Wen/Si Tao
01
“In 2018, a wave of bankruptcies broke out in the home decoration industry. In the first half of that year alone, more than 100 home decoration companies closed down across the country.”
“According to information released by the People’s Court Announcement Website, in 2019, more than 46 decoration companies across the country applied for or were ruled to be bankrupt and liquidated, covering more than 20 cities in Guangdong, Shandong, Guangxi, Anhui and other provinces.”
"Since this year, as of June 9, according to incomplete statistics, 19 decoration companies have declared bankruptcy, liquidation or reorganization..."
In recent years, negative news has appeared intensively in the home decoration industry, and bankruptcies and runaways have emerged one after another. In early June this year, the article "Magic 2020, Home Decoration Company Bankruptcy Reemerged" pushed by the WeChat official account of China Ceramics Network sparked heated discussion; in the following two months, another Home decoration companies such as Shenyang Jingfeng Decoration, Hohhot Ye Zhifeng, and Sichuan Meiou Decoration have closed down one after another... Various phenomena indicate that the decline in the home decoration industry is still continuing.
Coincidentally, since this year, home furnishing stores have frequently closed down.
On March 25, Changsha Juranzhijia Home Furnishing Building Materials Marketing Company issued a store closing announcement stating that due to the impact of changes in the market economic environment and serious operating losses, after careful study, it was decided to terminate the operation of the Changsha Jinyuan store of Juranzhijia.
On February 23, Ouyada Home Furnishing Co., Ltd. in Xujiafang, Nanchang suddenly announced that it would close its store on March 31 due to adjustments in its business strategy.
In May, Shenyang Longzhimeng Red Star Macalline officially announced its store closure.
In July, the lease and operation contract of Changsha Red Star Macalline Shaoshan Mall expired. When the owner was about to take back the store, he found that the mall suddenly closed, and the five-month rent payment owed to the owner was not in sight.
On July 10, Red Star Macalline Hengshui Binhu Mall posted a notice saying that due to the mall’s entrusted operationThe management period has expired, and the operation and management services for the mall will be stopped. It will then be closed and the "Red Star Macalline" signboard will be removed.
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02
It is worth noting that recently, stores and decoration companies, two "suffering brothers" in the home furnishing industry, have begun to "join together".
On July 23, Fusenmei Home Furnishing gathered 20 large decoration companies in Chengdu (members of the "Happy Home Decoration Alliance" launched by Fussenmei in March this year) and 300 building materials suppliers to launch the "Fusenmei's First Supply Chain Conference" . At the event site, these 20 home decoration companies and 300 suppliers held a strategic cooperation release ceremony. All parties will work together to expand market channels. This move indicates that Fusenmei will become an intermediate platform for 320 home decoration service companies, promoting in-depth cooperation between home decoration suppliers and service providers.
To put it simply, in order to enhance its customer acquisition capabilities, Fusenmei teamed up with 20 major decoration companies and 300 building materials suppliers to expand the market and increase the activity of the home furnishing market.
The store has the advantage of concentrated brands and a wide range of building materials categories. It can integrate building materials merchant resources, establish a complete supply chain connecting building materials suppliers, home decoration companies and consumers, and control traffic in its hands. The advantage of home decoration companies is design and construction. They can use the brand resources of stores to optimize product supply chains, reduce procurement risks and costs, and at the same time, start with main and auxiliary materials and home soft furnishings to enhance their competitiveness.
From this point of view, the "teaming" of stores and home decoration companies should be a win-win situation with resource integration and complementary advantages; at the same time, the integration of the two is also from the perspective of consumers to meet their needs for one-stop solutions. .
In fact, long before Fussenmei, home furnishing store giants such as Red Star Macalline and Easy Home began to expand into the home decoration market. In 2019, Red Star Macalline launched its own brand "Jiabeide" for home decoration business, and entered the home decoration market in three forms: self-operated home decoration company, franchise model and crowdfunding model. In April this year, the Juran decoration construction management APP was officially launched. Easyhome will deploy decoration business across the country and rely on its store advantages to solve home decoration pain points with its APP.
03
It can be seen from the wave of bankruptcies of home decoration companies in recent years that the home decoration business is not easy to do, but why are the store giants "rushing" to take over? The main reason is that the home decoration business solves the current traffic dilemma of stores.
Once consumers have a decoration plan, they first find a home decoration company to design and plan the whole house, followed by material selection and construction. Home furnishing stores are the last step in decoration. If you want to get more customers, you must get in front of consumers and get involved in the design step in advance.
Introducing home decoration companies, stores can use the customer flow of home decoration companies to improve store sales performance, but stores are not satisfied with this. Recently, at the Red Star Macalline Investor Open Day event, Red Star Macalline Chairman Che Jianxin emphasized to regard home decoration as the first business and become China's largest Home improvement company. The management of Red Star Macalline further pointed out that in the future, the store managers of the 428 home furnishing stores across the country will develop into the chairman of local home improvement companies. The company is willing to release up to 49% of the profits of local home improvement companies. Equity, shareholding, or joint venture to carry out home decoration business in various places, local partners provide local services,What Red Star Macalline really wants to do is to effectively acquire Customer, middle and back-end empowerment and supply chain integration.
This means that the store will transform into a home decoration company, relying on its own advantages to integrate the resources of material suppliers and service providers to build a complete home decoration supply chain system.
04
On the whole, domestic giants such as Macalline, Easyhome, and Fusenmei are all accelerating the development of home decoration business. Many small and medium-sized home decoration companies have also invested in their embrace, and the integrated development of stores and decoration companies It is the general trend.
Under this situation, market flow and resources will be in the hands of stores, and industry concentration will become higher and higher. For ceramic tile dealers operating in a single category, they are faced with two choices:
The first is to join the supply chain system established by the store to obtain more resources; the second is to break away from the integration of the store and operate independently.
Complying with the integration of stores can expand home decoration channel resources and increase customer flow. At the same time, material suppliers of the same category within the system are also facing a war without gunpowder; while independent operations are separated from the inside of the system. However, it is faced with problems such as the market pie has been divided up and home improvement channels are difficult to develop.
In fact, even if there are no store giants entering the home decoration field, the situation in the ceramic industry has been severe in recent years. Ceramic companies have gone bankrupt and closed down from time to time, and ceramic tile dealers have faced the test of life and death at any time.
As a ceramic tile dealer, will you choose to join the trend of store integration in the home decoration industry, or will you break away from the integration of stores and pursue independent operation?
Author: Si Tao
