Is the Thai decoration industry easy to do-SUNNY COTTAGE CO., LTD.

Is the Thai decoration industry easy to do

Whether the decoration industry in Thailand is easy to do depends on various factors. The following is a specific analysis:

Favorable factors

Market demand growth: The sustained economic growth and accelerated urbanization process in Thailand have led to a continuous expansion of demand in the building decoration market. In 2019, the total output value of Thailand’s construction industry reached about 56 billion US dollars, of which the decoration and renovation part accounted for about 18%. In addition, with the improvement of people’s living standards, the demand for high-quality and personalized living environments is increasing. Consumers are no longer satisfied with simple living functions, but pay more attention to the comfort, aesthetics, and environmental friendliness of the living environment.

Cultural factors contribute to the surge in demand for traditional Thai decorations among Thai consumers, who hope to showcase their country’s cultural heritage through these decorations. At the same time, the booming tourism industry in Thailand has also driven the demand for home decoration products, and tourists hope to purchase Thai specialty decorations as souvenirs.

Government policy support: The Thai government’s support policies for the construction industry are also a key factor in promoting industry development. The government has introduced a series of measures aimed at promoting the development of the domestic construction industry, including tax incentives, fiscal subsidies, and opening up to foreign enterprises.

The industry competition environment is relatively good: From the perspective of industry competition, the interior design service industry in Thailand has a relatively low level of competition. The number of enterprises in this industry is relatively small, and compared to the growth of the real estate industry, the number of competitors is insufficient. In addition, the industry has low fixed costs and no investment in product inventory or expensive equipment.

Low bargaining power of suppliers: In the interior design industry, suppliers are divided into two levels: design, material supply, and construction labor. Suppliers at both levels have low bargaining power because their services are considered commodities. At the design level, many competitors compete with each other on price, which is a great advantage for interior design companies.

Moderate bargaining power of customers: Customers have moderate bargaining power in the industry. Due to the need to customize the design process for each individual customer, there is no threat of product backward integration. Despite fierce competition in some niche markets such as residential, the price of design services is highly correlated with the perceived value of customers in the high-end project niche market. Therefore, customers are not price sensitive and are unwilling to choose the cheapest service provider.

Low threat from new entrants: The entry threshold for the interior design service industry is relatively low because the business does not require investment in products or materials. In addition, fixed costs are easy to manage and outsourcing is also easy to find. Nowadays, many designers can start their own business with just one laptop in a co working space or coffee shop.

Challenge

Intense market competition: Bangkok and other major cities have gathered numerous well-known decoration companies, which have high competitiveness in terms of service quality, design level, and customer satisfaction. New entrants need to provide high-quality services, competitive prices, and good customer service in order to stand out in the market.

Difficulty in cost control: The costs of materials, labor, and equipment are the main expenses of decoration projects. In big cities such as Bangkok, these costs may vary due to project size and complexity, and effective cost control and efficiency improvement are crucial for a company’s profitability.

Legal and regulatory restrictions: Thailand has relatively strict regulations on the construction industry, requiring compliance with a series of standards and regulations from design to construction. For foreign investors, understanding and complying with these laws and regulations may be a challenge, but it is also a necessary condition to ensure the smooth progress of projects and legal and compliant operations.

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Is the Thai decoration industry easy to do

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