How can the flooring industry get out of the low-profit state?

How can the flooring industry get out of the low-profit state?

The flooring industry is currently facing a critical challenge: overcapacity and declining profit margins. To break free from this low-profit state, many companies are rethinking their strategies, with a growing emphasis on product design as a key driver for differentiation and value creation. In an increasingly competitive market, simply producing more isn't enough — innovation and style are now essential to stand out.

Design has become a crucial factor in determining a company's success. Leading global brands invest heavily in research and development, often allocating 5% to 15% of their total output value to product innovation. For a company generating 500 million yuan in revenue, this could mean investing between 25 to 75 million yuan in R&D. However, in China, few flooring companies follow this model. Most still prioritize production and marketing over design, leading to a lack of unique identity and long-term growth potential.

Transformation is no longer optional — it's a necessity. At the heart of this transformation lies brand building, and at the core of brand building is design. A strong, distinctive design style can create a powerful competitive edge in the market. Companies that fail to adapt risk being left behind. Leaders in the flooring industry must make bold decisions, embrace change, and focus on developing their own design language. While this shift may be difficult, it's essential for long-term survival.

One company that has taken this approach is Jiuzheng Building Materials Co., Ltd. They believe that building a strong brand culture and a clear design identity is the only way forward. By transforming into a center for floor design R&D and operations, they've not only expanded their manufacturing capabilities but also invested in creative talent and product innovation. This strategy has helped them build independent brands and establish a solid presence in the domestic market.

Ultimately, profit in the flooring industry comes from brand value, which is built through years of consistent product marketing and quality design. The core of any successful product is its design — both in terms of aesthetics and material selection. Therefore, every flooring company should prioritize design as a central part of its operations. Unfortunately, many still allocate more resources to marketing than to creative development, which limits their ability to innovate and grow in the long run.

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