Dutch paint and coatings maker Akzo Nobel is setting its sights on Chinese millennials to help propel sales in the world’s second-largest economy amid a slumbering property market.
Chinese youth will be the biggest growth driver for the company, according to Lin Liangqi, president of Akzo Nobel China.
He expects double-digit annualised sales growth on the mainland.
“Sales of new homes slowed in China, and we believe it is the right time for us to adjust our strategies in the big market,” he told thePost. “The demand for repainting among Chinese consumers born post-1980s and post-1990s is increasing rapidly and we want to tap their changing habits on refurnishing.”
Millennials refer to those aged 24 to 38 years old. The demographic represents about 400 million
individuals in mainland China.
In the developed Western economies, an average household repaints every three years, compared to at least eight years in China, said Lin.
“The gap is narrowing and will continue to narrow,” he said, referring to the changing aesthetic tastes among the millennial demographic. “That is a market we need to focus on now.”
Dulux architectural paint, owned by Akzo Nobel, and Nippon Paint are now the two bestselling foreign brands for architectural purposes in China, Lin said.
Dulux has launched a new marketing strategy which uses the catchphrase “Let’s Colour” in a bid to woo more young Chinese homeowners eager to express their individualism.
“Chinese homeowners are increasingly aware of the fact that colour can make a big difference in home decor,” Lin said. “It can make living spaces more fun, liveable and enjoyable.”
Wealthy Chinese turn to high-end materials as they seek value for money in home renovations
According to the China National Coatings Industry Association, China’s home repainting market could see annual sales of more than 100 billion yuan (US$14.5 billion) in the next few years.
More mainland homeowners are embracing higher-quality, eco-friendly building materials, a shift brought by rising affluence.
“Since the property market is weak, the companies in the home improvement sector are closely monitoring the refurnishing habits of the existing homeowners,” said Cao Hua, a partner at private equity firm Unity Asset Management. “Big name brands also have opportunities to conduct mergers and acquisitions to increase market share.”
Lin said Akzo Nobel has plans to expand on the mainland through acquisitions.
Akzo Nobel operates 15 factories in China, employing 6,000 workers.
Sales in China, the company’s largest single market, rose to 1.49 billion euros (US$1.7 billion) in 2017, accounting for 12.3 per cent of its global total.