Industry concentration is relatively low, the "four strong" leading a stable dominant position. In 2019, the market share of household paper CR4 was 30.0%, which only increased by 2.6pct compared with 2013. We found that the market concentration of household paper industry is relatively low, and the leading trend of differentiation is relatively slow. We believe that this is mainly because the production technology of household paper is relatively simple and the forest resources are scattered. Regional small household paper factories in various regions can also realize small-scale production. Meanwhile, household paper is a commodity with relatively strong homogeneity and relatively high price sensitivity of some consumers. More inclined to relatively low freight, brand premium space is relatively low local brand products.

The "top four" shows a trend of share change. In the household paper industry, Xinxiangyin (under Hengan International), Jierou (under Zhongshun Jierou), Weida (under Vida International) and Qingfeng (under Jinhongye) occupy the top four position in the industry. From 2013 to 2019, the share of Vida and Jierou increased by 1.2pct and 2.0pct to 9.4% and 5.5% respectively.

The consumer groups corresponding to the "Top four" brands still have a certain pursuit for the high quality represented by brand endorsement. We believe that although household paper has certain homogenous attributes, its differentiated cognition of quality is relatively similar, that is, in the cognition of most consumers, paper products with good toughness, thick paper, not easy to drop scraps, and less chemical residue have higher quality, and this view has relatively high recognition.