BIG International Study Project
          China 2006
       University of Groningen

Akzo Nobel Decorative Coatings China
...
Research Objective

   To present Akzo Nobel an overview of the decorative
 coatings market in the greater Shanghai and Be...
Research Question

• What is the Chinese decisionmaking and buying
  process for paint like, which parties are involved an...
Research Defining

• Retail market

• Interior wall paint

• High-end consumers   Low-end consumers

• North China   E...
Conceptual Model

                                       Geography
                                                       ...
Research methods

• Qualitative data;
             » Desk research;
               books, internet, weblogs, reports, maga...
Field research

• Interviewed/visited
       Employees of Akzo Nobel (8)
       Dutch Embassy
       Coating associatio...
Some research pictures
Yi Shan Road
Research Overview

                                             China




Development                        Decorative co...
Background
---- The distribution of population and cities in China
GDP per capita in 1980
---- The differentiation of regions by GDP per capita in China
GDP per capita in 1990
---- The differentiation of regions by GDP per capita in China
GDP per capita in 2000
---- The differentiation of regions by GDP per capita in China
GDP per capita in different cities
                      across China

                                                   ...
China GDP Growth outlook
GDP growth in Shanghai area
             2004                             2003                             2002




Distri...
Demographics
                      Shanghai                                    Beijing

Permanent population: 17.42 millio...
Distribution of age in Beijing and Shanghai


                                                       Distribution of age i...
Internet Usage China




                                                  Internet users year 2000: 22.5
               ...
Decorative coatings market China
Characteristics of Coatings
               Industry in China

• The paint market has existed for less than 10 years
• Acce...
Size of decorative coatings market
• In 2005 the general output increased 17.7% to 1.335 million tons
  (Official)  Asiac...
Trends on the decorative coatings market

•    Demand will rise due to:
          1. Real estate market growth (broadening...
Market parties model 1
               Manu-
             facturers:
            Akzo Nobel
                 &
            ...
Market parties model 1
               Manu-
             facturers:
            Akzo Nobel
                 &
            ...
Competitors
Active brand awareness



80%                            Nippon
70%                            ICI/Dulux
60%              ...
Nippon Paint (1)



•   Founded in Japan in 1881
•   Number one coatings company in Asia
•   Biggest and oldest company in...
Nippon Paint (2)

      Strengths                   Weaknesses
   Advertisement                Transportation
First mover ...
ICI/Dulux (1)

•   ICI/Dulux focuses only on mid and top segments

•   In 2002 ICI/Dulux entered the Chinese market and
  ...
ICI/Dulux (2)

    Strengths                    Weaknesses
 International image    Price competition due to
              ...
Huarun (1)
•   Huarun Company was established in 1991 (Beijing: 2002,
    Shanghai: end-2004)
•   Huarun focuses on main c...
Huarun (2)

     Strengths                Weaknesses

  Cooperation with       Advertisement
 DuPont, BASF and
       Baye...
SWOT Analysis Levis
                    Strengths                                                 Opportunities
Internatio...
Competitor prices
                            ICI in B&Q                                         NIPPON in B&Q    ( Y/5 L)...
Comparison of different brands
                   Levis             Nippon           ICI/Dulux            Huarun

Customer...
Market parties model 1
               Manu
             facturers:
            Akzo Nobel
                 &
            C...
Model 1A


             Hypermarkets




              Decoration
               markets


  Con-
                        ...
Definition of decoration markets

• Hypermarkets are big shops or kind of malls where consumers
  can buy construction mat...
Hypermarkets
Hypermarket chain: B & Q

• Worlds 3rd largest home improvement
  business has its headquarters in the
  UK
• B&Q is alrea...
Facings B&Q Beijing
Brand                   Type                            Shelves   Price in RMB per 5 L
Nippon (11 ½ sh...
Facings B&Q Tianjin

Brand                   Type                     Shelves   Price in RMB per 5 L
Nippon (2 shelves)   ...
Home Mart

• Home Mart is a domestic retailer and the second
  largest in China

• All Home Marts have arranged the same p...
Facings Home Mart Beijing
Brand                   Type                                  Shelves   Price in RMB per 5L
Nipp...
Orient Home
•   Orient Home is one of China‘s largest home improvement retailers, operating
    twenty-six chain stores (y...
Facings Orient Home Beijing (1)

Brand                     Type                           Shelves   Price in RMB per 5 L
N...
Facings Orient Home Beijing (2)
ICI/Dulux               2nd generation 5 in 1        ½   239
                        emuls...
Facings Easy Home Beijing
Brand                   Type                            Shelves   Price in RMB per 5 L
Nippon (8...
Facings conclusions

• MS Nippon in hypermarkets: 49.5/156 = +/- 32%
• MS ICI/Dulux in hypermarkets = 46.5/156 = +/- 30%
•...
Salesmen in hypermarkets

• 75% are employed by manufacturer

• Nippon and ICI/Dulux train their sales employees

• Salesm...
In-shop promotion


• Billboards
• Promotion stands (outside)
• Samples
• Information books
• Certificate of good quality,...
Advertisement in hypermarkets
Orient Home Beijing
Information book of Nippon
Future challenges for hypermarkets

•A big challenge facing B&Q, and its rivals in China, is
that most customers are not d...
Construction Material Markets

• Mainly located in suburbs and smaller cities
• More popular in smaller cities than in big...
CMM in Suzhou
Consumers of a CMM

• About 65% is sold to the pro-market:
  decoration companies and painters. They
  want to build a lon...
Trends & Future

• Until 1997 CMM sales were growing. After 1997 MS of
  CMMs decreased because of the introduction of the...
Small (specialized) shops

•   Nippon, ICI/Dulux and Huarun have
    mono shops, shops where only one
    brand is sold.
•...
Market parties model 1
            Manufactur
               ers:
            Akzo Nobel
                &
            Com...
Model 1B

                Design
              companies




  Deco
              Painting
companies                 Worke...
Definitions of painting practices

• Design and Decoration companies can be contacted by home
  residents to paint their h...
Categorizing design & decoration
                   companies
1)   Design company

2)   Middle class decoration company

3...
Design companies

• A design company can be contacted by a company,
  the government or by (rich) home residents

• Design...
Low and middle class decoration company

• A decoration company is mainly working for home residents

• Sometimes they do ...
Location

• Design and decoration companies are located in big
  cities

• Almost all hypermarkets have a decoration centr...
Categorization of consumers of a
          design/decoration company

1.   Families with an income > 90 000 yuan
     per ...
3 options for consumers

1. HR  design/decoration company company is
   responsible for painting job and supply of paint...
Painters

• Most painters are employees of design/decoration companies or
  of a specific paint brand. There are no specia...
Results interviews workers

•   Most workers work alone
•   In smaller cities more people go to a worker than in the big c...
Results workers; Most important
            characteristics of paint


1.   Quality
2.   Brand Image
3.   Price
4.   Color...
Market parties model 1
               Manu-
             facturers:
            Akzo Nobel
                 &
            ...
Respondent profile
Survey data

                 City of residence

                                                                         ...
Family income in sample

      Family income per month in RMB


                                   Less than 3.000
      5...
Results
How often do people in China paint
                  the interior of their houses?
                                       ...
How often do people from North
           and East China paint the interior of
                    their houses?
         ...
How often do people in China paint
the interior of their houses in 1st, 2nd and
               3rd tier cities?
          ...
Comparison on times painting of
       people with different ages
                                                   How o...
How much money do people spend on painting
               the interior of their houses in RMB?
                           ...
How much money do people spend on
painting the interior of their houses North and East
China?                             ...
How much money do people spend on
      painting the interior of their houses in 1st, 2nd
                    and 3rd tier...
Which brands do people buy?


    Conclusion                                                                         Who b...
Which brands do people from North and East
                   China buy?


                                          Which...
Which brands do people from 1st, 2nd and 3rd
             tier cities buy?
                                               ...
Would people paint more often if paint was
                        cheaper?




                                          ...
Relationship between bought houses and
          painted when surrendered

                Painted * Rentedorboughthouse C...
How many times do people that live
              in rented or bought houses paint
                         their house?
Co...
What are the rented/bought ratio’s in Beijing
                 and Shanghai?

                                            ...
Paint deciding, buying and
      doing process
What is the first thing you do after you have
                             decided to paint your house?
                  ...
What is the first thing people in North and
East China do after they have decided to paint their
                      hou...
Report Akzo Nobel Deco China
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Report Akzo Nobel Deco China

  1. 1. BIG International Study Project China 2006 University of Groningen Akzo Nobel Decorative Coatings China Supervisor: Wilfried Brouwer Authors: Dirk-Jan ter Horst Emma Lok
  2. 2. Research Objective To present Akzo Nobel an overview of the decorative coatings market in the greater Shanghai and Beijing area in order to help Akzo Nobel improve their strategic market position in these areas;  The market parties of the demand and supply side  The relations between these market parties  Trends and developments  To provide Akzo Nobel with suggestions on how to influence these market parties
  3. 3. Research Question • What is the Chinese decisionmaking and buying process for paint like, which parties are involved and how are these interrelated? • What are the specific needs of the different market parties for paint products and services?
  4. 4. Research Defining • Retail market • Interior wall paint • High-end consumers   Low-end consumers • North China   East China • 1st tier cities   2nd & 3rd tier cities
  5. 5. Conceptual Model Geography Demographics Politics Comp. B Beijing Culture S Comp. D A U E P Akzo M Laws Nobe Distribution P l A L N Y Comp. I D Comp. II Shanghai Community Technology Economy
  6. 6. Research methods • Qualitative data; » Desk research; books, internet, weblogs, reports, magazines, master theses » Interviews with all market parties and external experts » Observation » Action research; acting like a consumer • Quantitative data; » Desk research; internet, books, Chinese statistical yearbook 2005 » Questionnaires (home residents, painters & exit) » Facings in paint shops
  7. 7. Field research • Interviewed/visited  Employees of Akzo Nobel (8)  Dutch Embassy  Coating association  Experts (6)  Competitors (3)  Hypermarkets (8)  Salesmen in hypermarkets and small shops (8)  Shopowners (8)  Decoration companies (5)  Painters (23)  Home residents (534)
  8. 8. Some research pictures
  9. 9. Yi Shan Road
  10. 10. Research Overview China Development Decorative coatings market s till China 2011 Supply and demand of paint in the deco coatings market Shanghai & Beijing Relations between the parties in the deco coatings market in Shanghai and Beijing Influences on the relations between these market parties
  11. 11. Background ---- The distribution of population and cities in China
  12. 12. GDP per capita in 1980 ---- The differentiation of regions by GDP per capita in China
  13. 13. GDP per capita in 1990 ---- The differentiation of regions by GDP per capita in China
  14. 14. GDP per capita in 2000 ---- The differentiation of regions by GDP per capita in China
  15. 15. GDP per capita in different cities across China Beijing GDP per capita (2004) 28 700 RMB. Expectation 2010: > 40000 RMB Expectation 2020: > 80000 RMB 1984-1994 1994-2004 2003 2004 2004-2008* GDP (CAGR) 9,40% 8,30% 9,30% 9,50% 8% * = Expected
  16. 16. China GDP Growth outlook
  17. 17. GDP growth in Shanghai area 2004 2003 2002 Districts GDP(billion) Rate of GDP(billion) Rate of GDP(billion) Rate of Increase( Increase( Increase( %) %) %) Xu Hui 8,687 14,7 7,574 14,35 6,623 12,14 Bao Shan 26,597 22,5 20,621 23,1 15,054 15,2 Hong Kou 6,52 14,2 5,71 13,7 5,02 15,2 Pu Dong 178,979 16,4 150,388 17,5 125,116 16,7 Song Jiang 34,351 30,6 25,25 35,2 18,008 19,2 Su Zhou 345 17,6 280,2 18 208 14,5 Kun Shan 57 24,5 43,037 31,5 30,5 32,8
  18. 18. Demographics Shanghai Beijing Permanent population: 17.42 million Permanent population: 14.93 million (2004) (2004) Density: 2750 inhabitants per sq. km Density: 888 inhabitants per sq. km (2004) (2004) Ratio male-female: 96.62 Ratio male-female: 105.1 (Semi) illiterate: 6.54% (10.63% of (Semi) illiterate: 4.48% all females) Statistical Yearbook 2005, www.wikipedia.org
  19. 19. Distribution of age in Beijing and Shanghai Distribution of age in Beijing and Shanghai (2005) 50,00% 45,00% 40,00% 35,00% 30,00% Beijing 25,00% Shanghai 20,00% 15,00% 10,00% 5,00% 0,00% 0-17 18-34 35-59 60+ •http://www.bjstats.gov.cn/sjfb/pcsj/rkpc/200607/t20060704_45118.htm, http://www.stats-sh.gov.cn/2003shtj/tjnj/nj06.htm?d1=2006tjnj/C0308.htm
  20. 20. Internet Usage China  Internet users year 2000: 22.5 million  Internet users year 2005: 123 million  CAGR 2000-2005: 40.5%  Penetration rate Beijing (2005): 28.0%  Penetration rate Shanghai (2005): 26.6 % http://www.cnnic.net.cn, http://www.internetwrldstats.com/stats3.htm#asia
  21. 21. Decorative coatings market China
  22. 22. Characteristics of Coatings Industry in China • The paint market has existed for less than 10 years • Acceleration in development • Company centralization • Advance of technical development ability • Build-up of brand consciousness • The main distribution channels: CMMs and specialized shops • Moving from the east to the west
  23. 23. Size of decorative coatings market • In 2005 the general output increased 17.7% to 1.335 million tons (Official)  Asiacoat estimates 1.7 million tons • The retail market size has possibly reached 1.0 million tons in 2005, growth rate is about 19% • Expectation 2010: output will reach 2 million tons • Architectural coatings take up a 50% output of all coatings in China Area Yangzi River Delta Zhu River Delta Bo sea area Other area (around Shanghai) (around Guangzhou) (around Beijing) Output 1146400 ton 833900 ton 612400 ton 388800 ton Percentage 38.45% 27.97% 20.54% 13.04% www.asiacoat.com, Coatingol.com(Chinese name:Tu Liao Zai Xian), www.coatingol.com/news/nwsview.asp?nsid=27481
  24. 24. Trends on the decorative coatings market • Demand will rise due to: 1. Real estate market growth (broadening of cities) 2. Shorter redecoration cycles, because of improving living standards, despite improved quality 3. Government deregulation boosting home ownership by 30% a year • Concentration of market  top 8 market share grows • Desire for better-quality materials • Top and mid segment will relatively grow faster than low segment. 1 =Annual Report on Paint & Coatings Industry (2005)
  25. 25. Market parties model 1 Manu- facturers: Akzo Nobel & Competitors Home residents Painting Decoration practice markets
  26. 26. Market parties model 1 Manu- facturers: Akzo Nobel & Competitors Home residents Painting Decoration practice markets
  27. 27. Competitors
  28. 28. Active brand awareness 80% Nippon 70% ICI/Dulux 60% Hua Run Goldfish 50% PPG/Master's brand 40% Dashi 30% Levis 20% IVY 10% Other 0%
  29. 29. Nippon Paint (1) • Founded in Japan in 1881 • Number one coatings company in Asia • Biggest and oldest company in China (1993) • Innovative product breakthroughs (Colour Tinting System ) • Biggest distribution network • Focus on protecting the environment • New generations of continuously upgraded products • Long range of products under the same brandname • Nippon sees ICI/Dulux as only competitor • High end: 15 %, Mid end: 50% and low end 35% of total sales
  30. 30. Nippon Paint (2) Strengths Weaknesses Advertisement Transportation First mover advantage Communication with retail shops Distribution network Severe competition between agents R&D  amount of Only known in Asia researchers is double ICI/Dulux‘s Brand awareness
  31. 31. ICI/Dulux (1) • ICI/Dulux focuses only on mid and top segments • In 2002 ICI/Dulux entered the Chinese market and introduced different colors • ICI/Dulux had an explosive growth in sales because:  They introduced paint which is better for people‘s health  They introduced 5 functions in paint  They had USP and advertisement  Good quality
  32. 32. ICI/Dulux (2) Strengths Weaknesses International image Price competition due to overdistribution Brand awareness Strong imitation brand: Dashi Strong advertisement concepts Distribution network
  33. 33. Huarun (1) • Huarun Company was established in 1991 (Beijing: 2002, Shanghai: end-2004) • Huarun focuses on main cities in provinces • Huarun is the only company paying attention to the safety of painters  uniforms • Nationally Huarun has got 1000s of painters on their payment roll. In Shanghai this number is 150 • Not advertising, but service is their credo • In Huarun shops only Huarun paint is sold • Huarun top segment brand is Idol  Only brand on Chinese market with 0% VOC, mid and top segment brand is Huarun • Small shops are Huarun‘s main distribution channel • Distributors get professional training provided by the company, because they need to be able to give service next to selling paint
  34. 34. Huarun (2) Strengths Weaknesses Cooperation with Advertisement DuPont, BASF and Bayer Spray painting service Domestic image and extra service in shops Chinese company
  35. 35. SWOT Analysis Levis Strengths Opportunities International brand image Government continues to open up and diversify the property market, so the home improvement market grows Growth market with G8 only accounting for 30% MS Middle class is upcoming and willing to decorate more often and requires better quality Leading coating company brand image Customers don‘t know much about paint and its price In second tier cities the big two brands are not that well established as they are in first tier cities Home ownership rises  more houseproudness Weaknesses Threats Low brand awareness Dominant players, Nippon and ICI, don‘t want more competitors to enter, thus they will higher entry barriers, e.g. price war Distribution network  no coverage Domestic brands like Huarun are also focusing on quality. Therefore the quality gap between domestic and foreign brands becomes Poor service (information sharing, website, paint service) smaller. Competition becomes tougher Perceived quality More companies will probably increase their focus on marketing Money available for investment
  36. 36. Competitor prices ICI in B&Q NIPPON in B&Q ( Y/5 L) Super Clean Plus 198 RMB/ 5 L EVERYDAY MATT, FRESH COLOURS 118 PERFORMANCE MATT, BEAUTIFUL COLOURS 158 Super MATT 5 in 1 238 RMB/5 L SUPER RESISTANCE TO DIRTY (超强抗污?) 188 2nd Generation 5 in 1 Emulsion 278 RMB/5 L SUPER ELASTY 3 IN 1(超强弹性3合1?) 208 Gold 5 in 1 Emulsion 308 RMB/5 L LONG-LAST FRESH COLOR 5 IN 1(亮丽持久5合1?) 228 A953-65000 Diamond 5 in 1 338 RMB/5 L GOLDEN 5 IN 1 318 ALL IN 1 368 All in One 378 RMB/5 L CLEAN SMELL AND FULL EFFECT(净味全效?) 398 Master’s in B&Q (RMB/ 1 GALLON) Huarun in B&Q 46-2 222 RESISTANT TO FIRE(水性膨胀型防火乳胶?) 72 RMB/4KG 46-1010 288 SUPER CLASS (爱的馨之爱伏白特级内墙?) 209 RMB/7KG 46-150 298 PAINTING ESPECIALLY FOR SPRAY(润佳喷 186 RMB/5L 涂专用乳胶漆?) 46-410 302 RESISTANT TO VIRUS 3 IN 1(居适安抗菌三合 186 RMB/5L 46-160 318 一内墙漆?) 46-450 332 RESISTANT TO DIRTY 5 IN 1 (家适洁之抗污 186 RMB/5L 46-510 336 五合一?) 46-187 348 SUPER MATT 10 IN 1 (居适雅十合一豪华哑光 186 RMB/5L 内墙?) 46-460 352 46-6 368 46-487 382
  37. 37. Comparison of different brands Levis Nippon ICI/Dulux Huarun Customer High end Low, mid and Mid and high Mid and high customer high end end customers end customers, focus customers downtown residents Strategic 1st tier cities 1st tier cities 1st tier cities 2nd tier cities, investing in focus service, mouth- to-mouth adv. Strengths Quality Colour, Functionality, Quality and distribution service network, advertisement Distribution Hypermarkets Hypermarkets Hypermarkets Mainly small CMMs and small CMMs and small CMMs and small shops shops shops shops
  38. 38. Market parties model 1 Manu facturers: Akzo Nobel & Competitors Home residents Painting Decoration practice markets
  39. 39. Model 1A Hypermarkets Decoration markets Con- Small struction specialized material shops markets
  40. 40. Definition of decoration markets • Hypermarkets are big shops or kind of malls where consumers can buy construction materials for their home improvement. There are many shelves with different types of paint, can sizes, colors and brands. A hypermarket is also called a Buy It Yourself market (BIY). Hypermarkets are mainly located in the big cities • Construction Material Market are one or more streets with many specialized construction shops in the same neighbourhood. Usually CMM’s are located in suburbs of big cities and in smaller cities. • Small (specialized) shops are small paint shops, usually located on a CMM, where you can buy one ore more paint brands.
  41. 41. Hypermarkets
  42. 42. Hypermarket chain: B & Q • Worlds 3rd largest home improvement business has its headquarters in the UK • B&Q is already China's biggest chain by sales. • Steve Gilman, head of B&Q International, wants to have 75 stores in 30 Chinese cities by the end of 2008. • B&Q wants to turn suppliers into partners. Nippon Paint makes B&Q own-label paint, which earns a margin of over 20% for the retailer, compared with 6% for an independent brand.
  43. 43. Facings B&Q Beijing Brand Type Shelves Price in RMB per 5 L Nippon (11 ½ shelves) All in one (old) 1½ All in one (new) 1 398 (highest turnover,most expensive) 5 in 1 1 Everyday matt 1 Performance matt 1 Easy clean ½ 3-1 elastic ½ Super matex 3 5 in 1 matt 1 228 (sells highest quantity) Different paints (small cans) 1 ICI/Dulux (8 shelves) Set of 3 cans 1 All in one 1 Diamond 5 in 1 Dulux realife 1 5 in 1 Gold 1 308 (sells most) 2nd generation 5 in 1 1 278 (sells best in whole market) 5 in 1 Ultra mat 1 5 in 1 super clean plus 1 198 Duraguard (color lasts long 1
  44. 44. Facings B&Q Tianjin Brand Type Shelves Price in RMB per 5 L Nippon (2 shelves) Nippon 5 in 1 (new) ½ 228 Nippon 5 in 1 (old) ½ 228 Nippon (whole package) 1 ICI/Dulux (4 shelves) Dulux 5 in 1 1 318 Dulux divers 1 Dulux (whole package) 2 888/738 per 15 L
  45. 45. Home Mart • Home Mart is a domestic retailer and the second largest in China • All Home Marts have arranged the same prices with dealers • Four years ago Levis introduced two special products in the mid-segment for Home Mart • Nowadays people can buy Levis in 10 out of the 14 Home Mart hypermarkets in Shanghai
  46. 46. Facings Home Mart Beijing Brand Type Shelves Price in RMB per 5L Nippon (4 shelves) Odour-less all in one ½ 398 All in one ½ 368 Gold 5 in 1 ½ 318 New 2nd generation super 5 in ½ 249 1 Easy Clean ½ 198 S5000 interior wall emulsion ½ 168 All kinds of interior wall painting 1 ICI/Dulux (4 shelves) All in one ½ 378 Gold 5 in 1 ½ 308 All kinds of interior wall painting 1 2nd generation 5 in 1 emulsion 1 288 Super clean plus 1 208/4.45L Levis (1 shelf) Extra low VOC interior wall ½ 342 paint Dampproof and resist dirty ½ 259.2
  47. 47. Orient Home • Orient Home is one of China‘s largest home improvement retailers, operating twenty-six chain stores (year 2004 stat.) • By the end of year 2004, the annual sales volume had reached 3.3 billion RMB • The services of Orient Home include do-it-yourself, do-it-for-me and also support professional customers • OrientHome gives a lowest price guarantee. • There is no link from the site of Orient Home to the Levis site, which is possible for Nippon and Masters‘ brand. An example of sales of Levis paint in Nanfang store Brand Sales value in RMB per year Orient Home’s margins on: Levis 700,000 -800,000 Nippon:10%; Nippon 3,000,000 Dulux 15%; Levis 18% ICI/Dulux 3,700,000
  48. 48. Facings Orient Home Beijing (1) Brand Type Shelves Price in RMB per 5 L Nippon (9 ½ shelves) Odour less 1 398 All in one 3½ 368 (718 for 10 L) 5 in 1 1 308 Super 5 in 1 2nd generation 1 276 (889 voor 18 L) 3 in 1 ½ 286 Matex M600 ½ 138 Multi purpose alkaline ½ 198 resistance wall sealer Colour creations ½ 219 High performance ½ 275 (also small cans for 53) architectural coating Multi purpose wall sealer ½ 258 ICI/Dulux (8 ½ shelves) All in one 1½ 378 Gold 5 in 1 emulsion 1½ 309 Anti bacteria 5 in 1 ½ 299 Alkali resisting wall sealer ½ 426/10L Ultra matt 5 in 1 emulsion 1½ 238
  49. 49. Facings Orient Home Beijing (2) ICI/Dulux 2nd generation 5 in 1 ½ 239 emulsion (old) Divers small cans; all in ½ 0.89 liter: all in one (99), one, 2nd generation 5 in 1 2nd generation 5 in 1 emulsion, gold 5 in 1 emulsion (89), gold 5 in 1 emulsion, all in one anti emulsion (89), all in one bacteria anti bacteria (79) Advanced wall painting ½ 148 (in Chinese) Super clean plus 1 198 2nd generation 5 in 1 ½ 289 emulsion (new) Huarun (2 shelves) Red 1 288 Bue ½ 238 Yellow ½ 169 Levis (1 shelf) Divers: Silk decor, Mat 1 Silk decor (299), Mat decor, Euro decor, décor (239), Euro décor Coloriginals silk decor, (269), Levis gold 0.75 liter coloriginals mat décor, (349), 0.25 liter Levis gold, Deco clean, (149),Deco clean (328), Acry Levis satin, Laque Acry Levis satin (329), satin lak, Sikkens Laque satin lak (259), Sikkens (2 cans for 660)
  50. 50. Facings Easy Home Beijing Brand Type Shelves Price in RMB per 5 L Nippon (8 shelves) All in one (old) 2 3 in 1 1 Matex M600 1 2nd generation 5 in 1 1 Color creations 1 Wall sealer 1 Different paints (small cans) 1 ICI/Dulux (9 shelves) All in one (old) 2 All in one (new) 1 Superclean 1 2nd generation 5 in 1 (old) 1 398 (gold), 238 (matt) 2nd generation 5 in 1 (new) 2 Divers small cans 1 Most expensive small can is 120 Divers 5L cans 1 Huarun (2 shelves) 3 types 2 Levis (2 shelves) Deco clean, Euro decor, satin 2 Gold can 388/0.75L, Matt deco lack, Levis Gold paint (small 240, Deco clean 286, Deco can), Levis matt deco, deco cover 265, 328 (new), Euro cover, deco clean decor 268
  51. 51. Facings conclusions • MS Nippon in hypermarkets: 49.5/156 = +/- 32% • MS ICI/Dulux in hypermarkets = 46.5/156 = +/- 30% • MS Huarun in hypermarkets = 4/156 = +/- 3% • Levis in hypermarkets = 4/156 = +/- 3% • Other brands = 52/156 = +/- 33% • Nippon and ICI/Dulux are represented most on promotion shelves • In most shops Nippon has at least as many shelves as ICI/Dulux. However, in B&Q Tianjin Dulux has got more shelves
  52. 52. Salesmen in hypermarkets • 75% are employed by manufacturer • Nippon and ICI/Dulux train their sales employees • Salesmen influence consumers in two areas:  Amount, brand and type of paint  Design/decoration company or painter • Salary and bonuses for salesmen of ICI/Dulux and Nippon are higher than for Levis salesmen
  53. 53. In-shop promotion • Billboards • Promotion stands (outside) • Samples • Information books • Certificate of good quality, safety, environmental friendliness • Interactive computer designing machine
  54. 54. Advertisement in hypermarkets
  55. 55. Orient Home Beijing
  56. 56. Information book of Nippon
  57. 57. Future challenges for hypermarkets •A big challenge facing B&Q, and its rivals in China, is that most customers are not doing the painting themselves. ―Chinese DIY is still really BIY—buy it yourself,‖ admits Mr Wei (B&Q). •Government policy is to build homes that are more finished, so B&Q needs to turn DIY into more of a hobby and the Chinese into a nation of home improvers, like the Americans and British.
  58. 58. Construction Material Markets • Mainly located in suburbs and smaller cities • More popular in smaller cities than in bigger cities • More fake products than in hypermarkets • Lower perceived quality of paint compared to hypermarkets • Packages are bigger (18 or 20 liters or bigger) • Supplied directly by paint manufacturers or by a dealer/wholesaler
  59. 59. CMM in Suzhou
  60. 60. Consumers of a CMM • About 65% is sold to the pro-market: decoration companies and painters. They want to build a long-term relationship with a shop manager and get about 10% -20% discount. • About 35% is sold to home residents
  61. 61. Trends & Future • Until 1997 CMM sales were growing. After 1997 MS of CMMs decreased because of the introduction of the western concept of hypermarkets • More and more people prefer hypermarkets, because they are afraid of fake products and bad quality, allthough prices in CMMs are lower • Hypermarkets are located closer to people‘s homes. • In future the percentage of design/deco companies and painters who buy paint on CMM‘s will grow • Shopowners think their sales will increase with 20% because of all the construction projects. • CMM‘s will upgrade their image  Combination with hypermarket
  62. 62. Small (specialized) shops • Nippon, ICI/Dulux and Huarun have mono shops, shops where only one brand is sold. • Sales of small shops decrease because: • People want a wider range of products because they want to compare prices and products • People want the service and the guarantee of hypermarkets
  63. 63. Market parties model 1 Manufactur ers: Akzo Nobel & Competitors Home residents Painting Decoration practice markets
  64. 64. Model 1B Design companies Deco Painting companies Workers practice Painters
  65. 65. Definitions of painting practices • Design and Decoration companies can be contacted by home residents to paint their homes. These companies can also offer other decorating activities. • Painters are people who are responsible for the painting job and these people have the experience and training for this work. Painters can be employees of a design/decoration company or can work for a specific paint brand. • Workers are people from the street who offer their services, the painting job is one of these services. These people have some experience in painting. Usually these workers are not educated and sometimes they are illiterate.
  66. 66. Categorizing design & decoration companies 1) Design company 2) Middle class decoration company 3) Lower class decoration company Based on: •The amount of designers •The quality & price of the designers •The amount and the quality of the employees (workers) in the database of the company
  67. 67. Design companies • A design company can be contacted by a company, the government or by (rich) home residents • Design companies have a lot of trained and experienced designer employees and usually they design the whole house. The painting job is just a small part of it • The paint is always supplied by the design company
  68. 68. Low and middle class decoration company • A decoration company is mainly working for home residents • Sometimes they do more decorating jobs, sometimes only the painting job (which alone is not really profitable) • Sometimes people buy the paint themselves, sometimes the company supplies the paint • What kind of decoration company one chooses depends on what the consumer wants to pay for the job • Lower class companies have no certificate from the government
  69. 69. Location • Design and decoration companies are located in big cities • Almost all hypermarkets have a decoration centre located in the hypermarket
  70. 70. Categorization of consumers of a design/decoration company 1. Families with an income > 90 000 yuan per year go to a design company 2. Families with an income between 50 000 and 90 000 yuan per year go to a middle class decoration company 3. Families with an income < 50 000 yuan per year go to a lower class decoration company or ask a worker from the street
  71. 71. 3 options for consumers 1. HR  design/decoration company company is responsible for painting job and supply of paint 2. HR  design/decoration company for advice  HR buys paint himself  company is responsible for painting job 3. HR buys paint  design/decoration company  company responsible for painting job
  72. 72. Painters • Most painters are employees of design/decoration companies or of a specific paint brand. There are no specialized paint companies • Huarun offers a free painting job if you buy wooden paintings, facial wall paintings or if a consumer buys more than two cans of paint • Huarun has 1000 paint employees, including 150 in Shanghai. The painters of Huarun uses the more expensive paintspray method • Nippon offers also a free painting job if a consumer buys a specific type of paint, the 3 in 1 paint.
  73. 73. Results interviews workers • Most workers work alone • In smaller cities more people go to a worker than in the big cities • Consumers can find them on the streets of CMMs • First place they buy paint is CMM, second place is hypermarket • They buy the paint at these places because of the guarantee on quality and low prices • Nippon and ICI/Dulux are the most popular brands to work with • They buy these brands because of their image and because the home residents ask for it • The home resident decides (almost) always which brand to use • It is possible for a home resident to bring their own paint • Most workers said that in 50 -75% of the cases their advice will be followed up • The workers think that home residents ask them to do the painting job because the result is better and they are not skilled to do it themselves • In most cases these workers use a paint brush and a paint roller • High season for interior paint is July till September • April till June is off-season
  74. 74. Results workers; Most important characteristics of paint 1. Quality 2. Brand Image 3. Price 4. Color assortment
  75. 75. Market parties model 1 Manu- facturers: Akzo Nobel & Competitors Home residents Painting Decoration practice markets
  76. 76. Respondent profile
  77. 77. Survey data City of residence Age 25 55 Beijing 250 149 Shanghai 200 57 Kunshan Suzhou 150 32 Sijiazhuang 29 Tianjin 100 Other 179 50 0 18-30 31-40 41-50 50+ Gender 300 Distribution of age in various regions 280 260 240 60,00% 220 50,00% 200 180 40,00% North 160 30,00% 140 East 120 20,00% 100 80 10,00% 60 0,00% 40 Younger than Between 31 Between 41 Older than 50 20 30 -40 -50 0 Male Female
  78. 78. Family income in sample Family income per month in RMB Less than 3.000 5% 2% 10% Between 3.001 and 6.000 46% Between 6.001 and 10.000 Between 10.001 and 37% 20.000 More than 20.000 Distribution of income in different cities 80,0% 70,0% Less than 3.000 60,0% 50,0% Between 3.001 and 40,0% 6.000 30,0% Between 6.001 and 20,0% 10.000 10,0% 0,0% Between 10.001 and 20.000 jin ai ng ou n er g ha ijin gh th an ua zh More than 20.000 ns O Be an Ti Su zh Ku Sh jia Si
  79. 79. Results
  80. 80. How often do people in China paint the interior of their houses? 45,0% 40,0% 35,0% 30,0% Average Conclusion 25,0% 20,0% Poor people Middle class people 15,0% Rich people Most people paint their 10,0% 5,0% walls once in 2 – 6 years 0,0% More Once in Once in Once in Less than 2–3 4–6 7 – 10 than once in years years years once in 2 years 10 years Resp. 95% reliability Resp. 95% reliability Resp. 95% reliability Resp. 95% reliability More than once Average in 2 years 16,2% 13,0% - 19,4% 19,6% 14,5% - 24,7% 11,9% 7,7% - 16,1% 14,3% 2,3% - 26,3% Once in 2 – 3 Poor people years 26,9% 23,0% - 30,8% 23,5% 18,0% - 29% 28,6% 22,7% - 34,5% 34,3% 18,0% - 50,6% Middle class Once in 4 – 6 people years 31,3% 27,3% - 35,3% 25,2% 19,6% - 30,8% 38,8% 32,5% - 45,1% 28,6% 13,1%-44,1% Once in 7 –10 Rich people years 13,2% 10,3% - 16,1% 14,4% 9,9% - 18,9% 12,3% 8,0% - 16,6% 11,4% 1,0% - 22,3% Less than once in 10 years 12,4% 9,5% - 15,3% 17,4% 12,5% - 22,3% 8,4% 4,8% - 12,0% 11,4% 1,0% - 22,3%
  81. 81. How often do people from North and East China paint the interior of their houses? How often do people from the North and East of China paint the Conclusion interior of their houses? 1. Most people paint their 35,0% walls once in 2 – 6 years 30,0% 25,0% 20,0% North China 2. People from North China 15,0% East China paint their houses 10,0% 5,0% relatively more often 0,0% More than Once in 2 – 3 Once in 4 – 6 Once in 7 – 10 Less than within 2 years than people once in 2 years years years once in 10 from East China years years Respondents 95% reliability Respondents 95% reliability North China More than once in 2 years 21,9% 16,8% - 27,0% 8,7% 5,0% - 12,3% East China Once in 2 – 3 years 26,3% 20,9% - 31,7% 28,6% 22,8% - 34,4% Once in 4 – 6 years 31,1% 25,4% - 36,8% 31,2% 25,2% - 37,2% Once in 7 – 10 years 10,4% 6,6% - 14,1% 16,5% 11,7% - 21,3% Less than once in 10 years 10,4% 6,6% - 14,1% 15,2% 10,6% - 19,8%
  82. 82. How often do people in China paint the interior of their houses in 1st, 2nd and 3rd tier cities? Comparison of how many times people piant in 1st tier cities and 2nd an 3rd tier cities 40,0% Conclusion 35,0% 30,0% 25,0% 1st tier cities 20,0% 15,0% 2nd & 3rd tier cities There is no big 10,0% 5,0% difference in times 0,0% More Once in Once in Once in Less painting in 1st, 2nd and 3rd than 2-3 once in years 4-6 years 7 - 10 than years once in tier cities 2 years 10 years Resp. 95% reliability Resp. 95% reliability More than once in 2 12,6% - 23,6% 1st tier cities years 14,9% 11,0% - 18,8% 18,1% 21,9% - 34,7% 2nd & 3rd tier cities Once in 2 - 3 years 25,6% 20,8% - 30,4% 28,3% 21,3% - 34,1% Once in 4-6 years 33,9% 28,7% - 39,11% 27,7% 7,5% - 16,9% Once in 7 - 10 years 13,6% 9,8% - 17,4% 12,2% Less than once in 10 years 12,3% 8,7% - 15,9% 12,8% 8,0% - 17,6%
  83. 83. Comparison on times painting of people with different ages How often do people younger and older than 40 years Conclusion paint? 1. Relatively more ‘young 40,0% people’ paint the interior 35,0% 30,0% 25,0% of their houses more than 20,0% Younger than 40 15,0% Older than 40 once in two years 10,0% 5,0% 0,0% 2. Relatively more ‘older More Once in Once in Once in Less people’ paint their houses than 2 - 3 4-6 years 7 - 10 once in 2 years years than once in less than once in 10 years years 10 years Resp. 95% reliability Resp. 95% reliability Younger than More than once in 2 40 years 21,3% 16,6% - 25,9% 6,9% 2,9% - 10,8% Older than 40 Once in 2 - 3 years 29,5% 24,9% - 34,7% 22,3% 15,8% - 28,8% Once in 4-6 years 29,8% 24,6% - 35,0% 34,3% 26,9% - 41,7% Once in 7 - 10 years 10,6% 7,1% - 14,2% 17,7% 11,7% - 23,7% Less than once in 10 years 8,8% 5,6% - 12,0% 18,9% 12,7% - 25,0%
  84. 84. How much money do people spend on painting the interior of their houses in RMB? How much money do people spend on painting the Conclusion interior of their houses in RMB? 1. On average richer people spend more money on 40,0% 35,0% 30,0% painting the interior of their 25,0% 20,0% houses. 15,0% Average 10,0% 5,0% Poor people 2. At least 45% of all people in 0,0% Middle class people North and East China spend 00 20 000 0 0 0 00 0 0 00 00 00 20 50 Rich people 10 .0 more than 1000 RMB on -2 -5 0. 0. 0- 0- 20 0- 00 00 -1 -2 20 50 00 00 an 10 painting the interior of their th 50 .0 10 e houses. or M 95% Resp. 95% reliability Resp. 95% reliability Resp. 95% reliability Resp. reliability Average 0-200 RMB 4,7% 2,8% - 6,6% 10,6% 6,5% - 14,7% 0,0% 0,0% 0,0% 0,0% Poor people 200-500 RMB 14,2% 11,1% - 17,3% 20,3% 14,9% - 25,7% 9,7% 5,8% - 13,6% 0,0% 0,0% Middle class people 500-1 000 RMB 23,7% 19,9% - 27,4% 27,2% 21,3% - 33,1% 24,2% 18,6% - 29,8% 3,1% 0% - 9% Rich people 1 000-2 000 RMB 26,3% 22,4% - 30,3% 22,1% 16,6% - 27,6% 28,6% 22,7% - 34,5% 37,5% 21,4% - 53,5% 2 000-5 000 RMB 19,1% 15,6% - 22,6% 14,7% 10.0% - 19,5% 21,1% 15,8% - 26,4% 28,1% 13,2% - 43,0% 5 000-10 000 RMB 8,2% 5,9% - 10,7% 3,7% 1,1% - 6,2% 11,5% 7,3% - 15,7% 18,8% 5,8% - 31,7% 10 000-20 000 RMB 2,1% 0,8% - 3,3% 0,5% 0% -1,4% 2,2% 0,2% - 4,1% 12,5% 1,5% - 23,5% More than 20 000 RMB 1,6% 0,6% - 2,8% 0,9% 0% - 2,2% 2,6% 0,5% - 4,7% 0,0% 0,0%
  85. 85. How much money do people spend on painting the interior of their houses North and East China? How much money do people spend on painting the interior of their houses in various regions? 30,0% 25,0% 20,0% North 15,0% Conclusion 10,0% 5,0% East 0,0% There are no big 00 0 0 0 0 00 0 0 00 00 00 00 20 50 10 .0 -2 -5 0. 0. 0- 0- 20 0- 00 00 -1 -2 20 differences between 50 00 00 an 10 20 th 50 .0 10 e or North and East China M with regard to the Resp. 95% reliability Resp. 95% reliability amount of money people North 0-200 RMB 5,7% 2,6% - 8,7% 3,5% 1,1% - 5,9% spend on painting the 7,3% - 15,5% East 200-500 RMB 16,2% 11,4% - 20,9% 11,4% interior of their houses 16,6% - 27,3% 500-1 000 RMB 26,2% 20,5% - 31,9% 21,9% 21,4% - 33,0% 1 000-2 000 RMB 26,6% 20,9% - 32,4% 27,2% 17,8% - 28,7% 2 000-5 000 RMB 16,2% 11,3% - 20,9% 23,2% 5,5% - 13,0% 5 000-10 000 RMB 6,6% 3,3% - 9,8% 9,2% 0,3% - 4,1% 10 000-20 000 RMB 1,3% 0,0% - 2,8% 2,2% More than 20 000 RMB 1,3% 0,0% - 2,8% 1,3% 0,0% - 2,8%
  86. 86. How much money do people spend on painting the interior of their houses in 1st, 2nd and 3rd tier cities? Comparison between expenditures on painting Conclusion interior houses in 1st tier and 2nd & 3rd tier cities There are no big differences 35,0% 30,0% between 1st, 2nd and 3rd tier 25,0% 20,0% 1st tier cities 15,0% 2nd & 3rd tier cities cities with regard to the 10,0% 5,0% 0,0% amount of money people 00 0 20 000 00 00 0 00 0 20 0 0 00 20 50 50 -5 0 10 .0 .0 spend on painting the interior -2 0. 0- 0- 10 -1 0 20 0- 00 -2 50 00 00 an 10 th .0 of their houses e or M Resp. 95% reliability Resp. 95% reliability 3,8% - 11,6% 1st tier cities 0-200 RMB 3,0% 1,1% - 4,9% 7,7% 14,1 - 25,7% 2nd & 3rd tier cities 200-500 RMB 10,7% 7,2% - 14,2% 19,9% 18,0% - 30,5% 500-1 000 RMB 23,0% 18,2% - 27,8% 24,3% 16,6% - 28,8% 1 000-2 000 RMB 28,7% 23,6% - 33,8% 22,7% 10,7% - 21,3% 2 000-5 000 RMB 21,3% 16,7% - 25,9% 16,0% 3,4% - 11,0% 5 000-10 000 RMB 9,0% 5,7% - 12,2% 7,2% 0% - 3,6% 10 000-20 000 RMB 2,3% 0,6% - 4,0% 1,7% More than 20 000 RMB 2,0% 0,4% - 3,6% 0,6% 0% - 1,7%
  87. 87. Which brands do people buy? Conclusion Who buys which brand? 80,0% There are no big 70,0% differences between rich 60,0% Average 50,0% and poor if it comes to 40,0% Poor people Middle class deciding what brand to 30,0% 20,0% Rich people buy. 10,0% 0,0% Levis Nippon ICI/Dulux Huarun Other Resp. 95% reliability Resp. 95% reliability Resp. 95% reliability Resp. 95% reliability Average Levis 0,6% 0% - 1,4% 1,2% 0% -2,9% 0,0% 0,0% 0,0% 0,0% Poor people Nippon 57,2% 51,8% - 62,5% 55,6% 47,9% - 63,2% 55,6% 47,5% - 63,7% 75% 55,0% - 95,0% Middle class ICI/Dulux 20,1% 15,8% - 24,4% 16,0% 10,4% - 21,7% 25,7% 18,6% - 32,8% 15% 0% - 31,5% Rich people Huarun 4,2% 2,0% - 6,3% 5,6% 2,0% - 9,1% 2,8% 0,1% - 5,5% 5% 0% -15,1% Other 18,0% 13,8% - 22,1% 21,6% 15,2% - 27,9% 16,0% 10,0% - 22,0% 5% 0% - 15,1%
  88. 88. Which brands do people from North and East China buy? Which brands do people from North and East China Conclusion buy? 70,0% There are no big 60,0% differences between 50,0% 40,0% North North and East if it 30,0% East comes to deciding what 20,0% 10,0% brand to buy. 0,0% Levis Nippon ICI/Dulux Huarun Other Resp. 95% reliability Resp. 95% reliability North Levis 0,0% 0,0% 0,6% 0% -1,8% East Nippon 54,1% 45,9% - 62,3% 62,4% 54,4% - 70,4% ICI/Dulux 21,4% 14,7% - 28,1% 19,7% 13,1% - 26,3% Huarun 4,4% 1,0% - 7,7% 3,8% 0,1% - 7,0% Other 20,1% 13,5% - 26,7% 13,4% 7,7% - 19,2%
  89. 89. Which brands do people from 1st, 2nd and 3rd tier cities buy? Comparison of what brand people buy in 1st and 2nd & 3rd tier cities Conclusion 70,0% In2nd and 3rd tier cities 60,0% 50,0% 40,0% 1st tier cities people more often buy 30,0% 2nd & 3rd tier cities ‘other’ brands than in 1st 20,0% 10,0% 0,0% tier cities. n un ux vis er po th ul ar Le p O I/D Hu Ni IC Resp. 80% reliability Resp. 80% reliability 1st tier cities Levis 0,5% 0% - 1,1% 0,0% 0,0% 2nd & 3rd tier cities Nippon 57,9% 53,5% - 62,4% 56,2% 50,6% - 61,7% ICI/Dulux 23,3% 19,5% - 27,1% 15,4% 11,3% - 19,4% Huarun 3,5% 1,8% - 5,1% 5,4% 2,8% - 7,9% Other 14,9% 11-7% - 18,1% 23,1% 18,3% - 27,8%
  90. 90. Would people paint more often if paint was cheaper? Would people paint more often if paint was cheaper? Conclusion 90,0% Most people wouldn’t 80,0% 70,0% paint more often if paint 60,0% Average 50,0% Poor people was cheaper 40,0% Middle class 30,0% Rich people 20,0% 10,0% 0,0% Yes No Average Poor people Middle class Rich people Resp. 95% reliability Resp. 95% reliability Resp. 95% reliability Resp. 95% reliability Yes 27,7% 23,7% - 31,8% 33,6% 27,2 - 40,0% 23,9% 18,2% - 29,7% 17,1% 3,9% - 30,3% No 72,3% 68,2% - 76,3% 66,4% 60,0% - 72,8% 76,1% 70,3% - 81,8% 82,9% 69,7% - 96,1%
  91. 91. Relationship between bought houses and painted when surrendered Painted * Rentedorboughthouse Crosstabulation Rented or bought house Rented Boug ht Total Painted Yes Count 116 214 330 % within 71,2% 59,9% 63,5% Rentedorboug hthouse % of Total 22,3% 41,2% 63,5% No Count 47 143 190 % within 28,8% 40,1% 36,5% Rentedorboug hthouse % of Total 9,0% 27,5% 36,5% Total Count 163 357 520 % within 100,0% 100,0% 100,0% Rentedorboug hthouse % of Total 31,3% 68,7% 100,0% * Chi square = 0.014, Cramer‘s V = 0,108
  92. 92. How many times do people that live in rented or bought houses paint their house? Conclusion How many times do people who live in rented and 1. People who live in rented houses bought houses paint their house? paint their house far more often than people who live in bought 40,0% 35,0% houses 30,0% 25,0% Rented 2. At least 61,9% of all people who 20,0% Bought 15,0% live in a rented house paint their 10,0% house more than once in 3 years 5,0% 0,0% 3. Maximum 41,8% of all people who More than Between Between Between Less than once in 2 2-3 years 4-6 years 7-10 years once in 10 live in a bought house paint their years years house more than once in 3 years Resp. 95% reliability Resp. 95% reliability Rented More than once in 2 years 27,7% 20,7% - 34,7% 10,7% 7,5% - 13,9% Bought Between 2-3 years 34,2% 26,7% - 41,7% 23,5% 19,1% - 27,9% Between 4-6 years 21,9% 15,4% - 28,5% 36,2% 31,2% - 41,2% Between 7-10 years 7,7% 3,5% - 11,4% 15,4% 11,6% - 19,1% Less than once in 10 years 8,4% 4,0% - 12,8% 14,2% 10,6% - 17,8%
  93. 93. What are the rented/bought ratio’s in Beijing and Shanghai? Do people in Beijing and Shanghai rent or buy a Conclusion house? 1. Relatively, more people 90,0% have a bought house in 80,0% 70,0% Shanghai 60,0% 50,0% Rented 40,0% Bought 30,0% 20,0% 10,0% 0,0% Beijing Shanghai Beijing Shanghai Resp. 95% reliability Resp. 95% reliability Rented 55,1% 47.1% - 63,1% 19,4% 13,5% - 25,3% Bought 44,9% 36,9% - 52,9% 80,6% 74,7% - 86,5%
  94. 94. Paint deciding, buying and doing process
  95. 95. What is the first thing you do after you have decided to paint your house? What w as the first thing you did after deciding to paint your house? Conclusion You went to a deco market 40,0% and asked a salesman for advice 35,0% Rich people more often look 30,0% You called a design company on the internet for information 25,0% 20,0% You called a painter on painting after deciding to 15,0% You called an intermediairy/worker 10,0% paint their house than poor 5,0% You asked a friend for advice (33%) people 0,0% You searched on the internet for more information le e s e as g pl op ra eo cl pe ve rp e Other A dl h oo ic id R M P Resp. 80% reliability Resp. 80% reliability Resp. 80% reliability Resp. 80% reliability You went to a deco market and asked a Average salesman for advice 16,3% 13,1% - 19,4% 18,1% 13,2% - 23,0% 16,3% 13,2% - 19,3% 8,6% 2,5% - 14,6% Poor You called a design people company 14,4% 11,4% - 17,4% 11,0% 8,4% - 13,6% 17,1% 14,0% - 20,2% 22,9% 13,8% - 32,0% Middle class You called a painter 10,6% 8,0% - 13,2% 10,5% 8,0% - 13,1% 11,3% 8,6% - 13,9% 11,4% 4,5% - 18,3% Rich You called an people intermediairy/worker 1,1% 0% - 2,0% 1,7% 0,6% - 2,7% 0,8% 0% - 1,6% 0,0% 0,0% You asked a friend for advice (33%) 33,0% 29,0% - 37,0% 38,0% 34,0% - 42,0% 29,2% 25,4% - 32,9% 25,7% 16,2% - 35,2% You searched on the internet for more information 16,3% 13,1% - 19,4% 13,1% 10,3% - 15,8% 15,8% 12,8% - 18,9% 25,7% 16,2% - 35,2% Other 8,3% 5,9% - 10,7% 7,6% 5,3% - 9,8% 9,6% 7,1% - 12,0% 5,7% 0,7% - 10,7%
  96. 96. What is the first thing people in North and East China do after they have decided to paint their house? What is the first thing people in North and East China Conclusion do after deciding to paint their houses? 1. People from the North more 40,0% often call a designer for 35,0% 30,0% 25,0% North information on painting after 20,0% 15,0% East deciding to paint their house 10,0% 5,0% 0,0% than people from East China friend for advice You went to a You called a and asked a deco market Other You asked a painter 2. Most people ask their friends’ (33%) advice first Resp. 80% reliability Resp. 80% reliability You went to a deco market and North asked a salesman for advice 17,0% 14% - 20,0% 16,3% 13,2% - 19,4% East You called a design company 17,0% 14,0% - 20,0% 10,5% 7,9% - 13,0% You called a painter 10,0% 7,6% - 12,4% 9,6% 7,1% - 12,1% You called an intermediairy/worker 1,2% 0,3% - 2,0% 0,8% 0% - 1,6% You asked a friend for advice (33%) 32,8% 29,1% - 36,6% 34,3% 30,3% - 28,3% You searched on the internet for more information 16,2% 13,3% - 19,2% 17,2% 14,0% - 20,3% Other 5,8% 3,9% - 7,7% 11,3% 8,7% - 13,9%
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