Sofa so bad: China’s home-furnishing sector hits a do-or-die moment
Falling home prices and relentless price competition are forcing small decor firms into a battle for survival
With no property resurgence in sight, the industry, which employs millions of labourers across the country, was likely to see thousands of players expelled from the highly competitive market this year, according to company officials and analysts.
“Involution is the name of the game in the home decor market,” said Yan Jun, a senior executive with Shanghai-based Jinghan Stainless Products, which designs and makes steel windows for household use. “Clients want to save furnishing costs and keep trying to bargain down prices while more competitors, who are desperate to get business, are willing to offer huge discounts.”
In mainland China’s business lexicon, involution refers to fierce competition that drives down prices and undermines sustainable growth. In some cases, manufacturers sell products below cost just to keep rivals at bay.
Home furnishing and residential property are closely intertwined in China, as a buoyant construction industry and sizzling housing sales once ushered in surging demand for home decor.
According to Hunan Zonghengjia Brand Consulting, the mainland’s home decor sector generated revenue of 2.68 trillion yuan (US$387.9 billion) in 2025, up 2.8 per cent year on year.