In 2021, the performance of the home furnishing industry can be described as "mixed". On the one hand, the real estate policy has been tightened, and the home furnishing industry has gradually shifted from the blue ocean to the red ocean in the past, and most small and medium-sized home furnishing enterprises have been impacted; on the other hand, some leading home furnishing brands have successively launched the "whole home customization" strategy at the end of the year, and other major home furnishing brands. Also followed by frequent actions. The overall development of the industry has entered a "stalemate" period.
Wind data shows that as of February 9, 2022, based on the composition of home furnishing (CITIC), 20 of the 45 home furnishing-related companies have issued performance forecasts, of which 4 are pre-increased, 2 are slightly increased, and 6 are pre-decrease. 7 companies lost the first time, and 1 company turned losses.
Wang Jianguo, the general sponsor of the China Design Dean Base, said in an interview with reporters: "Looking forward to the future, with the active price adjustment, intensive cultivation and sinking channels, and active exploration of online sales by the head of the home furnishing industry and listed companies, small and medium-sized enterprises will survive and develop. The strategic choice will be more difficult, and the number of companies that take the initiative to integrate into groups is expected to increase rapidly, and the speed of cooperation with channels other than distributors such as short video platforms, online private domain traffic, and designer circles will also gradually accelerate.”
The achievements of software companies in "going overseas" are outstanding
It is worth noting that among the 4 pre-increased home furnishing companies, 2 companies (Xilinmen and Gujia Home Furnishing) are leading companies in the domestic software home furnishing industry, and Gujia Home Furnishing is, even more, the "profit king". The company expects to achieve a net profit attributable to the parent of RMB 1.65 billion to RMB 1.730 billion in 2021, a year-on-year increase of 95% to 105%;
Gujia Home Furnishing said that in 2021, the company will actively seize the opportunities of industry development, give full play to the advantages of scale and channel, increase investment in brand and research and development, and achieve steady growth in sales and profits.
Wang Jianguo, the general sponsor of the China Design Dean Base, analyzed: "Compared with other vertical categories of home furnishing, several 'soft home furnishing' have better performance, which is related to the consumption habits of foreign home furnishing products and the traditional advantageous channels of this enterprise. For example, Xilinmen is a manufacturer of IKEA, Menglily’s early channel and brand efforts in Europe and the United States have made great efforts, and Gujia has acquired foreign high-end home furnishing brands. These are their relative advantages in the later stage of the epidemic and the stable period of international market fluctuations.”
Pan Helin, a member of the Information and Communication Economics Expert Committee of the Ministry of Industry and Information Technology, believes that the current industry concentration of software home furnishing has increased, the reputation of leading brands among consumers has been strengthened, consumers have begun to pay more attention to brands, and the competitiveness of long-tail software home furnishing will gradually weaken.
In addition, in 2021, software home furnishing companies have also increased their efforts to develop foreign markets. In September, Xilinmen proposed at the IBC International Business Center's Ten Billion Journey Launch Conference that the total international business revenue will exceed 10 billion yuan in 2025; The funds will be used for the expansion of the production base in Arizona, USA; in December, Gujia Home Furnishing announced that it plans to spend 1.037 billion yuan to invest in the construction of a self-built base project in Mexico to increase overseas production capacity.
Li Yingtao, research director of Analysys Brand & Retail Industry Center, told reporters: "There are two main reasons for the acceleration of software home furnishing brands to go overseas. First, the growth rate of home furnishing consumption in the domestic market has slowed down, while the export growth rate of the international market continues to increase under the epidemic. Second, Gujia and other brands that have gone overseas have had many years of overseas OEM and sales history, coupled with global production capacity layout and supply chain advantages, they can fully rely on strong competitive advantages to further expand their global market share."
Tianfeng Securities researchers also believe that in the past few years, domestic software companies have relied on the acquisition of overseas brands and cooperation with overseas designers to develop products, and their product strength has been significantly improved, superimposed on the consumption trend of "the rise of the national tide" and consumers' acceptance of domestic home furnishing brands. The degree is continuously increasing.
Customized home performance differentiation
Lai Yang, a member of the Expert Committee of the China Chamber of Commerce, said in an interview with reporters: "The overall development and performance of the home furnishing industry are closely related to the scale and frequency of real estate transactions. With the continuous tightening of real estate policies in the past two years, the home furnishing industry has been affected by To a certain extent, the competition among enterprises in the industry has intensified, gradually shifting from the blue ocean in the past to the red ocean, and leading companies with more product power are more likely to gain competitive advantages."
Wind data show that, in addition to OPPEIN and Sophia, 4 of the 6 custom home furnishing companies that have announced their performance have suffered losses, and one of the leading companies is still the first loss.
The announcement shows that OPPEIN expects that its annual operating income in 2021 will increase by 35% to 45% over the same period of the previous year, and the net profit attributable to shareholders of listed companies will increase by 28% to 38% year-on-year. Its net profit increased by 28% to 38% year-on-year.
Li Yingtao believes that in the past few years, custom home furnishing has been one of the few sub-categories that are still growing rapidly in China's home furnishing market. The key to success lies in fast and fashionable design + large-scale channels + stable and fast supply system, which is a typical strong Hengqiang market. At present, Sophia, Oppai, Shangpin Home Delivery, etc. have basically completed the coverage of various market levels in the country, and have obtained a substantial lead in market size. When the market growth rate slows down, some second-tier brands will be very difficult to manage if they do not manage well. It is easy for first-line brands to seize customers through price wars, brand wars, etc., and then suffer losses.
According to the reporter's incomplete statistics, at least three customized home furnishing enterprises with pre-reduced performance have made changes in performance due to the provision for impairment due to some commercial acceptance bills held by them that were overdue and unreceived, and receivables that could not be recovered. A company stated in an announcement that if the impact of the provision for impairment is not considered, the net profit attributable to shareholders of listed companies in 2021 is expected to increase by 25.00% to 35.00% year-on-year.