Wu Zhiyong: The market share of small and medium-sized paint companies will shrink significantly

Global Coatings Network News:

In 2015, especially at the end of the year, this view was repeated on the Internet: China's coatings industry has serious overcapacity, and the only way out for coating companies is to reduce production capacity.

It is said that the paint is not good, why are they still expanding production capacity?

At present, paint production is dominated by industrial paints.
With the gradual disappearance of China’s demographic dividend, the global manufacturing industry is shifting to countries with lower labor costs such as Southeast Asia, India, and Brazil.
In addition, with the rise of robots instead of manpower, some manufacturing industries are also The return to developed countries has made China's manufacturing industry even more sluggish.
What's more serious is that overcapacity has become China's manufacturing industry's biggest flaw.
Home appliances, automobiles, steel and other industries are experiencing the pain of decapacity and destocking at the same time, and the global economic downturn has made China's manufacturing industry rely on external forces.
It is also very difficult to get rid of the chronic disease of overcapacity.

The coating industry has a close relationship with the real estate industry.
In other words, the coating industry is advancing along with the rapid development of the real estate industry.
The two always have more or less similarities.
At present, the real estate industry bids farewell to the golden age of rapid development and is in a period of turbulence.
According to data from the National Bureau of Statistics, although the total sales of China's real estate commercial housing increased by 14.
4% and the sales area increased by 6.
5% in 2015, the overall situation is still optimistic, but in 2015 the newly started area of ​​China's real estate commercial housing decreased by 14.
0%, and the completed area decreased by 6.
9%.
%, the area of ​​land purchased decreased by 31.
7%, and the area of ​​commercial housing for sale increased by 15.
6%.
Destocking has become the main theme of the real estate industry, which is bound to affect the development of architectural coatings.

Through the above analysis, the author believes that although the production capacity of Chinese coatings will reach new heights in the short term, the release of production capacity will not be very fast, the total output will maintain a low growth rate, and the release process is only a process of redistributing market resources in the coating industry.
In the future, if the strongest is Hengqiang, the market share of small and medium-sized paint companies will shrink significantly, some paint companies will be eliminated, and the industry concentration will continue to rise.

Concluding remarks

Opportunities and risks will always coexist.
Paint companies are frantically expanding their production capacity and improving their own strength to prepare for the future reshuffle.
They have to bear the risks brought about by insufficient market demand and face more intense competition.
This also requires paint companies to be in marketing.
Continuous innovation, so that the growth of market share can catch up with the growth rate of production capacity.
We hope that the Chinese coatings industry can withstand this test, and we also hope that Chinese coatings companies can remember the lessons of this crisis.