Homeownership in China, which was non-existent two decades ago, has increased to 70% today. New homeowners have to fit up the basics like flooring, plumbing and furniture, as the houses are unfinished ones. This has encouraged consumers to engage in do-it-yourself (DIY) and home improvement/decorating activities. Coupled with huge potential growth and housing reforms, China's home improvement market attracted many domestic players and a few foreign home improvement retailers like IKEA and B&Q. Atlanta-based Home Depot, the world's largest home improvement retailer, is weighing its China options: should it enter or not; if it decides to enter, should it go alone or should it operate through a joint venture. However, the bigger question doing the rounds is whether Home Depot has lost out to early entrants; is it going to suffer from late-mover disadvantage or is the delay a blessing in disguise because its learning curve is shortened.

China, the fastest growing economy in the world is wit- nessing a rapid growth In the private housing market, since its introduction of housing reforms in 1998. As the Chinese people's income and purchasing power increases, their property investment is also on the rise. In 2005, real estate investment accounted for 8.65% of China's GDP and it is expected to rise to 9.3% in 2006. As a result, the total value of property under construction in 2005 was RMB 5.1 tn ($637.42 bn), contributing to 28% of China's GDP. Consequently, China's home improvement market also projected great potential for growth. Many foreign home improvement retailers like B&Q, IKEA have established their strong presence along with the domestic home improvement players.

"The home improvement market on the mainland is the most promising in the world: $50 bn in sales in 2005 and growing at 12% a year. Homeownership has skyrocketed, from near zero two decades ago, when there was virtually no private property, to 70% of all housing today", BusinessWeek reported. However, China's home improvement market is not that easy to navigate although the potential is highly tempting.

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