In April, the sanitary ware industry was almost in a promotional frenzy, but this time, people weren’t rushing as they used to. After years of rapid development, the sector has faced serious product homogenization, frequent price wars, and aggressive sales promotions. At the same time, rising costs have led to shrinking profit margins. Industry analysts warn that if companies keep fighting on price, consumers will ultimately suffer. To break through, sanitary brands need to differentiate themselves and find new selling points.
**The End of the Profit Era: The Rise of Promotional Economy**
China’s sanitary ware industry has grown for over 20 years, becoming the world's largest producer and seller of bathroom products. According to Ge Liwei, General Manager of Henan Long Whale Sanitary Ware, before 2000, international brands like Kohler and TOTO entered the Chinese market, enjoying a golden era with high returns. However, after 2005, domestic brands began to rise, giving birth to national names such as Wrigley, Hengjie, Langyu, and Shenluda.
“Back then, the building materials industry was seen as a highly profitable sector,†said Ge Liwei. “But from 2008 onwards, the era of huge profits came to an end, and we moved into a promotional economy where sales became the main focus.â€
**Changing Market Dynamics: Higher Costs, More Rational Consumers**
Today, competition is fiercer than ever, and consumers are more rational. Meanwhile, various costs are increasing, making it harder for the sanitary ware industry to thrive. Many bathroom business owners feel the pressure.
Wang Wenxin, General Manager of Henan Branch of Shenluda, shared his experience: “In recent years, competition has intensified, and consumers are more cautious. You can’t just invest hundreds of thousands and expect immediate returns. Raw material costs are up, factory prices are rising, but retail prices aren’t following suit. Labor costs have gone up by more than 20%, and store rents continue to climb. Profit margins are shrinking rapidly.â€
**Current Situation: Homogeneous Products, Frequent Promotions, and Shrinking Profits**
Despite rising costs, the price war has only gotten worse. Consumers are no longer enticed by frequent discounts, cash prizes, or sign-up offers. Over time, these tactics have made them numb and less responsive.
Industry insiders note that major brands are now offering similar products and promotions, which puts downward pressure on profits. Some companies have seen their gross profit margins drop from 40% to around 20%. Even some special products are being sold at a loss, with profit margins squeezed further.
Ge Liwei admitted, “A toilet costs at least 500 yuan to produce, including shipping. We introduced a 399-yuan model to gain market share. Last year, our monthly profit was negative.†He also shared a strategy: “Every store must participate in large-scale promotions. If you don’t join, you lose the market. But even if you do, you may not make money. Last year, one store had a promotion and made 15% profit, but it was a long and hard process with little reward. However, in the past two years, we’ve gained significant market share and built a good reputation.â€
**Path Forward: Innovation, Differentiation, and New Growth Points**
With highly homogenized products and excessive price wars leading to ultra-low profits, many companies are turning to OEM manufacturing to cut costs. While this boosts short-term sales and benefits consumers, it’s not sustainable for long-term growth.
Zhao Dong, Deputy General Manager of Henan Hengjie, pointed out that price wars hinder healthy development. Companies have less time to focus on R&D, technology upgrades, and after-sales service. “The old model of extensive growth is no longer suitable,†he said. “Companies are starting to change, seeking breakthroughs, innovating, finding new selling points, and differentiating themselves.â€
**Green Innovation: Environmental Protection as a Key Selling Point**
As environmental awareness grows, sanitary products must align with eco-friendly values. From raw materials to design, companies need to emphasize health and sustainability.
Hengjie’s Super Hover series H0129D toilet, for example, uses only 3.5L of water per flush—far below the national standard of 6L. Zhao Dong calculated that in Zhengzhou, where water costs 2.4 yuan per ton, this toilet saves 40% of household water usage. “For every 100 yuan spent on water, 40 goes down the toilet,†he said.
**Smart Technology: The Future of Sanitary Products**
The future of the industry lies in smart technology. Toilets will soon be able to measure weight, analyze urine, and monitor health. Leroy Guoji, Deputy General Manager of the Kingdom, explained that smart toilets will automatically turn on lights, open lids, and adjust seat temperatures. They’ll even offer rinsing, massage, and sterilization features, all while playing music.
In the future, a toilet could detect health indicators and send alerts to the user. This level of integration is already being realized, and it signals a shift toward high-tech bathroom solutions.
**Urbanization: A Potential Recovery for the Industry**
Some industry insiders believe that urbanization will create new demand and potentially revive the ceramic industry, which has been struggling. For instance, Shenluda has expanded into third- and fourth-tier cities, establishing over 70 distributors across 18 cities in Henan.
Wang Wenxin noted that their strategy is to stabilize prefecture-level and county markets. “We’re taking a ‘surrounding the city from the countryside’ approach, and it’s working well right now,†he said. In March, six local events generated an input-output ratio of at least 1:8, with some reaching 1:23—something impossible in the bigger cities.
**Service as a Competitive Edge**
Beyond pricing and marketing, service quality is becoming a key differentiator. Future competition will be driven by customer experience.
Ge Liwei emphasized that even though a product might cost 399 yuan, the service shouldn’t be compromised. His company now offers full delivery and installation services, eliminating the need for customers to take days off work. After-sales support is also being improved, with more humane follow-ups and better guarantees.
In conclusion, the sanitary ware industry is at a crossroads. With rising costs, shrinking profits, and a saturated market, companies must innovate, differentiate, and focus on sustainability and technology. Only those who adapt and evolve will succeed in the coming years.
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