The DOMOTEX show in Shanghai is another DOMOTEX global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.

 

The DOMOTEX show in Shanghai is another Domotex global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.#

Zwicker was speaking ahead of DOMOTEX asia/CHINAFLOOR, the largest international flooring show in the Asia-Pacific region, to be held from March 24-26, 2020.

 

The DOMOTEX show in Shanghai is another Domotex global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.#

The DOMOTEX asia/CHINAFLOOR is the place to go to see what the world has to offer, what the trends are, hear from many countries about what’s happening in their part of the world, meet new people key to the industry and greet old friends. There is no place like it. It is a well-organised and efficient way to stay in touch and on top, according to Zwicker, who has over 20 years of executive experience in manufacturing, distribution and retail.

 

The DOMOTEX show in Shanghai is another Domotex global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.#

When asked about his expectations for the global economy with regards to the flooring industry for the next 5 years, he said it is difficult to predict what will happen in just the next six months due to the current environment of many difficult geopolitical forces and trade negotiations underway. "However, economic trends underway are predictable. In the next two years, globally, we will experience a slowing of growth followed by renewed growth with a muted recovery, again. Through the five years, the average CAGR for flooring demand might be 3-4 per cent but we will experience negative growth for a period of time. Europe and China have already slowed. The US has slowed since late 2018. It appears that the negative growth will not be a fall from a cliff with deep decreases but instead an erosion-like decline of mid-single to high single digits. This is much different than the 2008-2009 recessions which caused a 40 per cent cliff fall in the US, triggered by the global financial crisis and starting the US “Great Recession”.  There is risk of a similar drop this time but not a high probability."

 

The DOMOTEX show in Shanghai is another Domotex global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.#

On the other hand, the Asian flooring industry will grow at a higher than average growth rate compared to the global growth rate, said Zwicker, who is now an International Flooring Consultant with clients in North America, China, and Europe. "Asia’s above average growth will be the result of strong local Asian demand, driven by increasing standards of living, but even more the result of increasing exports to the US and Europe from new investments in flooring production capacity ex-China.  Fundamentally the forces of lower labour cost, faster innovation, and more nimble investment will continue to make Asian produced flooring highly competitive for export. In the past decade China’s growth rate was the highest due to these flooring export advantages. Due to the shift in US trade policies, China’s advantages have either been stopped altogether or been reduced. Therefore, it is Southeast Asia which will get the benefit of the next recovery much the same China did during the recovery over the previous decade. However, while Southeast Asia’s benefit will be strong versus the US and Europe, they will not be as pronounced as China’s in terms of low cost and higher cost of investment. Meanwhile, China will find ways to continue to be a strong exporter despite the trade barriers, being a worthy competitor to Southeast Asia. So, both will grow faster in relation to the US and Europe."

 

The DOMOTEX show in Shanghai is another Domotex global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.#

Looking ahead to 2020 and beyond, US flooring companies will invest more in their US production, but they will have doubts which will somewhat mute and delay those investments. "The doubts stem from the volatility of the current US political environment and the lack of clear long-term policy in trade matters. Although most experts predict any future US political power will not revert to 'open trade' with China, US businesses are still dealing with many unknowns. But the major issue causing investment doubt is LVT," said Zwicker, who advises CEOs, MDs, owners, and boards in growth strategy, acquisitions, exit strategy, succession planning, executive teams, and CEO coaching.

 

The DOMOTEX show in Shanghai is another Domotex global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.#

LVT is the only flooring product growing in the US. All other product categories in the US are either stagnant or in decline. In Europe, LVT has also been a major force. The rise of LVT in Europe has not been as fast but its impact is similar. This impact will probably accelerate in Europe. "Europe, like the US, will be careful about making investments, especially in a near term future environment which will be recession at worse and very slow growth at best. Also, for both the US and Europe, the flooring industry has learned it can outsource products and avoid investments while also benefitting from innovation and the flexibility of quickly sourcing whatever product is 'hot' in the market. So, why not avoid investment risk and utilise the abundance of China and Southeast Asia export capabilities?" he asks.

 

The DOMOTEX show in Shanghai is another Domotex global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.#

However, hard surface flooring is expected to grow faster than soft surface in the US. Zwicker says, "I believe this trend is consistent around the world. Within the hard surface product arena, tile is the most widely used flooring product. Wood flooring product demand, like carpet, tends to be a bigger part of demand in some world areas but not across the world. LVT tends to be a consistently faster than average growing product type within hard surface. Laminate is as well but LVT has taken share from laminate. Traditional vinyl flooring products have also lost share to LVT. However, LVT is a complicated product category as evidenced by the fact experts cannot agree on terminology and definitions under the broad heading of LVT. There is the original flexible type and sub-types of what is called multi-layer flooring (MLF) types of LVT, commonly referred to as WPC and SPC."

 

The DOMOTEX show in Shanghai is another Domotex global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.#

In the past decade, there have been ten trends in flooring in the US, but LVT has been the single most impactful. The other trends were: tiles versus rolls; hard surface growth; certifications and regulatory environment tougher; style proliferation; installation choices and ease; industry more global, more trade and cross continent investment; China exports and innovation increase; demand shift towards “value”, lower ASP; and improved visual technology - product categories blur.

 

The DOMOTEX show in Shanghai is another Domotex global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.#

Speaking about how the tariff situation has impacted the flooring business, Zwicker said, "The trade barrier issue in flooring is concentrated in US and China trade specifically, China export to the US. The tariff on all flooring increased to 25 per cent, the anti-dumping duties on engineered wood flooring increased, and new duties are being placed in tile. The tariff did not decrease trade but did start a shift to US importers looking to ex-China sourcing from Southeast Asia. Most experts believe the tariff may be reduced but not go away. Let’s face it, the US treasury benefits from the increased revenue and the political environment would not react well to removal of tariffs, unless there was a huge pro-US deal with China.  And, that will not happen. The duties will not go away for at least five years. Unlike tariffs, duties are semi-permanent. Tariffs can be removed in an instant with a Tweet."

 

The DOMOTEX show in Shanghai is another Domotex global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.#

Meanwhile Asian countries like Thailand, Cambodia, Malaysia, Singapore, and Vietnam are becoming attractive for North American distributors and wholesalers. "Many Chinese flooring companies are making investments and forming partnerships in these countries," said Zwicker, who is currently a director of Virginia Tile Company, one of the largest companies in its field.

 

The DOMOTEX show in Shanghai is another Domotex global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.#

The top things that American buyers look when signing business deals are: First, they look for a product that has functional performance features which stand out to end users. Second, the price and quality must be acceptable compared to alternatives available to the buyer. Third, the buyer wants to be able to trust the supplier in terms of relationship but most importantly delivery reliability. Lastly, the buyer wants to do business with someone who knows how to do business the US-way and therefore is easy to work with and grow together.

 

The DOMOTEX show in Shanghai is another Domotex global flooring industry show which features China and increasingly Asia. The participants are global in nature and number. The industry is global, and this is reflected in the Shanghai show, says Bruce Zwicker, who was CEO of JJ Haines, the largest US flooring industry distributor, for fourteen years.#