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Likou furniture research and development capabilities to improve the industry optimization is the way out
Buying furniture at Likou Furniture City used to be a popular choice in recent years due to the wide range of options and the ability to negotiate prices. However, in the past two years, Red Star Macalline, Yuexing Furniture City, and Sixth Space have rapidly expanded in Sucheng, introducing imported and high-end brands. As a result, purchasing furniture from Likou is no longer the only option. Faced with this "foreign invasion," as the second-largest furniture industry in the country, local merchants and the industry itself are now focusing on addressing challenges such as the lack of strong R&D capabilities and an overall weak innovation culture. A new trend is emerging: more and more Likou furniture manufacturers are beginning to invest in research and development and design, establishing their own R&D teams. Additionally, the Suzhou International Home Furnishing Research and Development Institute, organized by the government, associations, enterprises, and universities, has recently started construction.
Furniture lacks R&D capabilities.
Likou Furniture City, which began as a small rural family workshop in the 1990s, has grown into the largest furniture distribution center and consumer market in East China. With nearly 1.5 million square meters of space, it houses over 3,000 businesses. However, when you walk through the city, you may find it overwhelming due to the sheer number of choices and the similarity of many products, making it difficult to decide beyond just price.
The Likou furniture cluster is mainly composed of small and medium-sized enterprises, most of which rely on their own resources, making it hard to support large-scale R&D teams. Moreover, new products developed with heavy investment face the risk of not being accepted by the market after production. “The overall reputation of Likou Furniture City is well-known, but there are not many well-known brands within the cluster,†said Shi Lei, executive chairman of the Suzhou Furniture Industry Association. Gu Hongmin, secretary of the Party General Branch and deputy director of the Likou International Furniture City Management Committee, also admitted that R&D and design are the "weak points" of the Likou furniture industry, which has hindered its growth. In contrast, the Guangdong furniture industry established R&D institutes in key areas like Shenzhen, Dongguan, Shunde, and Zhongshan within seven or eight years. These institutes have become leading platforms that drive local industry development and promote brand innovation and new product creation.
Currently, the Likou furniture industry suffers from weak R&D capabilities, inconsistent product quality, and a lack of distinctiveness, which limits the growth of companies. Industry insiders remain confident about the potential of the sector's large scale but are concerned about the industry’s limited R&D capabilities.
Optimization and upgrading of the furniture industry to enhance R&D capabilities.
In fact, several powerful furniture companies in Xiangcheng District have recognized the importance of R&D for market competitiveness and have taken early steps to form their own R&D teams. New Acer Furniture is one such example. Cai Yaojun, assistant to the general manager, said that since the company started building an R&D team in 2005, it has launched three series of original products, each containing up to 100 different items. “Each series required an investment of 3 to 5 million yuan in R&D. Although the cost is high, the long-term benefits are significant.†Cai added that R&D funds now account for about 10% of sales. After more than eight years of development, the company's R&D team has grown to 12 members, including two graduate students, with core staff earning annual salaries of up to 200,000 yuan. Despite the high pay, talent in furniture R&D remains scarce.
Shi Lei, executive chairman of the Suzhou Furniture Industry Association, stated that consumers are increasingly seeking better quality, higher grades, and more stylish designs, making price less of a deciding factor. While the Likou furniture industry is large, it still lacks originality and relies too much on price competition. Therefore, concentrating talents and resources to improve R&D capabilities is essential for the industry's optimization and long-term development.