Building & Construction
Since 1980, China’s urban population has risen from less than one in five of the population to just over one half. In 2009, fifteen million people became residents in Chinese towns and cities – this is equal to one person every two seconds! The construction sector is now the core of the nation’s economic development. Factories, warehouses, shopping centers, apartments, municipal buildings, and infrastructure construction projects have become a common sight across a diverse landscape. Architectural styles, once modular and concrete-rich, are evolving into creative displays of cutting edge design, reflecting the high proportion of China’s wealth now invested in land.
To both foreign companies occupying high price point segments, and the ever more competitive local producers, this is a dynamic industry. Questions asked of the construction boom include: How long will it last? Where is it accessible? What are the risks? and Who is regulating it?
The bottom line is that this is a massive sector. Around twenty cents in every dollar of GDP spent is attributed to construction, which totaled over three trillion RMB in 2010. Growth is everywhere and regularly exceeds GDP but competition is ruthless and intense.
Total Area Constructed and Transaction Values by Building Type (China)
Source: China Statistics Yearbook on Construction
Below is a list of products that GCiS have experience in. Target products are not limited to this list.
- Architectural glass
- Commercial & residential heating
- Construction coatings
- Construction sealants & other construction chemicals
- Construction hand tools
- Curtain walls
- Elevators, HVAC, other related machinery and components
- EPS, XPS, Polyurethane (PUR), Phenolic Foam (PF) and other foam insulation materials
- ETICs and other façade systems
- Floor heating & its accessories
- Glass wool, rock wool and other industrial insualtion materials
- Intelligent home systems, such as access control
- Intelligent lighting systems and daylighting panels
- Light steel structure buildings and pre engineering buildings (PEB)
- Membrane-based roofing systems
- Road marking and paint sprayers & system
- Sanitary paneling (FRP)
- Water valves & pipes in commercial applications
Client Needs & Project Background
A large European supplier of adhesives used in a range of construction applications did not have a large presence in the China market but was looking to expand its presence in this market, address a wide range of customer and increase sales. The company did not have local production, though did have a small but effective sales network, and a well-known brand. It needed to understand its opportunities in this market, and how it could best compete with its direct competitors.
This project was both comprehensive and strategic, with the research focusing on much of the value chain- direct competitors, channel players, and customers (mainly contractors), as well as influencers. For contractors, this included both commercial and infrastructure specialists, as the products have application in both areas. With customers there was a heavy focus on field research. In the end, the research showed that opportunities for this firm were mixed, with the best opportunities being in specialty areas such as airports and other high-end projects, as well as certain types of commercial buildings in Tier 1 & Tier 2 cities. Despite the fact that the company has a strong brand, its prices were rather higher than those of its direct competitors, and its existing channel infrastructure was insufficient. GCiS recommended that to be competitive in this market the firm must first build a better and wider ranging sales and channel structure, and we provided concrete suggestions on how to do this.