The report mainly aims to introduce some constructive suggestions in the development process of China's ceramic tile industry that may have reference significance for the development of Vietnam's ceramic tile industry. The report especially mentions that "tile export is an important direction for breakthrough of Vietnam tile industry ", which also intends to imply that Chinese tile exporters can find sources from Vietnamese factories and continue to export tile products.

01 Overview of Chinese ceramic industry development

1.1 Annual production of ceramic tiles in China

Table 1: Annual production of ceramic tiles in China, 2001-2022

Source: China Building and Sanitaryware Association

From the data in Table 1, we can easily find that China's tile production grew in double digits for eight consecutive years from 2004-2011; and in 2018 After that, China's tile production continued to decline into a negative growth phase (which is somewhat similar to the changes in Vietnam's tile production in the past 10 years).

China's annual tile production, from the peak of 10.265 billion ㎡ in 2016 to decline to 7.31 billion ㎡ in 2022 (many Chinese industry insiders believe that in 2022 China's tile production did not reach this order of magnitude), in other words this six-year period, China's tile production is less than 3 billion ㎡ reduction, perhaps this trend will continue.

1.2 China's tile exports

Table 2: 2010-2022 China tile export data

Source: China Building and Sanitaryware Association

The data in Table 2 shows that the annual export volume of Chinese tiles slumped from a peak of 1.148 billion m² in 2013 to 582 million m² in 2022, almost close to a cut in ten years. Fortunately, the average unit price of China's tile exports hit a new high in 2022, reaching: 8.53USD/㎡.

There are two main reasons for the massive decline in Chinese tile exports, one is the anti-dumping of Chinese tile exports around the world, including mainly the EU-27, the world's largest tile importing country, the United States, the earliest anti-dumping of Chinese tiles in India, the Gulf 6 countries and so on. Chinese bosses directly in overseas factories, mainly in Africa, South America, the Middle East and the CIS countries, the current Chinese overseas investment in tile production lines close to 70, with an annual output of about 600 million square meters.

1.3 China's tile export destination countries/regions and world tile imports

Table 3: China's tile export destination countries/regions, 2022

Table 4: Top 10 tile importers in the world

The data in these two tables basically give the direction of our tile export destinations.

1.4 China's tile manufacturing

①The continuous improvement of the equipment level of Chinese tile manufacturing, basically fully in line with the world's most advanced technology and equipment, which makes our requirements for raw material process simpler.

② Tile production line large line, long line, roller dryer enhance tile production on a large-scale, effectively reduce the cost of production. (Chinese system of tile production)

③ Former tile products accounted for a large proportion of polished tiles (the highest proportion of > 30%), porcelain tiles (the highest proportion of > 30%) significantly reduced. At present, the proportions of several types of ceramic tiles in China: polished tiles (4.76%), tiles (15.91%), and exterior wall tiles (5.01%) are declining. Porcelain glazed tiles have become the mainstream products. Thick bricks have emerged on a large scale, and there are more than 100 production lines nationwide, accounting for an estimated 2.66%.

④ Tile specifications are getting larger. At present, the mainstream product sizes are 600*1200mm, 750*1500mm, and 900*1800mm, among which 750*1500mm has the largest ratio, and 800*2600mm is also popular. Some believe that the future mainstream product specifications for 1200*1200mm. I do not fully agree with this view, tile products should be developed in the direction of modulization, 600*600, 450*900, 600*1200, 900*1800, 900*900, 900*2700mm or become a series of modulized products.

⑤ After 2018, China's ceramic slab rock panel production lines have increased massively, and it is estimated that China can now produce more than 200 ceramic slab rock panel production lines with specifications above 1200*2400, which is obviously surplus, and there are more than 400 production lines in total for medium and large specifications. The application details of rock slabs in terms of kitchen and bathroom home areas are complex and slow to develop.

⑥ The overcapacity and overproduction of ceramic tiles in China are very obvious.

1.5 China's tile market structure is changing

① In 2021, China's real estate burst, resulting in the decentralization and fragmentation of building materials and household products marketing channels.

② Re-understand "embrace capital + embrace real estate". Tile marketing is back to the dealer era, but not the traditional retail era. Traditional distributors turn to distribution service providers.

③ Whole decoration (including Internet home decoration, whole house customization, decoration package, etc.), real estate dominated by Party A, commercial space led by designers, commercial chains and other small B-ends have become the main battlefield of ceramic tile marketing.

④ The vertical extension with finished product delivery as the core has completely changed the after-sales of tile products. It brings integrated services to consumers, increases order value to dealers, and manufacturers can perfectly display product quality and brand. Ceramic slab rock products promote the delivery of finished products.

⑤ The horizontal expansion with multi-category integration as the connotation has become a new marketing trend. The era of the terminal big store and multi-store has passed. Various forms of integrated stores, collection stores, micro-mini-supermarket began to appear, reducing the cost of opening a store, sharing customer resources, mutual driving marketing.

02 Vietnamese Tile in the World Pattern

Table 5: Top 10 tile production and manufacturing in the world

Before 2021, Vietnam has been the world's fourth largest ceramic tile manufacturer after China, India, and Brazil (see Table 5). In 2021, Vietnam's tile production declines by 30.7% to the world's 9th largest producer and manufacturer, from a peak production of 602 million m² in 2018 to 370 million m² in 2021, ostensibly due to a 25% decline in domestic tile consumption (see Table 6). In fact, the main reason is the decline in real estate and the COVID-19 epidemic. (Here the tile data are basically from Acimac in Italy. Regarding the ceramic tile production in Vietnam in 2021, the Vietnam Building Ceramic Association believes that it still reached 500 million square meters)

Table 6: World tile consumption TOP 10

According to the recent interview with Vietnam Building Ceramic Association in early 2023, Vietnam's annual tile production in 2022 is 450-500 million ㎡. There are 80 tile manufacturers in Vietnam, 240 production lines, production capacity of 800 million ㎡. In 2022 Vietnam's population reached 97,338,600, and will reach 100 million people in April 2023.

Table 7: Top 10 tile exports in the world

03 Opportunities for further development of Vietnamese tile

3.1. domestic market

2017 and 2018 are the peak periods of ceramic tile production and consumption in Vietnam, with the highest output reaching 602 million ㎡ (2018), the highest domestic consumption reaching 580 million ㎡ (2017), and the annual per capita ceramic tile consumption close to 6 ㎡.This per capita annual tile consumption is also at a high level globally, but not the highest.

The annual per capita consumption of ceramic tiles in Vietnam in 2021-2022 is in the range of 3-5 square meters. Vietnam's domestic tile consumption still has enough room for development. The key is the overall economic development, the improvement of people's living standards, especially the development of real estate.

Vietnam has an urbanization rate of 41%. Relative to major countries in the world, Vietnam ranks 28th in terms of urbanization rate. China's urbanization rate is 60%, ranking 24th. In the future, Vietnam's urbanization rate will definitely increase significantly, and this process will definitely bring an increase in the application of ceramic tiles.

3.2. International market

Vietnam's tile exports have not yet entered the top 10 series globally, and the 10th largest tile exporter in 2021 is Mexico with 41 million ㎡ (as shown in Table 7). It is estimated that Vietnam's current tile exports are around 30 million ㎡.

China's tile exports over the past 10 years: from 1.148 billion ㎡ (2013) → 582 million ㎡ (2022) (as shown in Table 2), freeing up 566 million ㎡ of space for the international tile import and export market, a trend that seems to continue.

Table 8: World tile export distribution and share

The international market for ceramic tiles maintained strong growth in 2021, up 8.7% year-on-year to 3.013 billion m².

3.3 Tile is a sustainable building decoration material

Ceramic tile is a traditional industry that is undergoing tremendous changes. It is an all-round alternative to stone (marble, granite, artificial stone, etc.) Ceramic slate is replacing various plates, and is expanding its application in the direction of household kitchen and bathroom customization. 

The ceramic tile industry is still a highly fragmented industry with distinct personalities. Developing countries will not become oligarchy in the short term, and everyone has a chance.

3.4 Privatization of the ceramic tile industry, fully handed over to the market 

To comprehensively enhance the competitiveness of a country's tile industry, it is important to privatize and marketize the entire industry, privatize tile companies, and fully compete. Now China's ceramic tile industry is almost 100% dominated by private enterprises, completely market-oriented. 

3.5 Introduce foreign capital, increase competition, introduce digestion and absorption

In particular, introduce successful Chinese ceramic tile companies, or cooperate with Chinese ceramic companies, or join ventures or OEM export.

The export of Vietnamese ceramic tiles should absorb at least 30% of the reduction in Chinese ceramic tile exports, which is 200 million square meters, which is 40% higher than the current output of 500 million square meters. It seems that this data is very large, but it is actually well-documented on a global scale, which means it is completely possible.

3.6 Export of tiles is an important direction for Vietnamese tiles to break through

①Anti-dumping and prevention of anti-dumping: Protect Vietnam’s ceramic tile industry through anti-dumping; the association applies to the relevant national customs department for the establishment of a minimum export price for Vietnamese ceramic tiles, so as to avoid vicious competition within the industry and cause anti-dumping in the destination country for ceramic tile exports.

②Associations (or several ceramic companies cooperate) and the government to establish ceramic tile industry export bases, similar to the China Ceramic City (CCC) in Foshan, forming a display center, trade center, and even a logistics distribution center for export ceramic tile products. Combining online and offline to develop cross-border e-commerce. Let overseas importers and exporters find the tile products they need in one stop in Vietnam.

③The association came forward to organize the relevant "Vietnam Ceramic Tile Export Forum", inviting Chinese ceramic tile export companies to participate in the meeting, and making use of Chinese ceramic tile export talents. Or organize symposiums and exchanges between Vietnamese ceramic enterprises and Chinese export companies and individuals to comprehensively establish mutual connections.

④ During the Vietnam Ceramics Exhibition, business personnel from embassies of relevant countries will be invited to organize special export activities in important exporting countries or regions. Organize ceramic enterprises to participate in exhibitions abroad and collectively, to comprehensively build the brand image of Vietnamese ceramic tiles.

3.7 Improve ceramic tile production system and scale up the industry

Build long lines, large lines, shorten the firing cycle, reduce costs, increase industrial concentration, and seek benefits from scale.

Table 9: World Tile TOP10

The data in Table 9 shows the TOP10 tile companies in the world. The largest Mohawk company has an annual output of 250 million square meters of tiles, and the 10th also reaches 67 million square meters. According to the data of China's ceramic tile production capacity survey in 2022, among the top 20 ceramic enterprises with production capacity, the 20th also has an annual production capacity of 87 million square meters, and the first reaches an annual production capacity of 254 million square meters.

The length and width of the single-line kiln also have a great impact on the cost of ceramic tiles. According to relevant media reports, the Saudi Sapphire Ceramics Factory has a production line with a daily output of 100,000 square meters. The largest production line in China has a daily output of 70,000 square meters. Production lines with a daily output of 40,000 to 50,000 square meters are everywhere.

For ceramic tile production, ceramic enterprises have a starting scale effect. It is generally believed that 4 production lines are a basic scale, because your senior management configuration in production, marketing, etc. is the same.

3.8 While promoting the development of ceramic tile industry, develop supporting industries

While developing the ceramic tile industry, pay attention to the corresponding supporting industries, especially mechanical equipment and chemical color glazes. They are the main engine for ceramic tile product innovation, industrial manufacturing level improvement, energy conservation and emission reduction and environmental protection.

3.9 Response to fragmentation and decentralization of ceramic tile marketing

The largest part of this decentralized stock market is called the small B-terminal in China, which is the decentralized business terminal. Mainly include: the new infrastructure of the national team, the public facilities of the local government, the real estate of Party A, office space, commercial space led by designers, commercial chains, refurbishment, old renovations, etc. Their biggest feature is that they are similar to centralized buying as a whole, but scattered. The business services of small B-terminals especially require relevant information to be accurate and relevant. According to relevant market consulting information, the small B-end accounts for more than 1/2 of the ceramic tile sales market.

3.10 Brand and Innovation

Brand and innovation are the eternal theme of ceramic tile development. However, in the 40 years of development of Chinese ceramic tiles, on the one hand, the brand has been continuously improved, and brand awareness and brand concentration have been continuously improved, but on the other hand, ceramic tile products have been running wildly on the road of their material properties. Due to insufficient protection of the spirit of innovation and intellectual property rights, the innovation of our entire industry is insufficient. Moreover, it is estimated that only 20% of pottery companies that have worked hard and invested heavily in branding and innovation have success and 80% have failed.