Looking back at the past 2021, interior design and its upstream and downstream industries have experienced an extremely bumpy year. The impact of the pandemic is much longer and longer than we once estimated.
Compared with the previous bustle, the upstream real estate industry has been somewhat deserted during the Spring Festival of the Year of the Tiger. Thunderstorms, salary cuts, optimization, price cuts, transfer of equity, selling oneself to save oneself... The "frozen" signal of the real estate industry has been revealed from many sides, which has greatly damaged the confidence of the design industry.
The internal self-built departments of individual real estate companies are responsible for design and construction, and the cake is divided by virtue of strong customer resource advantages, which has an impact on the interior design industry.
The signs of "cooling" in the design industry are becoming more and more apparent. In the midst of small talk, each of the past three years seems to be "the worst year of the past decade and the best of the next decade." In order to truly understand the state of the design industry in 2022, Dai Bei Talk invited 195 design company leaders to participate in the questionnaire and conducted a survey called "Confidence Index" on 16 groups of questions. We hope to use real feedback to review the past together in order to welcome the new spring.
- Only 1 of the 195 design company owners interviewed was a post-50s;
- The rest of the respondents were the most post-80s, accounting for 47.18%;
- The owners of design companies after 60 and 70 accounted for 7.69% and 31.80% respectively.
It is worth mentioning that the bosses of the new generation of design companies after the 90s account for 12.82%, the younger generation has stepped onto the industry stage, and the influence on design trends is gradually increasing.
Among the design companies to which the respondents belonged, as many as 84.10% had less than 50 people. Small size and workshop system are still the mainstream forms of design companies, which helps design companies to manage their creativity and can flexibly respond to the market and avoid potential risks.
More senior design companies also showed a form of large-scale development, with 7.69% of the surveyed companies in the range of 50-100 people, another 6 companies with 100-500 people, and 7 companies with more than 500 people.
Among the enterprises surveyed, the "old" design companies that have been founded for more than 10 years account for the largest proportion, reaching 39.49%, which is solid and stable for the development status of most design companies.
The founding years of 3-5 years and 5-10 years are the two thresholds for the development of design companies, accounting for 23.59% and 20.51% respectively. We also surveyed some startup design company owners who are less than 3 years old, and the number of respondents accounted for 16.41% of the total sample.
Most of the companies surveyed have diversified business development. Among them, 70.26% of the surveyed companies have private residential business, which is the highest proportion in all fields, and the importance of the private residential sector to the interior design industry can be seen.
Design companies that open individual business sectors such as office, hotel, real estate, and retail are only about half of the design companies that open private houses. Large-scale commercial spaces and cultural spaces are in the hands of a small number of interior design companies, accounting for less than 30%.
Design companies of different sizes, stages of development, and business composition have performed significantly differently in their revenue profiles. Nearly 1/3 of small design companies have annual revenues of less than 3 million, and the annual revenue of listed companies leading enterprises exceeds 300 million. Nearly 15 design companies have an annual total revenue of more than 100 million. The median annual revenue falls in the range of 5-10 million.
Reviewing 2021, nearly 60% of the enterprises have a bad debt rate of less than 10%, the bad debt rate of the design company in the past year is low, and most projects can be paid back normally. The bad debt rate of design companies with real estate-based business is higher than the industry average, and it is urgent to adjust the business structure or enhance the collection of payments to improve the ability to resist risks.
Compared with the market environment of 2020 and 2021, the proportion of neutrality, optimism and pessimism among respondents is close to 1:2:2. Surprisingly, the proportion of those who believe that the 2021 market is better than 2020 is the highest, reaching 41.54%.
When predicting market performance in the coming year, more than 1/3 of respondents believe that 2022 will be the same as in 2021, and less than 20% of respondents are pessimistic about the coming year. Overall, the interior design with balanced business distribution and creative leadership is optimistic about the anti-risk ability of the "big environment" (digitalization, force majeure, policy, etc.).
Looking back at 2021, the suppression of market demand, the hesitation of customers to delay the progress, and the project delay caused by the epidemic have become the three main reasons that plague design companies, accounting for more than 40%.
As a part of the whole industry chain, although interior design still has a breathing room compared with real estate, it cannot be left alone. The epidemic has made some cities take the fight against the epidemic as the first priority, which has a certain impact on the landing of the project, and the realities such as the increase in the difficulty of import and export, the obstruction of transnational business, and the stagnation of international exhibitions have also had a certain impact on the development of the interior design industry.
The current situation of the design industry, such as the large number of customer orders and the difficulty of online transactions, makes "how to obtain customers" the primary problem of interior design companies, and more than half of the respondents listed "single customer acquisition channel" as the company's current bottleneck.
The market downturn, the emergence of cutting-edge design companies, so that the already saturated interior design industry ushered in the "inner volume", 41.54% of the respondents deeply felt the pressure of industry competition.
In addition, as a traditional creative industry, marketing promotion pressure, talent pressure, creative pressure, supplier pressure, and information pressure have become several mountains above the head of design companies, which is more obvious in today's digital era of huge information and easy plagiarism.
Most design firms have low mobility and relatively stable teams, with more than half of the respondents saying that there will be no layoffs in 2021 and a turnover rate of less than 5%.
Compared with the rough action of layoffs and optimization, the interior design industry is more inclined to cultivate talents steadily, especially paying attention to the cultivation of their innovation ability and thinking ability. Teamwork ability and communication expression and understanding ability have become important criteria for design companies to evaluate talents.
A crisis turns around. Under the pressure of the market, cultivating internal strength and seeking development in stability is the choice of many design company owners.
"Design, brand, resources, services, operation, channels" in one of the "hexagonal warriors" for the interior design industry is the most idealized state, and affected by the main body of business and the stage of development, "design and development, brand building, resource integration" three major competitiveness is the focus of more than half of the design companies.
Correspondingly, when it comes to the development priorities in 2022, the above capabilities have also become the choice of most design firms. From the perspective of the development path of the design company, realizing the commercial realization of the founder's "star aura" and building a brand model with long-term value and sustainable development will be the only way for new and old firms to transform into companies.
In addition to being the "designer" responsible for creativity, the bosses of design companies also need to lead the business and seek long-term development. Responding to the uncertain environment, changing the marketing model, expanding channels, and optimizing the enterprise management model are the three major tasks on the desk of the design company boss.
In 2021, when the heat of the NFT and meta-universe is rising, creative upgrades, creative upgrades, digital transformation, new products, etc. may also change the overall ecology of the industry.
We measure the "confidence" of the interior design industry by numbers and proportions, and it is gratifying that the questionnaire breaks the "cooling" freezing point of our bystander perception, showing optimism over pessimism and confidence over frustration. Since it is impossible to return to the "normal", it is better to face the current complexity with optimism.
With the continuous development of cultural consumption and aesthetic consumption, we have reason to believe that the interior design industry led by creativity will continue to usher in progress and development with the continuous inflow of capital, innovative technology and novel design.
The rapidly rising "new stars" also have the opportunity to go branded, internationalized, and even challenge the market share of mature brands on the basis of innate information advantages.