The home decoration business is becoming a new trend, and companies in home decoration, building materials, and textiles will move towards integration.

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The whole-house renovation business has become a key area for customized home furnishing companies in the past two years.

As one of the early entrants in the whole-house renovation business, Oppein Home achieved over 2 billion yuan in whole-house renovation revenue last year, becoming a leading company in the industry.

However, in the first half of this year, the industry's enthusiasm has declined, and the expansion of the whole-house renovation business has fallen into an "awkward" situation. According to reports from Jiemian News, only four companies disclosed their whole-house renovation revenue in their 2022 semi-annual reports. Among them, Sophia's revenue doubled to 361 million yuan; Shangpin Home's revenue halved to 203 million yuan.

In contrast, Oppein has been very active in the whole-house renovation business this year. On June 6, Oppein renamed its whole-house renovation brand "Star Home" to "Bonis."

At the performance briefing in August, Oppein Home's chairman and president, Yao Liangsong, stated that about 70 whole-house renovation stores have been opened, and it is expected to grow to 100 by the end of this year.

However, due to changes in market conditions, Oppein has also adjusted its revenue expectations for the whole-house renovation business this year. Zhang Xiaofeng, general manager of Oppein's whole-house renovation division, recently revealed that the initial revenue target of 4 billion yuan may not be achievable, with an overall estimate of around 3.4 billion yuan.

What is whole-house renovation? Xu Rui, vice president of the Residential Industry Branch of the China Architectural Decoration Association, mentioned the definition of whole-house renovation: "From the perspective of materials and furnishings, there are no auxiliary materials or main materials in a simple package, which includes sand particles, glue, pipelines, etc., called semi-package; including tiles, wooden floors, and other main materials is called full package; including custom furniture, soft furnishings, etc., is called a complete plan; including home furnishings, home textiles, home appliances, etc., is called whole-house renovation."

Xu Rui stated that most companies that claim to be whole-house renovation companies are still at the semi-package or full-package level in their business expansion. He cited two companies that include all home items in their whole-house renovation business, saying, "Including home textiles, towels, toothbrushes, slippers, etc., is what we call true whole-house renovation."

Wang Yuwei, deputy general manager of Shengdu Home Decoration, provided a different explanation from the perspective of the enterprise, stating, "Whole-house renovation is when decoration companies meet consumers' best overall needs, then productize the elements of design, construction, auxiliary materials, main materials, custom furniture, soft furnishings, and decoration, pricing by square meter or as a complete set, and then take contractual responsibility for overall pre-sale, in-sale, and after-sale services."

Zhang Xiaofeng interpreted the key points of Oppein's new whole-house renovation strategy, saying, "I call it a retail service model that meets the lifestyle of all family members through integrated design, one-stop product integration, and comprehensive construction services."

Wang Yuwei, who also mentioned the retail concept, explained that whole-house renovation is a model of A plus B plus C, where A is standardization, B is personalization, and C is new retail.

These industry professionals all mentioned repeated keywords when discussing the competitiveness of whole-house renovation companies: supply chain, customer acquisition capability, and digitalization.

"The competition in whole-house renovation is a competition of supply chains," Xu Rui stated, highlighting four main points of supply chain competition. First, the circulation link in the FtoC model (a new business model where products are delivered directly from manufacturers to consumers through online purchases); second, the company's control over products and pricing power; third, the company's delivery capability and efficiency; fourth, the company's whole-house customization capability; fifth, including home furnishings, home decoration, soft furnishings, home textiles, home appliances, etc.

In discussing customer acquisition channels, Chen Lei, chairman of Shenzhen Sequoia Tree Decoration Group, stated that whenever the company opens a new store in a new location, it invests two to three times the industry scale to solve local customer acquisition issues.

In terms of digitalization, Zhang Xiaofeng from Oppein mentioned the current status of the digital platform for Oppein's whole-house renovation. "After our rendering software is integrated with our custom products, there is no need to draw other renderings and construction drawings; we can directly place orders using the drawings."

Wang Yuwei also mentioned that Shengdu Home Decoration's digital capabilities also bring convenience to business leaders, saying, "This month we signed 2,000 contracts, and we can see who sold custom products, who sold home appliances, who sold furniture, who sold lighting, and who sold curtains just by opening our phones. This is very important."

In addition, Zhang Xiaofeng also stated that the home decoration industry is about to enter a major reshuffle period. Against the backdrop of economic adjustments, consumers will be more cautious in choosing home decoration companies, and only high cost-performance and high restoration can attract consumers.

Zhang Xiaofeng stated that when the whole-house renovation channel can achieve a high degree of supply chain integration, it will be more cost-effective for consumers.

In the future, Xu Rui believes that semi-package and full-package companies will coexist with whole-house renovation companies for a long time, but the former's output value proportion will see a significant decline. "Whole-house renovation is the future development trend of the industry; those who do big business in the future will definitely be those who do whole-house renovation."

Combining the current demand for one-stop services from consumers, companies need new profit growth points, and the home furnishings and home decoration industries may undergo a major integration in the future.

Xu Rui mentioned, "In the future, there will be no home decoration industry in China. Our home decoration, furnishings, and building materials companies will gradually merge together, taking different paths to the same goal; we will all move towards the whole-house renovation track."

However, as the industry leader, how Oppein Home responds to the adjustments in the upstream real estate industry in the second half of the year and whether its whole-house renovation business can drive performance growth remains a focus for the market.

The integration of whole-house decoration, home appliances, and smart home technology—how far are we from fully customized and fully smart homes?

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The integration of whole-house decoration, home appliances, and smart home technology—how far are we from fully customized and fully smart homes?

None