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Spring Air sees vast opportunities in China

By David Perry, Executive Editor -- Furniture Today, April 11, 2004

A trip to China is becoming an important exercise for top bedding executives. Jim Nation, who just finished his first "homework assignment" in China, shared his preliminary report with me the other day.

The president of Spring Air admitted he got a big surprise when he joined a high-level delegation of Spring Air licensees on a recent tour of China.

"I was completely blown away," Nation said, back on U.S. soil and recovering from a case of jet lag. "It was not what I expected. It was much more sophisticated. Shanghai has thousands of skyscrapers and thousands more under construction. It also has a first-class airport and first-class hotels."

He also was impressed with the rapid capitalization in the country and the equally rapid development of the middle class.

The Spring Air executives went to China to see for themselves if developments there could affect their business.

"Look at the effect China has had in the case goods and upholstery industries," Nation said. "We wanted to see if there is an opportunity there for Spring Air, or if there is a threat. I walked away with the idea that there is a lot of opportunity and not very much of a threat."

The Spring Air managers were impressed enough with Chinese-made mattresses to decide to test some of those products in the U.S. market. That producer will be the first major to test Chinese-made beds, which likely will retail from $299 to $499 in queen in the United States.

Nation sees "potentially significant savings" by bringing in Chinese-made mattresses, but he notes that Chinese producers don't know how to make beds for the U.S. market. Quality control will be critical, he said.

On the component side, he doesn't believe Chinese-made innersprings, a hot topic in the industry these days, have the breadth of offerings to be a major force in this country.

Where Nation see the biggest opportunity is in the marketing of branded bedding in China, a country in which Spring Air has no licensee. The expanding middle class could grow to five times the size of the entire U.S. market, offering a vast, potentially lucrative opportunity for marketers of Western-style products and brands that affluent Chinese consumers have a taste for.

The trip to China won't be Nation's last. He says he will be returning again to further explore business opportunities.

Some of his findings were similar to those of other bedding producers who recently have visited China. China's middle class offers huge potential, U.S. producers agree.

But it won't be easy. There's a lot more homework still to be done.

Opinion columns are available online atwww.furnituretoday.com .

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