Growth Trajectory in China
More than 25 million new apartments and hundreds of thousands of high-rise apartment blocks are built every year in China. The country continues to develop at breakneck pace, and the key driver of this trend is urbanization. By 2030, seven out of every ten Chinese inhabitants will be urban dwellers, and a further 150 million people will have moved to the city in the meantime.
Building Finishing Business Booms
In parallel to this surge in need of new accommodation, demand for construction materials used in the finishing of buildings is also rocketing. China differs from the world’s other major construction market in one very particular way: be it in Shanghai, Shenyang, or Hangzhou, construction companies build apartment blocks as shell constructions. The fitting of kitchens, installation of bathrooms or the laying of floors is the task of the apartment owner.
For Sika, the Chinese market offers enormous potential, particularly in the mortar business, and this potential has increased with the successful integration of Parex.
"Sika has a strong brand and broad spectrum of products, while Parex has the distribution network and the direct access to clients on the retail side. When it comes to the finishing of buildings, Sika offers a wide of range products, from facade mortar, tile glue, and waterproofing systems through to sealants and adhesives. And with the takeover of Parex, we have at a stroke acquired a presence in 1,200 cities, and thus cover around half of the entire market. " Olivier Chaudet, Head of Building Finishing China
Increasing Share of Sales Across the Group
Sika is looking to increase its share of sales not only in China, but all over the world. By 2023, the group aims to increase the proportion of its business done in distribution to more than 40%. This will enable Sika to gain additional market share, particularly in countries where its products have up until now been primarily sold directly through projects, via general contractors and planners.
The integration of Parex has given Sika an enormous boost in China. The company now has access to the 3,000 exclusive shops of Davco – the brand under which Parex sells its products – as well as a further 110,000 points of sale across the country. This is a crucial breakthrough, as it is not the major construction markets that dominate the business in China. In order to meet their needs, local craftsmen typically drive their trucks and vans to one of the shopping streets on the urban periphery, where numerous shops vie for their business. And here, next to the Davco products, Sika is now offering a selection of the very best sealants and adhesives.
“Right next to established mortar products, craftsmen can find everything they need to install basins and bathtubs efficiently and reliably,” points out Olivier Chaudet.
Global Distribution: Large Potential for Growth
Annual Tiler Competition
To help craftsmen use the products in the best way possible, Davco offers targeted training in its stores. Every year, more than 60,000 tilers throughout China learn the benefits of Davco’s product range in this way.
The bond with craftsmen is also strengthened at the annual tiler competition. Since 2014, competitions have been held, first regionally and then nationally, to identify the best tilers in China. In 2019, thousands of professionals took part in 47 regional competitions, and more than 20 qualified for the national competition.
For the first year the competition went international and included not just the best tilers from China, but also from Paraguay, Argentina, France, Morocco and Australia. The winner and runner-up were tilers from China, followed closely by the Australian champion.
