• Login
    • Join
  • FOLLOW:
  • Subscribe Free
    • Magazine
    • eNewsletter
    Checkout
    • Magazine
    • News
    • Research
    • Markets & Technologies
    • Raw Materials
    • Top Companies
    • Directories
    • Jobs
    • Events
    • Microsites
    • More
  • Magazine
  • News
  • Research
  • Markets & Technologies
  • Raw Materials
  • Top Companies
  • Directories
  • Jobs
  • Events
  • Microsites
  • Current / Back Issues
    Features
    Business Corner
    Editorial
    Digital Edition
    eNewsletter Archive
    Our Team
    Editorial Guidelines
    Subscribe Now
    Advertise Now
    World Reports
    eBook
    Top Features
    Mixing Equipment Directory

    The Wood Coatings Market

    Antimicrobial Coatings Market

    Additives Update

    Pigment Supplier Directory
    Breaking News
    Online Exclusives
    Distributor News
    Financial News
    Paint & Coatings Manufacturer News
    People In the News
    Price Increases
    Product News
    Video Bites
    Raw Materials & Equipment
    Suppliers News
    Live From Shows
    Top News
    Croda Named Most Admired Company in British Chemical Sector

    Ashland Increases 1,4-Butanediol, Derivatives Prices in Europe

    First Source Worldwide, LLC Celebrates 20th Anniversary

    Chromaflo Technologies Adds Benjamin Woeste as Territory Sales Manager

    Maroon Group Acquires Cary Company's Raw Materials, Specialty Chemicals Distribution Business
    Top Companies report
    Market Research
    White Papers / Tech Papers
    Technical Papers
    Product Spec Sheets
    World Reports
    Adhesives and Sealants
    Aerospace Coatings
    Architectural Coatings
    Automotive Coatings
    Automotive Refinish
    Business Operation
    Color Trends & Forecast
    Construction Chemicals
    Corrosion Control
    Industrial Coatings
    Laboratory Equipment
    Marine Coatings
    Market Trends & Forecast
    Powder Coatings
    Production Equipment
    Radcure Coatings
    Special Purpose Coatings
    Wood Coatings
    "Green" Coatings

    The Connection Between Color Psychology & Productivity In The Workplace

    Benjamin Moore Launches COMMAND

    Mule-Hide Products Co. Introduces Seal-Fast Liqui-Flash

    IFS Coatings Breaks Ground on 70,000-Square-Foot Expansion

    Conversation with Henning Kreis of Zeppelin Systems
    Additives
    Binders
    Pigments
    Solvents

    Ashland Increases 1,4-Butanediol, Derivatives Prices in Europe

    AOC Announces EMEA Price Increase

    OQ Chemicals Increases Carboxylic Acids, Esters Prices

    Arkema Reports Full-year 2020 Results

    New Increase in Kynar Fluoropolymer Capacities at Arkema's Chinese Site
    Buyers Guide
    Company Capabilities
    Distributor Guide
    Add New Company
    International Buyers Guide Companies
    Pilot Chemical Company

    Active Minerals

    Clariant Additives

    Eagle Specialty Products

    Shepherd Color Company, The
    Industry Events
    Webinars
    Live From Show Event
    Top Events
    Surface Finishing Mexico 2021

    Cleveland Coatings Society Zoom Meeting

    Cleveland Coatings Society Zoom Meeting

    PCI Powder Coating Week

    Southern Society for Coatings Technology Annual Meeting and Technical Conference
    Companies
    White Papers/Tech Papers
    Product Spec Sheets
    Equipment
    Literature/Brochures
    Videos
    International Buyers Guide Companies
    Active Minerals

    Siltech Corporation

    Clariant Additives

    Pilot Chemical Company

    Shepherd Color Company, The
    • Magazine
      • Current / Back Issues
      • Features
      • Editorial
      • Business Corner
      • Digital Edition
      • eNewsletter Archive
      • Editorial Guidelines
      • Subscribe Now
      • Advertise Now
    • Breaking News
    • Directories
      • Buyers Guide
      • Distributor Guide
      • Corporate Capabilities
      • Trade Associations
      • Add Your Company
    • Markets & Technologies
      • Adhesives and Sealants
      • Aerospace Coatings
      • Architectural Coatings
      • Automotive Coatings
      • Automotive Refinish
      • Business Operation
      • Color Trends & Forecast
      • Construction Chemicals
      • Corrosion Control
      • Industrial Coatings
      • Laboratory Equipment
      • Marine Coatings
      • Market Trends & Forecast
      • Powder Coatings
      • Production Equipment
      • Radcure Coatings
      • Special Purpose Coatings
      • Wood Coatings
      • "Green" Coatings
    • Raw Materials
      • Additives
      • Binders
      • Pigments
      • Solvents
    • World Reports
      • Africa Report
      • China Report
      • India/Asia Pacific Report
      • Europe Report
      • Latin America Report
      • Market Research
      • Russian Report
    • Top Companies
    • Online Exclusives
    • Slideshows
    • Experts Opinions
    • Blog
    • eBook
    • Infographics
    • Videos
    • Podcasts
    • Whitepapers
    • Jobs
    • Microsites
      • Companies
      • White Papers/Tech Papers
      • Product Spec Sheets
      • Equipment
      • Literature/Brochures
      • Videos
    • Events
      • Industry Events
      • Live From Show Event
      • Webinars
    • About Us
      • About Us
      • Contact Us
      • Advertise With Us
      • Privacy Policy
      • Terms of Use
    China Reports

    China’s Architectural Coatings - The Forgotten Market

    Riding China’s unprecedented home construction growth is at best a short-term strategy. What happens when this growth levels out or worse, declines?

    Dan Watson07.12.11
    How would you measure success in a market that just a handful of years ago did not exist? No, I’m not talking about the latest electronic gizmo or the latest social network. The market I am referring to is classical Architectural Coatings in China. Several China-based coatings producers claim enormous success in that market. Is their claim genuine? Is their success long term sustainable? Are they leaders or followers in terms of the real drivers for this market? The real answer to these questions may rest with how they might define success.

    No one can deny that China has been the clear winner in the economic development race. They are now number two in the world and are projected to overtake the U.S. in the next few years. China has experienced over two decades of high economic growth, which has been fueled by the consecutive increases of industrial output, consumer consumption and capital investment.

    China’s GDP has been growing at 9.8 percent per annum (NOTE: In an effort to control inflation the Central Government has indicated that growth in the immediate future should be throttled back to about 7.5 percent). National industry output has been advancing at 15 percent annually and will continue to sustain a strong growth for the remainder of this decade.

    As a result, the fast-growing middle class is creating an enormous consumer society. As the fastest-growing economy in the world, China has attracted the attention of investors and corporations around the world for the last two decades. The result of this phenomenal growth is that today China is regarded as the world’s largest producer and consumer of coatings with a total coatings production exceeding 9.5 million metric tons.

    With the evolution of a middle class, over the past decade 400 million Chinese families have experienced the historic drive to pursue the universal dream of home ownership. This drive towards home ownership has given rise to an unprecedented expansion in home construction, which in turn has resulted in a significant growth in architectural coatings.

    Although there is no exact measurement of the size of this market it is estimated that in 2010 the architectural market in China was about 3.5 million metric tons. It is further expected that it will grow at a rate in excess of eight to 10 percent over the next five years. However, there is a caveat with this projection, i.e., the home construction expansion will continue at its present rate.

    Since 2004, the largest architectural segment has been interior water-based coatings. In 2010 that market was estimated to be one million metric tons. The overall improvement of per capita income for the average Chinese individual has allowed more families to become homeowners. Until recent times, the government and banks were highly supportive of individual home ownership. Due to the global economic downturn Chinese banks have backed off in their lending, which has slowed the housing development compared to just a few years ago.

    What DIY market?

    On the surface, the architectural coatings statistics sound like a good thing for coating producers. Unfortunately, many segments of the traditional coatings market in China are not well developed. The Chinese architectural market is highly competitive and extremely diffuse. It is estimated that there may be as many as 8,000 paint producers inside China at least half of which who produce an architectural coating.

    Unlike industrial coatings such as automotive coatings or inks, there is an absence of rigorously enforced quality standards for architectural coatings in China. As a result, the market is beset with a wide range of product composition, quality and performance. In addition, there is essentially no DIY coatings market in China. The market is completely controlled and managed by contract painters whose objectives and positions are not in sync with either the paint producer or the homeowner.

    If we review strong, well-defined and well-managed architectural coatings markets around the globe it is noted that growth and stability cannot exist without an established DIY market whereby producers and users are in sync. In other words the primary drivers in most successful architectural markets tend to be homeowners, not contract painters.

    Although there are well-known international coatings companies established inside China the route to market is essentially through contract painters, not through homeowners. This absence of homeowner participation has given rise to confusion about what is really needed by the Chinese architectural market.

    Homeowners vs. contractors

    Historically, the average Chinese citizen has not invested a lot of money in either improving the basic appearance of their home nor in the use of coatings to protect its various substrates. That position has changed somewhat over the past decade and was significantly reinforced by the Beijing Olympics. In an effort to impress the visitors to the Olympics and of course, the rest of the TV viewing world, the Chinese Government pushed a massive coatings project of unprecedented size and scope.

    Offices, manufacturing plants and homes were all painted in a variety of dazzling colors designed to impress the viewer. Even today various cities in China not only dictate that certain buildings be painted but what color is to be used. In the countryside, many small towns have instituted regulations regarding the painting of homes and offices. Due to the historical cultural influence in China, this entire painting requirement falls in the hands of “Contract Painters” and along with this fact comes a host of problems.

    The average Chinese homeowner contracts with a coatings company to do their painting. The company would visit with the homeowner, submit an estimate of the amount of paint that is to be used and in some instances they would work with the homeowner in choosing colors. The concept of flat versus eggshell, or eggshell versus gloss may come up but the question of what type of coating to use—interior or exterior, water-based or solvent-based—is generally not discussed nor what resin type such as vinyl, acrylic, polyurethane, alkyd, etc. 

    What generally happens is that the contractor will estimate far more paint than is required to do the job. Even so, the contractor will often add water or solvent, depending on the system used, to the paint in an effort to extend coverage and minimize the amount of paint that has to be used. The contractor will then take the overage paint and use it in other jobs or will sell it to smaller, less organized contractors.

    By adding additional water or solvent to the coating the ultimate performance of the coating is compromised. Unfortunately, the Chinese architectural market is primarily based on esthetics and price, not performance. In some instances the coatings that are eventually applied to homeowner dwellings are so poor that the locals have coined the term “wall cancer” signifying that the coatings are terminally sick and will eventually die.

    All of this less than ethical behavior by the contract painter could be avoided if the average homeowner was more involved in the process and more educated about architectural coatings. Several of the larger, international coatings producers have attempted to solve this problem by offering their paints through in-house paint contractors. Unfortunately, the outcome achieved has not been as hoped.

    Mature markets by comparison

    In the U.S. and Europe the architectural coatings market has undergone significant changes over the years. The U.S., like China, used contractors to both produce and apply coatings for many years. With the advent of water-based coatings there was a conscious effort on the part of the paint producers to bring the individual homeowner into the process.

    Admittedly, most of this desire to get the homeowner involved was based on a belief that the coatings producer could extract more profit from the homeowner than working through a contractor. That assumption proved to be correct. There is still a contractor painting market in the U.S. but it is small compared to the total DIY market.

    China’s architectural market appears to be driven by a combination of new home construction and government policies regarding the need to paint a given structure. Unfortunately, neither of these two drivers are long-term sustainable. As we have seen in the U.S., economic conditions have reduced new home construction by a considerable amount. What has saved the U.S. architectural coatings market is the fact that there exists a strong DIY market and that over the years homeowners have been educated as to the need to protect and improve the appearance of their single largest investment. 

    If a homeowner cannot acquire a new home they often invest in the renovation of their existing home. In addition, through several years of intense education and development of the DIY market the U.S, homeowners today are provided with a wide variety of highly crafted products that make it easy for them to carry out the actual painting activity themselves and removes the added cost of a contractor.

    In addition, through working closely with these homeowners over the years, the coatings manufacturers have been able to develop formulations that meet the real demand of the ultimate user such as issues involving odor, ease of clean up, resistance to various products, touch up ability, non-flammability and no lead levels. The same situation has happened in Europe. 

    However, in China, the development of the architectural coatings market has not progressed along the same line as in the U.S. and Europe. Mostly this is due to the fact that this market is in many ways still new to the Chinese consumer. In China the architectural coatings market is comprised of a large amount of solvent-based coatings and in some areas toxic lead is still used as a pigment.

    What needs to happen in China is for the coatings producers to cultivate a different route to market rather than through traditional contract painters. As mentioned earlier, the objective and strategies of contract painters are not in sync with the coatings producers or the homeowners, yet they are the primary route to market for coatings producers. 

    AkzoNobel, through its acquisition of ICI, has done a remarkable job in an attempt to bridge the gap between the coatings producer and the ultimate customer, the homeowner. Still, even with numerous outlets a large amount of architectural coatings provided by most producers still flow through contract painters rather than be purchased by the homeowner.

    The Forgotten Market

    The good news is that the emerging middle class in China appears open to take on a more aggressive participation role in the area of architectural coatings. The question to ask is, “Are the coatings manufacturers poised to take advantage of this apparent market change”? 

    Another way to phrase this question is, “Do the coatings manufacturers understand what the real drivers are for the Chinese Architectural Coatings market”? Reading various comments from many of the coatings producers it would appear that they have one thing in common; they tie their remarkable success to the unprecedented expansion of home construction inside China. In other words, their definition of success appears to be tied to a continuation of the unprecedented home construction in China. 

    If we look at history, tying eventual success to a market driver that is not fully understand, was not developed nor managed is at best dicey if not fool hardy. I fear that the majority of the coatings producers have forgotten what the real drivers for the architectural coatings market happen to be. Most of us understand that when something happens quickly, comes out of nowhere and takes off like a rocket that it can just as easily go away as quickly as it appeared.

    The Forgotten Market for the coatings producers in China is a genuine understanding of the true drivers that will keep them successful with their future strategies. Riding the unprecedented home construction growth is at best a short-term strategy. What happens when this growth levels out or worse, declines? Given the current makeup of the Chinese architectural market there doesn’t appear to be a good back up plan. Unless the coatings producers in China take on a more aggressive leadership role rather than ride on the coattail of other happenings there will be a day of reckoning and it won’t be pretty.

    Innovation is often tied to the needs of the marketplace. Sometimes when the market is expanding rapidly it’s difficult to stop and take a pulse beat to determine how healthy the market happens to be and what its needs are. I fear this is happening in China today in regards to architectural coatings. As many coatings companies are busy “minting money” so to speak, they have not recognized that they are not leading the market but rather they are simply riding the coat tails of events over which they neither understand nor control. 

    It is time for these coatings producers to return to doing what they know made them successful in other markets. It’s time to return to the basics of the Forgotten Market. It’s time to take on the responsibility of educating the consumer, of leading the development of the architectural coatings market so that in the long-term the coatings producers and the consumers of coatings, or homeowners, are in sync with each other. Until this market leadership change happens the real driver in the Chinese architectural coatings market will be more opportunistic in nature than strategic.
    Related Searches
    • akzonobel
    • odor
    • architectural coatings
    • paints
    Related Knowledge Center
    • Automotive Coatings
    • Industrial Coatings
    • Architectural Coatings

    Related China Reports

    • Adhesives and Sealants | Automotive Coatings | Wood Coatings

      PU Coatings Companies Exploring New Market Opportunities in China

      According to statistics from the China Polyurethane (PU) Industry Association, output of PU coatings was 750 thousand tons.
      Arnold Wang , China Correspondent 03.21.16

    • Architectural Coatings | Industrial Coatings

      China Architectural Coatings Market Enters A New Era

      ...
      Arnold Wang , China Correspondent 04.17.15

    • Automotive Coatings | Market Trends & Forecast

      Automotive Coatings Stays On Fast Growing Track

      ...
      Arnold Wang, China Correspondent 02.23.15


    • Automotive Coatings
      CHINACOAT 2012 Enjoys Huge Growth in Attendees, Exhibitors

      CHINACOAT 2012 Enjoys Huge Growth in Attendees, Exhibitors

      ...
      Dave Savastano, Contributing Editor 01.15.13

    • Adhesives and Sealants | Aerospace Coatings | Architectural Coatings | Automotive Refinish | Powder Coatings | Solvents | Wood Coatings

      Investments In China Continue To Expand

      As the paint, coatings, adhesives and sealants industries continue to grow in China so too does the amount of investments being made there by manufacturers. Pictured above, Henkel recently started construction for its 150,000 square-meter adhesives factory in Shanghai Chemical Industry Park. The new facility will be the main adhesives manufacturing base in China and the Asia-Pacific region.
      Tim Wright, Editor 10.10.12

    • Automotive Coatings

      The Road Ahead A Look at China’s Automotive Coatings Market

      Repair and OEM coatings markets are fundamentally very different, as one shadows automotive production and the other follows more closely with customer preferences. Luke Johnson, senior analyst at GCiS China Strategic Research, discusses some of the findings from their recent market study on automotive coatings.
      10.10.12


    • Market Trends & Forecast
      China: The Evolving Innovator or Continuing Imitator?

      China: The Evolving Innovator or Continuing Imitator?

      ...
      Dan Watson, China Correspondent 04.19.12

    • Market Trends & Forecast
      Impact Of A Lower Growth Chinese Economy

      Impact Of A Lower Growth Chinese Economy

      After years of unprecedented growth, China’s economy is cooling off a bit.
      Dan Watson, China Correspondent, watsoncw@rodpub.com 01.19.12

    • Market Trends & Forecast
      Improving the Odds of Success With Your China Strategy

      Improving the Odds of Success With Your China Strategy

      Looking beyond the glitter of China gold, here is a no-nonsense look at what it takes to enter the China market where all too often the risks outweigh the rewards.
      Dan Wastson, Blairgowrie Associates, Contributing Editor 10.12.11


    • Financial News | Market Trends & Forecast
      The Real Cost of High Growth

      The Real Cost of High Growth

      In recent decades, development has been prioritized over the environment, meaning that China now has some of the most polluted skies and waterways in the world. It is a situation that will take decades of extensive work to rectify.
      Dan Watson 05.09.11

    • Business Operation | Market Trends & Forecast
      Intellectual Property Protection

      Intellectual Property Protection

      IP theft in China is a serious issue. Are American companies turning a blind eye to the IP theft issue due to the fact that they are making huge profits in China?
      Dan Watson 03.10.11

    • Architectural Coatings | Automotive Coatings | Industrial Coatings | Market Trends & Forecast | Powder Coatings

      The Chinese Coatings Market

      It would be difficult to discuss the Chinese paint and coatings market without mentioning the Chinese economy. That vibrant, herculean economy is the heart and soul of the emergence of China onto the global scene in recent years.
      Dan Watson 01.20.11


    Trending
    • Raw Material Price Increases Pile Pressure On Paint Manufacturers
    • AkzoNobel Completes Titan Paints Acquisition
    • AkzoNobel Kicks Off Paint The Future Startup Challenge In China
    • Benjamin Moore Launches COMMAND
    • Hempel Announces Global Price Increase
    Breaking News
    • Croda Named Most Admired Company in British Chemical Sector
    • Ashland Increases 1,4-Butanediol, Derivatives Prices in Europe
    • First Source Worldwide, LLC Celebrates 20th Anniversary
    • Chromaflo Technologies Adds Benjamin Woeste as Territory Sales Manager
    • Maroon Group Acquires Cary Company's Raw Materials, Specialty Chemicals Distribution Business
    View Breaking News >
    CURRENT ISSUE

    February 2021

    • Mixing Equipment Directory
    • The Wood Coatings Market
    • Antimicrobial Coatings Market
    • View More >

    Cookies help us to provide you with an excellent service. By using our website, you declare yourself in agreement with our use of cookies.
    You can obtain detailed information about the use of cookies on our website by clicking on "More information”.

    • About Us
    • Privacy Policy
    • Terms And Conditions
    • Contact Us

    follow us

    Subscribe
    Nutraceuticals World

    Latest Breaking News From Nutraceuticals World

    Thymoquinone Inhibits Viral Infection in In Vitro Settings, New Study Finds
    IFT Transitions 2021 Annual Event to Digital Experience
    NY Federal Judge Enters Permanent Injunction Against Dietary Supplement Manufacturer
    Coatings World

    Latest Breaking News From Coatings World

    Sherwin-Williams Announces Resignation of President and COO
    Ashland Completes Expansion and Relocation of Viatel Bioresorbable Polymers Manufacturing Facility
    Evonik Receives Sustainability Award from EcVadis
    Medical Product Outsourcing

    Latest Breaking News From Medical Product Outsourcing

    Cretex CFO Announces Retirement
    New AI-Based Tool Developed for Coronary Artery Analysis, Intervention Planning
    First Reported Use of Pulse Biosciences' CellFX System
    Contract Pharma

    Latest Breaking News From Contract Pharma

    AGC Biologics Expands Cell and Gene Facility in Italy
    Celonic to Boost Cell & Gene Therapy Production
    Pharmaron Acquires Biomanufacturing Site in the UK from AbbVie
    Beauty Packaging

    Latest Breaking News From Beauty Packaging

    Ulta Beauty Opens in Herald Square
    Elizabeth Arden Taps Sui He as Global Brand Ambassador
    Natura &Co Outperforms the Global Market in Q4 2020
    Happi

    Latest Breaking News From Happi

    What You're Reading on Happi.com
    Indie Beauty Innovators Wanted
    Cosmetic Chemists Seek Mentors
    Ink World

    Latest Breaking News From Ink World

    Massilly North America Adds Koenig & Bauer MetalStar 3 Metal Decorating Press
    Hydrocarbon Solvents Market to Surpass $8.1 Billion by 2030
    Access Direct Mail Doubles Revenue with SCREEN's Truepress Jet520HD
    Label & Narrow Web

    Latest Breaking News From Label & Narrow Web

    Arjobex America welcomes Maggie Naberezny to sales team
    Henkel publishes 30th Sustainability Report
    Avery Dennison Smartrac launches new Circus Pro inlays
    Nonwovens Industry

    Latest Breaking News From Nonwovens Industry

    FPInnovations Develops Biodegradable Mask
    Sani Professional Sanitizing and Disinfecting Products Approved by EPA
    Autefa Solutions Offers Fully Automated Line for Protective Mask Production
    Orthopedic Design & Technology

    Latest Breaking News From Orthopedic Design & Technology

    Colfax Decides to Divide Its Businesses
    Stryker Corp.'s 2020 Sales Slip 3.6 Percent
    Bioventus Appoints Managing Director, China and Asia Pacific
    Printed Electronics Now

    Latest Breaking News From Printed Electronics Now

    Comercial Kywi Improves Customer Service, Front-Store Operations with Zebra Mobile Solution
    Global Printed Circuit Board Market Projected to Reach $69.32 Billion by 2027
    Global Smart Glass Market to Register 6.8% CAGR Between 2021-28: Grand View Research

    Copyright © 2021 Rodman Media. All rights reserved. Use of this constitutes acceptance of our privacy policy The material on this site may not be reproduced, distributed, transmitted, or otherwise used, except with the prior written permission of Rodman Media.

    AD BLOCKER DETECTED

    Our website is made possible by displaying online advertisements to our visitors.
    Please consider supporting us by disabling your ad blocker.


    FREE SUBSCRIPTION Already a subscriber? Login