In 2012, the ceramics industry experienced its slowest growth in over a decade, marking one of the most challenging years for many companies. In 2010, the industry saw output growth of more than 30%, followed by 20% in 2011. However, in 2012, the growth rate dropped to just 6.6%, marking the first time in years that the industry saw single-digit growth. The tile sector, which had previously grown at rates of 14%, 17%, and 18%, saw its growth plummet to around 3%. Despite this, profits and taxes continued to rise significantly, with some sectors growing by over 20% or even 30% annually. While overall profit growth was modest—around 8% for the entire industry—certain segments, like sanitary ceramics, showed little to no growth, and some companies even faced losses.
Small and medium-sized enterprises (SMEs) struggled during this period, with many experiencing very slow growth. In contrast, large companies fared better, with some, such as Xinzhongyuan, Nobel, and Marco Polo, seeing steady profit increases after making internal adjustments. This trend highlighted a growing divide between big and small players in the industry.
According to an analysis report, 2013 was expected to bring a "moderate rebound" for the ceramics industry. Market polarization became increasingly evident, with larger brands gaining more market share each year. For example, Nobel achieved sales of 40 billion yuan the previous year and reached 50 billion yuan in 2012, with continued growth expected. Some companies have even surpassed 80 or 100 billion yuan in annual sales, further concentrating the industry. As a result, smaller companies either needed to specialize in niche markets or risk being left behind.
The shift toward e-commerce also became a significant trend. According to a survey conducted by the association in 2012, the share of engineering sales increased while retail sales declined. E-commerce's role in the industry grew rapidly, doubling in importance. While large companies already had strong online presence, smaller businesses relied heavily on e-commerce. This shift posed new challenges for traditional dealers.
Exports performed well in 2012, with national average growth exceeding 26%. Ceramic tile exports, though not massive in volume, saw a 6-8% increase, while export value rose by 3.3%. Anti-dumping measures played a key role in pushing the industry toward higher quality products. Although the EU imposed a 40% tariff last year, leading to a 20% drop in exports to the region, prices doubled, indicating a shift toward premium products. This structural adjustment helped eliminate low-quality products and promote better exports.
Sanitary ware exports declined slightly by 10%, but product quality improved. China’s low-end products are becoming harder to sell, while high-end products still face barriers. As a result, many companies are now targeting the middle segment. Rising labor and raw material costs have made it difficult for Chinese firms to compete in low-end markets, prompting many to shift production to countries like Vietnam and India.
This year, hiring is expected to be slightly better than last year, with many companies struggling to find workers. Labor costs continue to rise, and the industry faces a severe shortage of skilled labor. Many jobs, especially in sanitary ware manufacturing, are now filled by older workers, as younger generations avoid manual work. Automation and digitalization will be crucial for the industry’s future survival.
Energy-saving and emission reduction remain central to the industry’s development. The association has long advocated for these initiatives, as they directly impact the survival of ceramic companies. Over 90% of companies eliminated in recent years were due to environmental compliance issues. With PM2.5 becoming a major concern under the "Thirteenth Five-Year Plan," stricter regulations are expected. The ceramic industry is classified as one of the six major industries to be phased out, alongside cement. Companies that fail to meet energy and emission standards may be forced to close.
Distributors are also facing pressure to reduce tile thickness, which could save millions of tons of coal and raw materials annually. Leading companies like Nobel and New China Resources are already producing thinner, more sustainable tiles that meet national standards. This shift not only supports environmental goals but also brings significant economic benefits.
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