In the home appliance industry, consumers have been facing sluggish growth. The rapid expansion of the market led to a slowdown in consumption. In 2013, Xiao Yanhong and her husband had been working in the cabinet business near Beiyuan Street for eight years. During 2008 and 2009, their store was doing exceptionally well: “Sometimes, I didn’t even need to approach customers because I was worried that if too many orders came in, the factory wouldn’t be able to keep up,†said Xiao Dajie. After experiencing such success, the couple opened two more branches.
However, from late 2011, their business started to decline. By March of this year, one of the stores’ rent was about to expire, leaving Xiao Dajie unsure whether to continue or close it. “The business is not going well, and it's hard to make ends meet,†she said. The investment in one of the branches exceeded 100,000 yuan, but the return was only over 60,000 yuan.
This situation is shared by many home stores around Beiyuan Street, which are now nearly empty. Most shops have idle spaces, and even promotional activities struggle to attract attention. A reporter observed a children’s furniture store where sales staff were chatting or playing on their phones, with only a few customers wandering in. One employee mentioned, “In the past two years, promotions have become more frequent than ever. Some brands even offered discounts of up to 40% during New Year, but it still didn’t bring in many customers.â€
Jinan saw a surge in home store sales in 2009 due to the National Games. Several major home centers, including Eurasia Home North Garden Branch, Daming Home Baihe Branch, Ginza Home Center, and Red Star Meikailong World Expo Home Plaza, set up shop along Beiyuan Street. With more than 600,000 square meters of space added, the area now hosts over 40 home markets covering more than 1.5 million square meters. According to members of the Shandong Furniture Association, the market suffers from oversupply. For example, East Asia’s home business area is about 100,000 square meters, yet its annual turnover is less than 1 billion yuan—far below industry standards.
Many businesses believe that increased competition and the rise of e-commerce are key factors affecting the traditional home furnishing market. “There are thousands of flooring companies in Jinan, and each is fighting for a smaller share of the market. Price cuts and profit-sharing have become common strategies, but this often leads to poor quality and weak after-sales service,†said Mr. Wang, who runs a flooring company.
Meanwhile, online sales have also impacted physical stores. Li Meng, a customer shopping for household items, was taking photos with his phone while browsing. He explained that he wasn’t ready to buy immediately but planned to compare prices online. Sales staff admitted that online retailers can save on middleman costs, offering products 20–30% cheaper than physical stores, which greatly affects in-store sales.
“The downturn has made everyone in the industry nervous, but it also highlights our weaknesses,†said Guo Enzheng, general manager of a Jinan store. “We used to focus on ‘seeds,’ but now we need more motion. This year, we will expand into residential communities and provide better services.†Qin Xiuju, general manager of Daming Home, agreed, saying, “The market is highly competitive, and homogeneity is a big issue. Community marketing will be a key battleground moving forward.â€
Affiliate marketing was popular in 2012, with Xu Zhimin, general manager of Red Star Meikailong Jinan Mall, noting its cost-effectiveness. “Affiliate campaigns can cost as little as 10,000 yuan compared to 50,000 for traditional events. But the future lies in design—understanding consumer needs and offering customized solutions.†He emphasized that future alliances must integrate design to truly meet market demands.
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