China Furniture Exhibition | Policy Empowers Lower-Tier Markets: County-Level Home Furnishing Opens a New Growth Chapter
According to the China Furniture Exhibition, in August, the Ministry of Commerce and eight other departments jointly issued the Opinions on Further Unleashing the Vitality of Lower-Tier Markets and Activating County-Level Consumption, rolling out supportive measures spanning county-level commercial renovation, green building materials going to the countryside, equal urban-rural access to the same quality of goods and services, streamlined market access, and innovative home-renovation business formats. The document provides clear policy guidance for unlocking the consumption potential of county-level markets and revitalizing lower-tier market resources. For the home furnishing industry, this policy is not broad macro-level guidance; it precisely targets the core pain points brands face when going down-market—high store-opening costs, mismatched product offerings, weak logistics and delivery, and absent after-sales service systems—removing institutional barriers to county-level expansion and opening up a substantial incremental market for the home furnishing industry.
China's more than 2,800 county-level administrative divisions are the core carriers of new urbanization. Driven by sustained demand from self-built home renovations, improvement-type home decoration, and homes purchased for marriage, the county-level home market has already built a massive consumption base, making it the industry's new growth trough. The new nine-department policy paves the way for the furniture industry's down-market expansion from three core dimensions—consumer demand, business channels, and the business environment—sending a clear signal of industry development. The policy explicitly promotes equal urban-rural access to the same quality of goods and services and the delivery of green and smart home products to the countryside, requiring urban and rural markets to offer the same products, same models, and same quality. This decisively dismantles the industry chaos in which county-level markets were long served by downgraded, exclusive low-spec products with lagging quality. As county residents' income levels steadily rise, local consumers' home-decoration concepts continue to upgrade. They no longer chase low prices alone; environmental friendliness, quality, aesthetics, and customization have become core consumer demands. The penetration potential of green building materials, whole-home customization, and complete sets of upholstered furniture in county-level markets continues to expand.
At the business-channel level, the new policy implements the "one license, multiple locations" (yizhao duozhi) commercial registration reform, simplifying approval procedures for branded chain stores, supporting the upgrading of township commercial centers, and encouraging home brands to extend store networks deep into counties and townships. Compared with the previous cumbersome process of registering and approving each store separately, the reform dramatically reduces the administrative and time costs of furniture brands' down-market expansion, benefiting the batch rollout of county and township stores and community experience stores. The policy also supports home-decoration, home-appliance, and furniture companies in partnering with real-estate developers for scenario-based marketing, further widening the dual tracks of new-home decoration and old-home renovation. At the same time, the policy focuses on improving county and township distribution and service systems—by strengthening county-level logistics networks and updating urban-rural commercial facilities, it fills gaps in furniture installation, repair, and after-sales support, tackling the long-standing bottlenecks that have constrained brands going down-market: logistics damage to bulky furniture, difficult on-site installation, and sluggish after-sales response. This lays the infrastructure foundation for home products to take root in county and township markets.
With the policy tailwind, the down-market trend in the home furnishing industry has already taken shape. Leading home furnishing companies now generally treat county-level markets as core strategic territory, giving rise to a new competitive landscape of "consolidating the base in high-tier cities while seizing incremental growth in lower-tier markets." Leading home furnishing malls are deploying county-level stores with asset-light models, custom furniture companies are deepening county dealer channels, and ready-made furniture brands are opening large county-level experience stores. Competition in county-level markets is becoming increasingly standardized and professional. However, a better external business environment does not automatically translate into business growth. County-level markets have distinctive consumption characteristics and operational logic. Blindly copying the products, pricing, and operating models of first- and second-tier cities can easily lead to store losses, inventory pile-ups, and "local adaptation failures." Many existing industry pain points still demand careful attention from companies.
Insufficient product adaptability is the primary challenge for brands going down-market. County-level markets are dominated by self-built homes and large floor plans, with ceiling heights and living-room widths that differ significantly from urban commercial apartments. Some regions favor large-format solid-wood furniture, while rainy areas demand higher moisture resistance. Simply replicating urban best-sellers often results in mismatched dimensions, disconnected styles, and poor fit, ultimately leading to sluggish sales. Meanwhile, consumption segments in county-level markets are clearly stratified: rigid-demand groups seek high cost-effectiveness, while improvement-type customers value quality and experience. A single price point or a single product category cannot cover the full spectrum of market demand. The widespread low-price involution in county-level markets also constrains healthy industry development. Local small factories and mom-and-pop shops compete by undercutting prices, and some outside brands, to adapt to low-price competition, launch downgraded special-supply products and cut costs on materials and hardware. While this may win customers in the short term, it easily triggers quality complaints and erodes brand reputation—running counter to county consumers' upgrading trend of valuing quality and service. The low-price, low-quality development model has become unsustainable.
Beyond that, delivery and after-sales shortcomings, along with channel management difficulties, are issues furniture companies must confront head-on when going down-market. The home furnishing industry has long lived by the saying "three parts product, seven parts service." County and township areas have scattered layouts and long logistics radii, so bulky furniture carries a higher risk of transit damage. Local installation technicians are fragmented and service standardization is low. Most brands emphasize recruiting dealers and opening stores while neglecting operations and maintenance, lacking localized warehousing, logistics, and after-sales systems. Service capacity thus fails to keep pace with expansion speed, making it hard to build repeat purchases and word-of-mouth referrals, and continuously intensifying pressure on store operations. At the same time, the comprehensive capabilities of county dealers vary widely. Some dealers are only good at basic sales and lack professional skills in whole-home design, store operations, and channel development. Multi-brand concurrent operations, chaotic inventory management, and imbalanced online-offline pricing are also common. If manufacturers only ship goods and offer basic policies without a sustained training and support system, stores easily fall into a pattern of booming early on and flagging later.
To precisely capture the policy dividend in county-level markets, furniture brands and dealers must abandon extensive expansion thinking and complete a systematic adaptation and upgrade across products, supply chains, services, and channels, while deeply cultivating localized market demand. For manufacturers, the first step is to discard the low-spec special-supply product mindset. Under the policy's requirement of equal urban-rural quality, they should optimize product dimensions and styles based on county-level floor-plan characteristics, living habits, and regional aesthetics—while safeguarding environmental and quality standards—building a tiered product matrix spanning cost-effective rigid demand and mid-to-high-end improvement needs that fits local consumption. On the supply-chain front, they can leverage county commercial centers to deploy regional forward warehouses, shortening logistics delivery radii and reducing damage rates for bulky products. They should also abandon the traditional inventory-pushing franchise model and offer dealers flexible inventory policies to ease the capital pressure on small and medium dealers.
Brands need to shift from pure product supply to outputting a complete operating system. They should provide systematic training for county dealers, closing capability gaps in design coordination, whole-home operations, and local customer acquisition, and helping dealers open up core channels including local real-estate developers, renovation companies, and community groups. At the same time, they should build a standardized county and township installation and after-sales system, integrate local service resources, and extend service capability across the entire down-market. In business format, they must also break away from the traditional big-store mentality, adopting a combination model of "big stores for experience, small stores for traffic," deploying county-standard flagship stores, community experience stores, and township cooperative outlets to lower the investment threshold per store and adapt to the consumption volume and market size of different counties.
For county dealers, the way forward is to step out of the vicious cycle of low-price involution and abandon the traditional single-product sales model. Centering on scenario-based experience, they should provide consumers with one-stop whole-home customization solutions. At the same time, they should deeply cultivate local resources, build a stable local channel network, focus on delivery quality and after-sales service, and rely on word-of-mouth to sustain customer flow, establishing a core competitive advantage that distinguishes them from local small workshops.
The China Furniture Exhibition states that for a long time, county-level markets were viewed by many companies as a fallback option after industry growth stalled. But with sustained policy empowerment and the comprehensive upgrading of county-level consumption, the lower-tier home furnishing market has fully completed its transformation from "making do with rigid demand" to "choosing quality," becoming an incremental track with exceptionally high certainty for the furniture industry. The core value of the policy lies in optimizing the external business environment, but the ultimate outcome of market competition still depends on companies' own core strengths. True market penetration is by no means a simple downward shift of products and channels; it means outputting high-quality products, standardized delivery, and comprehensive services based on the real consumption needs of county-level markets. Going forward, only brands and dealers that deeply understand localized demand and open up the entire chain of supply chain and services can truly establish a foothold in county-level markets and keep reaping the down-market dividend.
Source: Sichuan Furniture Industry Association