CASE STUDY 01

European home

furnishing company

Client: European home furnishing company

Industry: Premium and luxury interior furniture

Region: Major Chinese cities

Objective/Challenge

The brand had originally entered China using a local retail partner but given the perceived market opportunity it wanted to buy the business back from the partner but had no idea of the market size and potential in China.

Our challenge was to assess the market size in China for modern European high-end furniture currently and its potential over the coming 10 years; how much of this market could the brand potentially gain and what would be the risks and challenges they would face doing this.

The existing partner and the brand principal agreed that an independent assessment was needed.

The strategic approach

Due to a lack of market data available pertaining to the consumers of European furniture and the number of homes that could potentially be addressed by a premium European furniture brand, FDKG needed to assess all potential data related to housing, affluent consumers, other suppliers both domestic and international working in or addressing the sector and the geographical distribution of future potential markets in China.

The work considered and assessed plans for new residential developments at price points that would indicate that the buyers could afford furniture at these levels. Store locations and future target cities that were most likely to contain suitable consumers disposed to purchase modern European furniture. Given the growth in the numbers of affluent consumers in China our work also assessed marketing approaches and challenges that might be necessary as the market grew. It was also necessary to assess the potential investment costs of growing the business and whether a direct sale or a franchise model would be a better option.

Outcome/results

As a result of our work, both the brand principal and the local partner had access to a clear, totally independent and detailed assessment of the potential market in China and

the costs to develop it, so that they had the foundation on which they could agree financial terms, transition and then grow the business.
Our challenge was to assess the market size in China for modern European high-end furniture currently and its potential over the coming 10 years; how much of this market could the brand potentially gain and what would be the risks and challenges they would face doing this.