allocation, and higher rents also have a positive impact on the capital value of green buildings. For example, office buildings with green certification usually have higher rents than the market rents of traditional office buildings. From the perspective of energy conservation and environmental protection, green buildings have an advantage in attracting high-quality tenants. At the same time, high-quality tenants and the green premium of rents have a positive impact on the capital value of the property and the return on investment.

Building owners point out that green buildings, whether newly built or remodeled, result in a 7% increase in asset value over traditional buildings. For example, from 2012 to 2018, the stocks of green office buildings in Shanghai increased by 9.1 times. Moreover, most of future construction projects plan to apply for green building certification and enter green buildings market in China. In the past three years, the average capital value of green office buildings in Shanghai has been higher than that of non-green office buildings. In the third quarter of 2018, the average capital value of non-green office buildings in the city was 69,680 yuan per square meter, while the capital value of green-certified office buildings reached 76,411 yuan per square meter, with a premium rate of 9.7%.

China is a global leader in green buildings

Eco architecture in China is based on the constant stimulation of government policy, the constant innovation of scientific research, continuous improvement in the standard system, and continuous technological innovation. Green buildings are moving seeing new dynamics. Today, 80% of domestic green projects are located in the top 10 Chinese provinces showing the potential growth expected by less developed cities of China. Green building growth will also be accompanied by the development of larger amount of green commercial buildings since today only 30% of total green buildings are commercial. At the end of 2016, China had selected more than 4,500 green building assessment identification projects, accounting for more than 500 million square meters of green buildings. According to 2017 China Green Building Report, the green buildings development in China has been accepted by more and more property developers and local governments.

This has already made China the world’s second-largest market for LEED-certified projects, trailing only the United States.  Major developers including Soho China, Excellence Group, Sino Ocean Group and Ping An actively engage in green buildings market in China.

Best green buildings practices: Changning, Wuxi, Suzhou

Changning

Shanghai’s Changning District put in place an energy monitoring platform that tracks 160 of the district’s 165 public buildings. Thanks to the project, 32 buildings have been retrofitted to achieve an average 20 percent energy savings. To encourage the remaining 133 public buildings to renovate, the district is considering using a third-party ranking system to rate buildings on their energy performance. The district also provided $3.34 million in subsidies to help building managers make their buildings more efficient. This lowered the payback period for the private sector, which in turn encouraged them to invest an additional $20.33 million.

Wuxi

City High-Tech Industrial Development Zone is the engine of the Wuxi economy. With 560,000 residents, the zone contributes 17 percent of Wuxi’s economic activity. To drive the construction of energy-efficient buildings, Wuxi issued an innovative investment guidance policy in February 2016: incentives for buildings that meet criteria for green buildings in China: LEED and China’s national three-star rating system.

Suzhou

As China continues to urbanize, entire new cities are being built from scratch. Suzhou Taihu New City in Jiangsu province is one example. Currently in the planning and design stages, Suzhou Taihu New City will house 200,000 residents and focus on high-end service industries such as education and training, research and development, tourism and finance. All of Suzhou Taihu New City’s buildings designed to receive at least a two-star rating for green buildings in China. The city also will boast a green building demonstration area, constructing several projects such as zero-energy schools and monitoring their energy performance.

Liuzhou: The world’s first forest city

[Source: Stefano Boeri Architetti, ‘Liuzhou forest city. Masterplan’]

In 2020, China plans to begin the construction of the world’s first Forest City in Liuzhou, Guangxi Province, China. The Liuzhou forest city is planned to house more than 40,000 trees and 1 million plants of more than 100 species, for its 30,000 residents which will absorb almost 10,000 tons of carbon dioxide and 57 tons of pollutants, and produce approximately 900 tons of life-giving oxygen annually.

The forest city will also be self-sufficient and will help to decrease the average air temperature, improve local air quality, create noise barriers, generate habitats, and improve local biodiversity in the region. The whole city will run on renewable energy especially solar and geothermal, according to its planners.

The Liuzhou authorities want to build about 70 buildings cascading with foliage which will have homes, hospitals, hotels, schools and offices. It is the country’s first attempt to control notorious pollution.  The Liuzhou forest city is a pilot in a series of mini sustainable cities that could become a template for future green buildings development in China.

Challenges in the green building market in China

Over the last few years, the Chinese have been developing a real interest in “green buildings” but they are meeting some obstacles and challenges. Sustainable buildings in China are finding it more difficult to attract clients due to misunderstandings of the green building concept. In 2014, the newest version of green buildings standards was published by the government to clarify the meaning of green building. The Chinese tend to believe green buildings are only high-end buildings with better facilities. Some consider green buildings as a long-term investment with immediate rewards. They are not aware of the more natural and more comfortable living environment of green buildings. This is why in the coming years green building developers will need to accompany their campaign with strong marketing but those are still demand for higher governmental subsidies. In 2016 China’s green building investment gap was nearly 2 trillion yuan.

Lack of environmental awareness hinders the development of green buildings

Despite the using of LEED certification system, the green building concept does not always make it to the Chinese market. Under the new environmental requirements people are debating on the costs and rewards of green buildings. Lack of understanding of green buildings and misaligned incentives are the prime reasons why the adoption of green buildings slowed down in China.

The environmental awareness of different stakeholders has a significant impact on the development of green buildings in China. Builders often base their construction decisions on short-term costs, such as material and labor cost, instead on energy efficiency or green building techniques which offer long term savings. The significant energy saving is tied to an increase in costs, the global leader in real estate service CBRE estimated additional costs for green buildings below 4% however the LEED says those vary between 0.4% and 12.5%. Experts claim the 2% additional cost is enough to reach standards. Constructors are relieved by the CBRE latest report stating that in big cities of China, green buildings are sold at a price 1.5 to 25.7% compared to other buildings. Some developers in China may not see immediate cost savings and often overlook the green features—such as better insulation and sealed windows—that could help the government meet its energy targets. This is especially true in the multi-family residential buildings that most people in urban China live in.

The popularity of green buildings is growing, but the percentage in the construction market is still small

At the 5th China Green Smart Real Estate Forum (2019) many experts said that green buildings market in China has great potential, and its value can reach US $17.5 trillion. Green buildings are undoubtedly an important approach for the Chinese building industry in terms of environmental responsibilities and market benefits, but green buildings market in China still has a small scale and eco architecture in China is not so popular. Still, sustainable buildings make up a small percentage in China’s construction market that is more interested in maximizing profits and lowering building costs, compromising sustainable design and energy efficiency considerations.

However, green buildings market in China has a great potential. More and more construction companies turn to a green development. According to professor at the University of Sheffield Kangjian, “The real green building is building have a balance of nature, human and expenditure. Is something that can benefit people right now.”

[Data source: qianzhan, ‘Proportion of green buildings projects in China’s construction firms (forecast for 2021)’]

Daxue Consulting can offer a wide range of services to create your competitive marketing strategy. To know more about the green buildings market in China, do not hesitate to contact our dedicated project managers by email at dx@daxueconsulting.com.

Author: Valeriia Mikhailova

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China is carrying out the process of creating ‘Smart Cities’. A smart city is an urban area that uses various kinds of information and communication technologies to increase operational efficiency and manage resources. Smart cities in China are comprised of smart technology. Smart technology is technology that makes use of digital technology and Artificial Intelligence (AI) to enable a level of cognitive awareness to perform functions that have traditionally been done by humans. This technology can make decisions without human intervention and employs machine learning and big data analysis to do so. IoT or the Internet of Things, is a prime example of how smart technology in China has developed. The rapid development of digital technology has allowed China to become the leader in technological races such as the race for 5G, and the development of China’s construction industry. Smart technology plays an integral role in the development of smart buildings in China.

Over the last 30 years, the country has taken on an overwhelming amount of construction projects to become the base of its modern urban landscape. Traditional urban infrastructure is not enough to keep up with the rate of China’s rapid urbanization. The smart building industry in China consists of applying smart technology to architecture, using new forms of materials, and improving sustainability. Thus, buildings have been and are becoming more multifunctional and environmentally friendly.

When compared to the United States, China took on a different approach to implementing smart buildings. China is focused on new construction, whereas the United States is focused on adding new technology to buildings that already exist. Smart buildings, often referred to as Intelligent urban infrastructure or Intelligent buildings, are a key feature of a smart city. A smart building is one that uses automated processes to automatically control the building’s operations.

Priorities of Smart Buildings in China

Improving sustainability and building tenant experience are all priorities of the smart building industry in China. To make buildings smarter, various digital technologies collaborate to provide companies with greater insights. These insights then enable the construction companies to better plan, design, construct and manage the infrastructure. Through reducing water and waste, efficient energy use, and building green spaces, smart cities in China are increasingly sustainable. Improving building tenant experience lies within the use of IoT tools to make the building comfortable and attractive to its potential tenants such as central ventilation systems for obtaining high indoor air purification capacities.

Technology of Smart Buildings in China

 Smart technology in China plays a significant role in the development of smart buildings. Smart technology allows for building automation, or the automatic centralized control of a building’s heating, ventilation and air conditioning, lighting and other systems through a building management system.  The Internet of Things (IoT), Artificial Intelligence (AI), and Building Information Modeling (BIM) are three main kinds of technology used.

The Internet of Things

IoT technologies are important to smart construction because they are tools that could provide potential benefits through real-time data monitoring such as temperature sensors, climate monitoring tools, air pollution levels, and security and surveillance systems. With IoT, companies achieve regulatory compliance and improve cost management. Through IoT solutions, machine learning and apps are used to make things more efficient.

Artificial Intelligence

As previously mentioned, Artificial Intelligence (AI) allows for technology to obtain a level of cognitive awareness. This means that AI can mimic how the human brain understands objects and environments, or what is termed deep learning. Through the recognition of patterns and correlating those patterns, computers can recommend conditions for improvement and maintenance for the building. AI apps are being used to collect amounts of massive of data through the processing of data collected from IoT tools. AI systems learn from any patterns present and use those patterns to make decisions for the building.

Building Information Modeling

Building Information Modeling (BIM) enables a company to gather various kinds of data on a building for analyzation to then guide efficiencies and improve operations. It can collect data from environmental information to resident usage habits, and so on. This data allows for easier planning and pre-emptive analysis to help with problem anticipation and resource maximization.

Smart buildings that can use less energy when supply is short and can store energy when it is plentiful are pursued in China. Buildings whom have been recognized by the government as an energy-saving building, or a green building, are awarded the LEED Gold certification. One example is the Siemens Center Shanghai (SCS).

Examples of smart buildings in China:

Glumac, Shanghai — Glumac is a Tetra Tech company and leader in sustainable design for building environments by providing expertise in sustainability and technologies and creating systems that optimize energy efficiencies and minimizing environmental impact.  Glumac’s office is the first LEED Platinum v4 facility in East Asia and the first to pursue Living Building Certification for Net-Zero Energy, Water and Carbon. The building features an indoor air monitoring system that allows employees to see the toxicity levels of the indoor air on their mobile devices, 5 air purification systems, and a planted green wall to filter out outside pollution that enters the building.

Johnson Controls Asia-Pacific headquarters, Shanghai — Johnson Controls is a digital solutions company that offers building products, technologies, software, and services for the development of smart buildings. The Johnson Controls Shanghai headquarters received the IFC-World Bank Group’s EDGE (Excellence in Design for Greater Efficiencies) Certification, U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) Platinum Certification, and the China Green Building Design Label Three Star Certification. Its sustainable design includes a central plant, renewable energy and intelligent lighting. Building materials include FSC certified wood and locally sourced products. Hybrid and electric vehicle charging stations are another feature of the headquarters which allows employees to commute with a reduced carbon footprint.

Smart buildings are the building blocks of smart cities in China

Overall, the trend of smart buildings in China is one that will continue to drive its urban landscape. As the rate of urbanization increase, the construction of new modern building will increase not only in size but will also improve in design. In the design of smart buildings, integration is key. The buildings should be able to address factors of safety, security, networking, easy monitoring and maintenance while using data driven operations. The develop of such buildings leverage the Internet of Things, Artificial Intelligence, and Building Information Modeling among many other digital technologies and big data. Smart buildings are transforming Chinese cities from those of heavy consumption to conservation—saving energy and resources— while increasing productivity, performance, and adaptability.

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Caterpillar’s struggles in China

Even though China’s recent increase in interest rates has slowed the Chinese construction industry, the country remains as one of the largest market for excavators. Market studies show that last year, Sany maintained its dominance in this market with a total market share of 11% for excavators compared to Caterpillars 7%. Caterpillar, the global industry leader, struggled to gain market share in the Chinese construction boom from 2008-2012. Although Caterpillar’s excavator sales quadrupled from 2005-2010, its market share shrunk from 11% in 2005 to 7% in 2012. Ed Rapp, a group president at Caterpillar, recently stated, “the best way to beat the Chinese outside of China is to compete and win with them inside of China.”  Despite this, Caterpillar is struggling to compete with China’s domestic manufacturers like Sany as shown by its recent write-down in the value of a Chinese mining-equipment manufacturer it bought last year.

Obstacles impede Sany’s entrance into the U.S. market

Similarly to Caterpillar’s struggle in China, Sany is struggling to penetrate the U.S. market. Although the company opened a factory in the U.S. in August of 2011, its lack of a dealership network poses as an immense obstacle in its entry into the U.S. market. The new Sany plant can produce about 20,000 excavators per year, but currently produces only about half of that due to the lack of demand. Since opening the factory, Sany has sold only a few hundred excavators compared to the 24,000 sold in the U.S. last year. In addition, the company lacks the core skill and technology to build some of its parts, which it purchases from other companies. This puts Sany at a disadvantage to companies like Caterpillar, especially in an unfamiliar market.

Sany is working hard to improve its presence outside of China as it hopes to attain its goal of $47 billion revenues within 10 years. Despite the company’s reliance on the Chinese market, international sales have increased in recent years.  Sany is also looking for more acquisitions and joint ventures to diversify its product line and increase sales. Sany’s investors applauded its 2012 acquisition of German Putzmeister, a manufacturer of concrete pumps. Due to increased competition in China and uncertainty in foreign markets, Sany’s future is unclear, but the company hopes that its recent string of ambitious endeavors will pay off.

Sources:

CNN

Wall Street Journal 1

Wall Street Journal 2

Forbes

Sany official website

This article Market Study in China: Sany looks to reduce dependence on Chinese market is the first one to appear on Daxue Consulting - Market Research China.