After nearly 30 years of rapid development, the total output value of China's construction and decoration industry reached 4.22 trillion yuan in 2018, accounting for approximately 5% of the entire national economy, of which the total output value of residential decoration and decoration was 2.04 trillion yuan. Behind this seemingly prosperous development, there are actually growing pains. It is understood that since 2014, the number of decoration companies across the country has begun to decrease significantly, falling from 140,000 in 2014 to 120,000 in 2018. A large part of the reason is due to the impact of the fine decoration policy.
Data source: Compilation of public information
"China's Home Decoration Industry 2018 Development Blue Book" shows that as of the first half of 2018, as many as 19 provinces and cities have introduced fine decoration policies, and many cities such as Beijing, Chengdu, Shanghai, Guangzhou, Wuhan, and Xi'an have clearly required that they be implemented in 2020. It is 100% fully decorated, and Xiamen, as an early city that implemented the fine decoration policy, has no rough houses in the properties delivered since last year. The increase in the proportion of finished housing has caused the home improvement market to shrink, accelerating the industry to enter a reshuffle period.
It seems that all industries have one thing in common: the weaker the market, the more order and regulations need to be established. At present, in most cities, there is a mixture of "decoration companies" consisting of semi-contract companies, package companies, design studios, "guerrillas", foremen, etc., so reshuffling is inevitable. The home decoration industry from the end of 2017 to the beginning of 2019 can be described as "bleak". In particular, chain home decoration companies frequently had their capital chains broken, closed down, and ran away. This has severely affected upstream material suppliers such as ceramic tiles, bathroom ware, and cabinets.
01
Home decoration companies have fallen into a "suicidal" wave of bankruptcy
With the changes in end market consumption patterns, home decoration channels have become a major reliance for ceramic tile dealers to ensure sales. However, when material dealers cooperate with home improvement companies, they not only need to pay admission fees and warranty deposits, but profits are also extremely low. Some accounts take as long as several months or more to clear.Half a year later, it is conceivable that once a home decoration company runs away, the material dealers will suffer heavy losses, and there are many who will be directly dragged down.
According to incomplete statistics, home decoration companies that have run away or gone bankrupt in 2018 include Xingfu Home Decoration School, Dangjia Decoration, Shichuang Decoration, Milan House, Apple Decoration, No. 1 Home Furnishing Network, Suzhou Rising Sun Group, etc., among which Apple The group's home decoration companies such as Mi Tang Decoration, Lemon Tree Decoration, and Niba Commune have collectively closed down on a large scale.
The outbreak of bankruptcies of home improvement companies across the country continued into 2019. In April, Suzhou Tiandi and Decoration Company shut down all operations and disappeared; in July, the "Tiandi and Decoration Wave" spread to Beijing. According to information released on the People's Court Announcement Website, since 2019, more than 30 decoration companies across the country have gone bankrupt and liquidated, covering more than 20 cities across the country.
There are many home decoration companies in the above list that are developing rapidly. They were once brilliant and "dominated", but they all died unexpectedly in just two years. Some people in the industry believe that the main reason why home decoration chain companies frequently drop out of the chain is to attract customers at low prices and blindly expand, which leads to the break of the capital chain. The reason why the author calls the exit of these companies "suicide" is because they all have "three sins".
The first crime: "madness".
Crazy low-price competition is a poison. It is understood that many all-inclusive companies quote 588 yuan/㎡ or even 499 yuan/㎡ (including design, main materials, construction, etc.), which is far lower than the normal market price and is simply shocking. If you give me a 5% discount today, I will give you a 3,000 yuan main material package tomorrow; if you give me a sofa today, I will give you a TV tomorrow; it can be said that if God wants someone to die, he must first make him crazy. A decoration project has complicated procedures and takes a long time. Without profit, it is bound to be impossible to provide sustained and efficient services. This is also the biggest drawback of this business model. Without a reasonable profit margin, there is no room for survival, so you are gradually trying to kill yourself.
The second crime: "sickness".
The so-called core competitiveness of complete decoration is cost-effectiveness. Although it can indeed save money and worry for owners, once the competition turns into chasing low prices, this model will begin to "disease". At present, many all-inclusive companies are still stuck in the stage of playing tricks. They invite customers to negotiate orders, sign contracts, collect deposits, start a long construction cycle, and get through the house inspection for the final payment. However, there is no guarantee of project quality, design and construction. He is not competitive in terms of performance, but he doesn't know that these "diseases" are all hidden in his body.
The third sin: "poverty".
There is a precursor to the collapse of many all-inclusive companies, that is, problems with capital turnover, andthe reason why they cannot breathe is "poverty"! It’s because the marketing cost pressure is too great! If you do the math, you can easily build an exhibition hall of several thousand square meters, hire hundreds of people to make harassing phone calls, and spend a lot of money on advertising. Doesn’t all this marketing cost money? Spending money indiscriminately will lead to financial stress. When funds are tight, integrity will not be maintained. If integrity is not maintained, everyone will be cheated. Part of the deposit will be collected from the owner, the workers' wages will be owed first, and the material dealer's payment will be delayed first. Of course, in the end, consumption is still the last thing. Those who were taken advantage of paid for all this.
02
To move towards standardization and maturity, we must break first and then build up
The "Analysis of Complaints Accepted by National Consumers Association Organizations in the First Half of 2019" released by the China Consumers Association shows that in the first half of 2019, the National Consumers Association organizations accepted a total of 8,473 complaints about housing decoration and property services, accounting for 10% of service-related complaints. 2%, ranking among the top five consumer complaints.
The author understands that disputes between all-inclusive companies and owners are mostly caused by the following situations: First, consumers are not clear that many parts of the construction process require additional payments, and the final payment is inconsistent with the initial quotation; second, the additional services provided by home improvement companies and benefits are just verbal promises, which in the end cannot be fulfilled without any evidence; and these are manifestations of irregularities in the industry. In addition, some all-inclusive companies still haveThere are many hidden dangers. For example, you can get a 50% discount by paying in one lump sum, and the building will be empty in the end; you may say, "Leave the house to me, and you can go to work without worries," but actually cut corners in invisible places and report the renovation progress. Vague. The essence of these chaos is actually human nature's pursuit of profit and has nothing to do with the decoration model.
▲Huang Jinfa, Vice President of Xiamen Building Decoration Association and Chairman of Zongquan Decoration
When visiting the Xiamen market, the author learned that since 2013, Youjia Decoration brought the self-contained model to Xiamen, and now in the past 24 years, the local old-line enterprise-Zongquan Decoration has successfully transformed into the self-contained model and become the local leader in the field of self-contained decoration. During this period, the home decoration market was ups and downs, and there were many all-inclusive companies that suddenly appeared and then disappeared. In fact, whether it is operations management or delivery capabilities, they all require the accumulation and accumulation of enterprises, so the ones who have the last laugh must be enterprises with strong foundations. Huang Jinfa, vice president of Xiamen Building Decoration Association and chairman of Zongquan Decoration, told the author: "The biggest change in Xiamen's home decoration industry in recent years is the standardization and maturity of the decoration model. I believe that in eliminating some sub-healthy After the full-scale company is established, the industry will move toward healthy development, and the living environment of Xiamen home decoration companies will gradually improve in the next few years. ”
The successful case of Zongquan decoration also confirms another fact: foreign monks cannot recite sutras well. To take a step back, most of the foreign all-inclusive companies will just slap their butts and run away once there is a problem with their capital chain; while local companies pay more attention to the accumulation of reputation, and will handle and deal with the aftermath better even if they go bankrupt. It will not have a negative impact on society. It is understood that in order to cater to the market, most home decoration companies in Xiamen currently launch all-inclusive packages. At the same time, there is also a phenomenon of unanimous rejection of external decoration companies.
▲Huang Jianyao, Vice President and Secretary-General of Xiamen Interior Decoration Association
What is the future of the outfit model? The author interviewed Huang Jianyao, vice president and secretary-general of the Xiamen Interior Decoration Association. He believes that the model of the decoration company is actually popular with consumers. It has prices that ordinary people can accept. In addition, fear of trouble is the biggest characteristic of today's younger generation. They will not buy materials for home decoration. I don’t know where to find the construction team. The most common decoration concept we hear isJust move in with your bags, what young people today need is such a one-stop service to save time and cost.
According to incomplete statistics, many decoration companies such as Happy Rubik's Cube, Love Space, Wanlian, Ujia Factory, Liangjia, Chengjia, Xingyi, Jiuyi, Mingjiang, and Nanfang have already launched the full decoration banner or launched all-inclusive services. In addition, some Internet home decoration companies provide packaged services for projects such as "old house renovation" and "whole house renovation". There is no doubt that the whole decoration model has become a direction that many home improvement companies are exploring, and it may be a major trend in the future.
03
Who is the leader among material suppliers and assembly companies?
Someone in the industry once raised a question: As the main front-end material for decoration, will ceramic tiles eventually be swallowed up by decoration, or will they be able to integrate multiple categories and actively enter the field of decoration?
In fact, the first time the author noticed that ceramic tile dealers integrated multiple categories to enter the field of decoration, it was Ren Baohua, the local champion ceramic tile dealer recognized as the most powerful in Xuzhou. Mr. Ren runs a decoration company (named Happy Direction).
So when the author visited the Wuxi market and saw that Xiangjiang Building Materials, the agent of Jinduo Ceramics, has an exhibition hall of more than 2,000 square meters and integrated multiple categories such as ceramic tiles, bathroom ware, and stone, I asked about its operations. Asked whether Wang Meixiang plans to set up a decoration company, she denied the idea and said: Although everyone has the same starting point of providing consumers with benefits and convenience, the decoration of the residence itself is a project that cannot be perfected, and doing business is Make friends, not enemies.
It can be seen that it is not as easy as imagined for ceramic tile dealers to enter the field of decoration. What is the entry threshold? Are there any specific prerequisites? The author cannot draw a conclusion, so let’s answer it by the following successful cases of three ceramic tile dealers.
1. Fang Kun, Chairman of Wuxi Yuansong Building Materials Co., Ltd.:
Fang Kun is a native of Wuxi and has been engaged in the building materials industry for more than 20 years. His company includes Qianghui Decoration, Qianghui Precision Brick, Faensa Bathroom, Whole House Customized Shangmu Yipin, etc. He defines himself as a professional A whole-house customized building materials service provider; currently has 9 self-operated stores in Wuxi's Huaxia Home Furnishing Port, Red Star Macalline Xishan Shopping Mall, Red Star Macalline Wuzhou Shopping Mall, Haodejia International Home Furnishing Shopping Mall, and Easy Home. The operating exhibition hall is nearly 4,000 square meters, and the company has nearly 100 employees. The author learned from him that in the first half of 2019, finely decorated houses began to have a significant impact on the Wuxi building materials circle. Currently, they can still ensure their size by doing a good job in the decoration sector.
2. Lai Lifei, Chairman of Suzhou Zhemao Building Materials Co., Ltd.:
Lai Lifei has been operating the Shunhui brand for 20 years. His company has created a one-stop decoration company "Guiyue Home Delivery" in response to market demand, integrating its Shunhui Ceramics, Milan Ceramics, Good Luck Flooring, Shanggao Bathroom and many other brands. Brand; currently there are showrooms in Suzhou Dongyiyuan, Haodejia, and Park Red Star Macalline, with nearly 40 employees and a warehouse area of more than 2,000 square meters (the storage area in Suzhou is 35-40 yuan/㎡/month ), which means that the annual cost of the warehouse alone is about 900,000. Lai Lifei told the author that it is difficult to achieve a direct ratio between the input and output of the cooperation between ceramic tile dealers and decoration companies. By integrating materials into a decoration company, a complete system can be integrated to maintain long-term operations.
3. Zhou Guofu, founder of Xiamen Jingpai Good Store Alliance:
Zhou Guofu has been in the building materials business since 1993. Currently, his company has many decoration companies including Baoyu Decoration (rigid-demand type), Xiniu Design (high-end design type), Xiaolu Quick Decoration (secondary renovation type), etc.; The Wuyuan Bay Red Star Macalline in Xiamen has an exhibition hall of more than 2,000 square meters, the Baoxiang Red Star Macalline has an exhibition hall of about 3,000 square meters, and there are three warehouses in Xiamen Island, Xiamen Xiang'an District, and Nan'an City Shuitou The total area is nearly 8,000 square meters; its building materials categories include Huida ceramic tiles, Xiaozhou stone, Kanghao ceiling, Qiangu doors and windows, Huayi sanitary ware, Dongshun paint, etc.; the current number of employees is about 100, and it is still growing Expanding. The author learned that they have their own professional construction team, dedicated delivery drivers and helpers, and materials are supplied from their own warehouses. Compared with other decoration companies, they can substantively solve the concerns of owners.
It is not difficult to find that most of these ceramic tile dealers entering the field of decoration have three majorPrerequisites: Have more than twenty years of experience; have materials and construction resources; have strong funds.
Finally, I can sum it up by borrowing a sentence from Huang Jinfa, chairman of Zhongquan Decoration: In fact, no one integrates the other with the whole decoration company and the material supplier. They still rely on professionalism and strength to speak for themselves.
Author: Hong Xiaochun
