In the home furnishing industry, it is not a new way to pack multiple items to make a "package". The home improvement industry started to use this tactic early on, and now, the package wind is blowing too many home furnishing categories.
A few days ago, Quan you Furniture Co., Ltd. (referred to as "Quan you Furniture") also joined this "package style". It is understood that the launch of the whole package of 39,800 yuan is not low compared with packages launched by other companies.
Before this, Oupai, Gujia, Shangpin Zhaipei, and Huawei have successively launched new packages, with prices ranging from 1,000 yuan to 10,000 yuan. Judging from the content of the packages launched by each company, it is not an exaggeration to summarize with "similarity", most of which are customized + finished furniture + soft decoration.
This "package" wind mainly pervades the field of whole-house customization. Since the second half of last year, the wind has increased significantly this year. According to incomplete statistics of Leju Finance, more than 10 companies have participated in it.
It is not only a price war but perhaps more of a "warming together" after the rise of raw materials.
Since 2021, the home furnishing industry has not only been affected by the downturn of upstream real estate but also faced the current situation of rising raw material prices. The package launched by the company packs multiple single-item items, from whole-house customization to whole-home customization, which will save on logistics, transportation, labor, etc., and can control costs to a certain extent.
The set menu is "similar with little difference"
Almost all well-known custom companies have joined the whole package, including Oppai, Sophia, Gujia, and Shangpin Home Delivery, and even Huawei has participated.
As can be seen from the above table, the contents of the packages launched by each category are similar, most of them are customized + finished furniture + soft decoration or home products, and most of the customized cabinets are about 10+ or 20+ square meters, covering sofas, dining tables, and chairs, background walls, etc., Send kitchen cabinets, wooden doors, smart small household items, etc.
A few years ago, customization companies were pursuing private customization, but there were strong similarities in terms of package content.
From the price point of view, the price of the package is mostly around 30,000 yuan. A seemingly simple whole-house package a new wave of price wars has quietly started.
According to relevant media reports, during the 315 home sales promotion season this year, the promotional prices of some home furnishing companies' packages have risen by 3,000-20,000 yuan respectively, while the price of smart home packages represented by Huawei has dropped by about 60,000 yuan. In addition, Lin's Wood Industry also previously announced that the 29800 packages will be lowered to 26800.
Compared with the previous whole-house customization, the difference of the whole house package is the integration of finished furniture. There are different opinions in the industry about the promotion of the whole package by customized companies. Some people say that it is mutually beneficial, some people say it is taking advantage of the trend, and some people suspect that it is a marketing gimmick. "Finished furniture enterprises and customized enterprises have found a balance, and they can make the cake bigger together, which has more advantages for both parties." Industry insiders analyzed.
Forced by rising raw material prices
Prices have continued to rise this year after rising raw material prices last year.
From the perspective of the large home furnishing industry, the raw materials involved in the building materials industry are mainly steel, aluminum alloy, glass, wood, etc. The price increase this time is relatively large.
The main raw material in the furniture and home industry is wood. Mainly affected by environmental protection policies, timber prices are also rising substantially. At the same time, the processing of furniture and home furnishing will also involve raw material glass products.
The sharp rise in raw materials will increase the operating costs of enterprises. Taking several customized home furnishing companies as an example, the cost of OPPEIN, SOFIA, and SHANGPIN home delivery has increased for three consecutive years.
From the perspective of cost, the package series launched by enterprises may be able to effectively control costs, including labor costs, logistics costs, and transportation costs. The package contains multiple varieties, which can be packaged and shipped when consumers buy, instead of sending out a single piece, and there may be a lot of savings in logistics costs. In addition, when packaged and shipped, the number of transportation is reduced to a certain extent, saving transportation expenses.
At present, the market size of China's home furnishing industry is about 4.5 trillion yuan. According to industry estimates, the logistics cost of home building materials and the furniture industry usually accounts for about 20% of sales. From the point of view of a single enterprise, the transportation fee is a considerable expense for the enterprise. Taking Gujia Home Furnishing as an example, from 2018 to 2020, the transportation costs of Gujia Home Furnishing are 121 million yuan, 179 million yuan, and 391 million yuan respectively.
From this point of view, when the price of raw materials has become a fact, it may be an effective method for companies to save some costs through "packages".
Control feasible costs
Rising operating costs have had an impact on the company's gross profit margin. According to the statistics of Leju Finance and Economics, the gross profit margins of companies including Oppai, Sophia, Gold Kitchen Cabinets, and Gujia Home Furnishing have declined to various degrees in the past three years.
However, in recent years, companies have also reduced costs and increased efficiency. Especially in the case of an uncontrollable rise in raw material prices, we try our best to control labor costs and manufacturing expenses.
It can be seen that most of the labor costs of customized home furnishing enterprises in the past three years have been "stepping in place", and the labor cost of Shangpin Home Delivery has continued to decline.
In addition, the growth of manufacturing costs of most companies is also relatively slow. The manufacturing costs of Shangpin Home Delivery will increase significantly in 2020. The growth rate of manufacturing costs of OPPEI, Sophia, and other companies is not obvious.
In the case of uncontrollable raw material costs, controlling labor and manufacturing costs also effectively ensures the profitability of the enterprise. Although the decline in gross profit margin has affected the growth rate of net profit of enterprises, the net profit of most enterprises still maintains growth.
Taking Oupai and Sofia as examples, from 2018 to 2020, Oupai’s net profit was 1.572 billion yuan, 1.839 billion yuan, and 2.063 billion yuan, up 20.90%, 17.02%, and 12.13% year-on-year; Sofia’s net profit was 959 million yuan, 1.077 billion yuan, and 1.192 billion yuan, up 5.77%, 12.34%, and 10.66% year-on-year.
