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

At the recently concluded China International Building and Decoration Fair (Guangzhou), known as the "world's number one exhibition in the home furnishing and decoration industry", the keywords were whole decoration, whole home, and cross-industry integration. From the home furnishing industry to smart locks, from lighting and plumbing to home appliance companies, whole house customization and whole home customization have become the industry trend.

According to observations by reporters from Southern Metropolis Daily and Bay Finance, traditional custom home furnishing companies choose to focus on whole decoration or whole home based on their own development situations.

In recent years, the home appliance industry has been in overall decline, and many manufacturers have begun to switch tracks. The integration with the home decoration market and the pre-sale of electrical appliances is seen as a "blue ocean market".

However, industry insiders analyze that the combination of home appliances and home furnishing into smart homes is still not hot enough at the user level, and more attention needs to be paid to the scenarios and the intelligent experience of users.

01

Custom Home Furnishing

Whole decoration or whole home depends on whether to take one step or two steps.

As the post-90s and Generation Z gradually become the new main consumer groups, market demand is constantly changing. They have higher requirements and pursuits for home life, which is why whole decoration and whole home have emerged.

An industry representative stated, "First, we experience the stage of whole house customization, then the stage of whole home customization, the stage of whole decoration, and finally achieve true integrated delivery. We are now taking another step towards integrated delivery."

The result of users upgrading to one-stop consumption.

Regarding the highlights and features of this year's Building Expo, Zhang Chuanxi, founder of the China High-end Custom Exhibition & High-end Custom Club, made observations from the perspective of industry iteration and evolution.

In his view, the future of the industry will have many directions, one of which is high-end customization, which is more suitable for some small and medium-sized custom enterprises. Although the market scale is not very large, it allows companies to maintain strong R&D capabilities and product innovation capabilities.

The second direction is aimed at the public, such as whole decoration and whole home, and many companies are doing this; another direction is channel sinking, targeting lower-tier consumers, but good quality is also required.

Dan Xianxi, General Manager of Topsolid Marketing, believes that whole home and whole decoration actually reflect the increasing maturity of design software in custom enterprises, driving the development of the entire industry chain through design. Companies that master design initiative also, to some extent, control certain traffic entrances.

In general, the arrival of the whole decoration and whole home era is not only a major trend in industry development but also the result of consumers upgrading to one-stop consumption, as well as an inevitable outcome of traffic competition, and ultimately a trend for companies to reduce costs and increase efficiency while improving customer satisfaction.

Yang Dong, Executive President of Baidesheng, believes that both whole decoration and whole home are based on user needs, creating a one-stop lifestyle. Whole decoration is the most ideal home decoration lifestyle, the best overall home renovation plan from the perspective of user experience.

Whole home is a phased practical approach. From the perspective of brand owners, whole home is a strategy for Baidesheng, not just a tactic or marketing method; for distributors, Baidesheng hopes they will engage in whole home rather than be trapped in it, planning the future and system of whole home, fully promoting the implementation of whole home product design, delivery, and operation, achieving certainty, profitability, and future development for both the company and distributors.

Partial space services may become a new trend.

Ouyang Xi, Vice President of Shangpin Home, believes that the difference between whole decoration and whole home is whether to take one step or two steps. Whole decoration is a one-stop solution, directly completing both hard and soft decoration, while whole home is an additional step, integrating whole house customization with furniture.

"Both methods of 'whole' are good, but they may not be suitable for all custom enterprises. There may also be a third path, such as the current balcony customization and other partial space services."

This may be a good supplement to whole decoration and whole home. Ouyang Xi mentioned that Shangpin Home also made an attempt this year, launching the integrated kitchen "I Kitchen", not following the comprehensive route of whole decoration and whole home, but specifically transforming the kitchen space and addressing the pain points of kitchens.

At this Guangzhou Building Expo, Sophia officially announced its entry into the custom door and window track. Wang Bing, President of Sophia Home, believes that the integrated solution of "door, wall, and window" has created a new business model shift in the door and window industry from selling "individual products" to selling "lifestyle", which will comprehensively promote the upgrade of China's door and window industry.

The last blue ocean in the home furnishing and building materials circle not only welcomes the entry of leading custom brand Sophia but also sees related companies from real estate, software, and other industries beginning to cross over.

This year's Building Expo also set up a nearly 80,000 square meter door and window theme exhibition area, focusing on the entire industry chain of "large doors and windows" as the exhibition content, highlighting four major industry trends: interactive integration, cross-industry transformation, design leadership, and brand-driven. However, some industry insiders believe that while the integration of custom + door and window business is theoretically very good, the difficulty of amplifying the effects in specific implementation is expected to be considerable.

Manufacturers need to consider their own resources and capabilities.

Wang Biao, President of Kefa, believes that whole home and whole decoration indeed represent the direction of industry development, with whole decoration being the highest level and whole home being the intermediate stage from customization to whole decoration.

Regarding whole home, Wang Biao believes that although consumers have a more holistic awareness of customization, manufacturers need to consider their own system's resources and capabilities. The development of service capabilities is relatively slow, so continuously improving service capabilities is the easiest way to generate word-of-mouth.

In addition, the implementation of the company's strategy relies on distributors. If a company attempts to do so without reaching the appropriate scale, it may lead to situations where it cannot be implemented. Therefore, considering these aspects, Kefa is currently not in a hurry to follow up on whole home. Ku Teng, Marketing General Manager of Holike, believes that from the perspective of industry resources, the emergence of one-stop design tools that connect design orders to production and delivery has brought a lot of convenience to the industry.

He stated that Holike's development of multiple categories is based on being fully prepared in all aspects before solidly implementing it, allowing distributors to manage various categories well while providing consumers with a better experience.

Lei Zhiguan, General Manager of Lin's Home New Retail Division, stated at the Building Expo that under the trend of whole home, companies from different tracks are integrating home furnishing resources through cross-industry alliances, each launching their own whole home packages. However, the industry's pain point has not been effectively resolved, which is that the styles of custom furniture and matching finished products cannot be highly compatible.

Lin's Wood's whole house customization takes "overall style unity" as the industry entry point. Visionary companies hope to provide consumers with all products for the whole house in a one-stop manner, such as design, home furnishing, plumbing, lighting, and home appliances, all delivered in an integrated manner.

"This type of business model has already been realized in European and American countries or in Japan and South Korea, and China will also develop in this direction."

02

Home Appliances

The home appliance industry is declining, shifting tracks and integrating with the home decoration market.

In recent years, the home appliance industry has been in overall decline, and many manufacturers have begun to switch tracks. The integration with the home decoration market and the pre-sale of electrical appliances is seen as a "blue ocean market".

"We hope to remove the label of the home appliance manufacturing industry; in fact, we have been actively exploring this for the past two years. During this exploration process, we increasingly feel that the concept of 'home' cannot be completed solely by one brand."

On July 8, Xu Meng, Vice President of Haier Smart Home and General Manager of China Region, stated during an interview with reporters and other media. On that day, Haier's scenario brand, Three Wings Bird, announced the establishment of the China Home Furnishing TOP Ecological Alliance (hereinafter referred to as the "Alliance"), which includes members such as Red Star Macalline, Sophia, and Mu Si, in addition to Three Wings Bird. Regarding the upcoming implementation measures, Xu Meng stated that the home furnishing ecological alliance will also establish a joint research and innovation center to achieve collaborative product development and scenario development.

The trend of pre-consumption in home appliances is becoming increasingly evident.

According to data from AVC, the Chinese renovation market reaches 3.8 trillion yuan annually, including renovation, building materials, furniture, soft decoration, and home appliances.

In addition, reporters noticed that in recent years, many home appliance companies have collaborated with home furnishing and building material companies such as Juran Home and Red Star Macalline during the design and renovation phases, aiming to incorporate the sales of appliances (including central air conditioning, water systems, fresh air systems, underfloor heating systems, etc.).

For example, Boss Appliances established a strategic partnership with Red Star Macalline and Juran Home in 2018, and announced in December 2021 that it would fully enter Red Star Macalline's smart appliance living hall, planning to complete the entry of 300 smart appliance living halls within three years; Midea also entered the whole decoration field in 2019 under the name of Midea Real Estate.

On July 9, at the Guangzhou Home Expo, GE Appliances told reporters that Chinese consumers are becoming more particular about home decoration, with high demands for the quality of home appliances and an emphasis on the integration of home appliances with home styles.

In response to these demands, GE Appliances provides personalized customized home appliance and home decoration solutions for users with renovation needs, and has launched high-end scenario solutions such as molecular fresh-keeping, molecular cooking, and molecular-level washing and care. The two high-end appliance series, Mo Yu and Hao Yin, equipped with molecular-level technology, have been launched nationwide.

Haier launched the Three Wings Bird scenario brand in 2020, claiming to provide users with an integrated solution that includes home appliances, home decoration, heating, and whole-house intelligence.

According to a research report from Guojin Securities, the trends of pre-consumption, scenario-based consumption, and complete sets in home appliances are becoming increasingly apparent, and the integration of smart home appliances and smart home decoration is an inevitable trend.

Collaborative research and development based on scenario experience.

"In the past, the fields of home decoration, home appliances, home furnishing, and building materials were relatively independent and segmented, so the industry has always been in a situation of each doing their own thing," Xu Meng said during an interview with reporters and other media.

Xu Meng revealed that in addition to Three Wings Bird, the alliance also includes building material channels like Red Star Macalline, mattress TOP brand Mu Si, and cabinet TOP brand Boloni, etc. "All are top brands from the home furnishing industry. Previously, users had to run around to different manufacturers, and the quality of the different brand products they bought varied greatly, with significant differences in the services and rights provided by each company. These issues will be resolved."

"The China Home Furnishing TOP Ecological Alliance is not a simple brand alliance or product alliance, but a scenario alliance, providing consumers with a one-stop experience." According to Xu Meng, the alliance not only integrates first-line brand resources but also provides consumers with a one-stop shopping solution.

In addition, it can also provide TOP-level services in the after-sales service, allowing users to become a 'hands-off shopkeeper' once they express their needs, with the remaining processes including product selection, construction, acceptance, and other full-process links handled by Three Wings Bird.

Xu Meng stated that currently, the scale of ecological cooperation is still expanding, and in the future, with the establishment of the alliance, Three Wings Bird will also work with major brands to create a home furnishing ecological community that integrates channels, brands, scenarios, and services.

Regarding the next steps for the alliance, Xu Meng stated that a joint research and innovation center will be established simultaneously. This will achieve collaborative research and development from product development to scenario development, differing from the independent research and development of products such as air conditioners, refrigerators, and cabinets. The alliance will conduct collaborative research based on "scenario experience," including solutions for smart bedrooms, smart kitchens, and more.

03

Smart Home

Promoting whole-house intelligence, consumer smart experience is more important.
 

Voice calling to automatically turn on lights and open curtains, walking in front of the wardrobe and the door automatically opening... In many videos about smart homes, you can always see home products anticipating your needs, even faster than you.
 

In recent years, the smart home market has developed rapidly. At the Smart Home Industry Leaders Summit, industry insiders stated that China is the largest smart home market in the world, with the market size of smart home devices doubling from 260.9 billion yuan to about 514.5 billion yuan from 2016 to 2020. There were also industry insiders who pointed out that for end consumers, the smart experience is more important.

Single product intelligence and partial intelligence are pseudo-intelligence.

At the summit, Deng Qiuwai, Vice President of Haier Smart Home and President of Haier Whole House Intelligence, stated that the smart home market is currently a blue ocean market, supported by technologies such as artificial intelligence, the Internet of Things, and 5G technology. In terms of policy, the "14th Five-Year Plan" outlines the goal of "creating a new type of digital life that is smart, shared, and harmoniously governed," and the opportunities for the dual-carbon economy all contribute to the development of the smart home industry.

Some industry insiders also stated that while the smart home industry appears to be very hot, the user level is actually not enthusiastic. Wang Micheng, President of Hongyan Electric, believes that the smart home industry faces one of its dilemmas: it only has digital application technology without providing consumers with scenarios for digital realization.

Deng Qiuwai believes that the current problems in the development of smart homes are single product intelligence, partial intelligence, rigid scenarios, complex operations, and insufficient intelligence. "Users have long suffered from the era of pseudo-intelligence in single products."

Is the key point of smart homes the interactive screen?

Industry insiders at the summit almost all regard smart voice operation screens as a key part of smart homes. Wang Micheng stated, "Currently, the most serious issue of internal competition in the smart home industry is the interactive screen."

Wang Xionghui, the founder and CEO of Orvibo, believes that voice interaction systems are particularly important for users' smart experience. Shao Yang, Chief Strategy Officer of Huawei Consumer Business and President of the Whole Home Smart Product Line, shares the same opinion. Shi Weigang, President of Morgan Smart, believes that the technological aesthetics of products are also particularly important for the increasingly younger consumers today.

"The requirements of the whole home smart era pose a significant challenge to products. I do not believe that connecting all products to the cloud platform constitutes whole home intelligence, and single product intelligence does not represent whole home intelligence either. It must be safe, stable, intelligent, efficient, open, convenient, energy-saving, and compatible to be considered the basic elements of whole home intelligence," said Wang Xionghui.

The Matter protocol is expected to achieve interoperability.

"The future smart home industry is still highly optimistic," Wang Micheng believes. From the perspective of market potential, consumption upgrading is the main theme of the future market.

From the consumer's perspective, the demand ranges from essential functions to quality experiences, showing diversity. Smart homes are also the basic units of smart communities and smart cities. Future smart living services will be built through IoT, connecting from individual living to communities, serving the public, and enhancing the level of community service and social benefits.

Wang Xionghui also stated that in the past, each smart home manufacturer was not open and had its own system connections. Users want more choices and more compatibility, not a fragmented glass bridge.

Currently, Apple's announcement to fully support the launch of the Matter protocol is a very good opportunity to unify all global smart home Bluetooth protocols, which will help solve the problem of interoperability in the smart home industry.

Source: Furniture Industry