As an important part of the national economy, the total market of the entire home furnishing industry has exceeded 2 trillion, of which, the late-start custom home furnishing industry has grown at an annualized rate of up to 17% in recent years, and has become a major home furnishing industry. "Dark Horse".
It is predicted that in 2019, the market size of China's custom furniture industry will exceed 280 billion yuan, and by 2020, the market size of the custom furniture industry is expected to exceed 340 billion yuan.
However, entering 2019, the custom home furnishing industry has heard a lot of "winter" remarks: the cost is getting higher, the profit is getting less and less, and the business is becoming more and more difficult to do. The lack of an open supply chain service platform is the fundamental reason for the difficulty of doing business.
Where is the pain in the custom home industry that "business is not easy to do"?
When focusing on an industry, it is critical to focus on its upstream, midstream and downstream. Generally speaking, upstream represents the source, materials, raw materials, and supply chain; midstream means manufacturing, production, factories, and construction; downstream means stores, channels, and marketing. The pain in the home furnishing industry is precisely concentrated in the three sectors of the upper, middle and lower reaches.
1. Upstream: Supply chain opacity and unity
In the entire home furnishing industry, there are relatively few upstream raw material categories in the customized home furnishing industry. More than 90% of the upstream categories are composed of plates, wood, hardware, and profiles. However, due to the relatively large number of custom furniture production and circulation links, it also caused the current situation of increasing prices and opaque information.
Taking the wardrobe as an example, the product has to go through the multiple links of "plate manufacturer-pressing plant-furniture factory-1 to N-level distribution agent" before reaching the consumer's home. Looking at mainstream brands on the market, there is often a lack of complete information about product raw materials.
Being opaque means that the words "real goods" are difficult to realize. The upstream supply side will not make changes, and consumers on the weak demand side will naturally find it difficult to buy their favorite products in the chaotic market.
2 ､ Midstream: Inefficiency of production and processing and ceiling
It is reported that in the European and American countries where the customized home furnishing industry is far more developed than China, even the German century-old cabinet factory with extremely modern production equipment and management system has only 92% utilization of raw materials. For this result, Zhou Yuxiang felt very anxious.
"When everyone is still excited about the improvement of one or two points, the ceiling is already clearly visible," he said. "We can't just do things that are unique to us. The development of the manufacturing process must rely on industrial collaboration. "
The lack of efficiency at the production end and the inconsistency of process standards have become a key factor hindering industrial collaboration.
Zhou Yuxiang explained the reasons behind: "There is no unified process standard, there is no widely followed production specifications, there is no mutually compatible production instruction interface, orders can only be internally circulated, even if the two factories across the wall, it is difficult to achieve order communication, Capacity sharing. Everyone is also used to closing the door to engage in production. If the production capacity is insufficient during the peak season, expansion and production lines will be added, resulting in excess capacity in the off-season, leaving the machine and workers idle, causing a lot of waste. "
3 ﹤ Downstream: Channel acquisition (CPA) and the high cost of low conversion
With the implementation of the hardcover delivery regulations for new homes, the traditional "joining agent-marketing-acquiring-store deal" model in the custom home furnishing industry has been hindered. The traditional building materials home furnishing market has become more and more deserted, the channels are more diversified, and the cost of acquiring customers in stores is high.
The reason behind the scenes is that more and more young people are beginning to pursue a sense of design, integrity and even fashion trends, and are used to the diversification of consumer scenarios. Zhou Yuxiang said that the integration of channels has made whole house decoration and bag occupancy an irreversible trend. Home supply chain companies have emerged in recent years. On the surface, they are meeting the sales needs of merchants for multiple categories of home products, but in essence they are Response to the current status of the downstream.
The upper, middle, and lower reaches are not isolated and fragmented, but pull each other. However, the current status of the industry is that most enterprises increase investment in the downstream to attract customers with more advertising and marketing methods, but they ignore the construction of the upstream supply chain and the importance of the "landing service" link. If there is no overall and coherent methodology, just a single point of effort, the development of enterprises will become more difficult.
At present, the custom home industry still has problems such as low brand concentration, high personalization, high dependence on offline experience links, and high localization requirements for installation services. This also determines that small and medium-sized businesses will continue to exist in the future.
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