(Report Producer/Author: Guosen Securities, Ding Shijie, Liu Jiaqi)
1 Industry analysis: the trend of slowing down the growth rate of scale and differentiation is gradually emerging
Industrial chain: The decoration process is lengthy and involves many subjects, and the custom home is located in the middle link
The renovation work was complex and lengthy. The home decoration process is generally divided into pre-preparation, medium-term hard-fitting and late-stage soft-fitting home appliances. The preliminary preparation mainly includes measurement, design, quotation and material selection. Medium-term base installation hard installation construction, involving the main body transformation, hydropower hidden engineering, covering engineering and installation engineering, custom home is as a hard installation at this time into the field, custom home mainly refers to the custom way to create cabinets, wardrobes, wooden doors, bathrooms, etc. In the later stage, soft decoration of home appliances enters the field, soft decoration mainly refers to the decorations and equipment that can be moved, in order to meet the functional and aesthetic needs, attached to the surface or interior of the building. Hydropower projects generally take 5-20 days, mud shingles, carpentry and other works related to the indoor area, taking about 10-25 days, follow-up installation works about 10-15 days. The whole decoration process is complex and time-consuming, and each link is highly undertaken.
Decoration involves the supply of many main bodies. In the lengthy decoration project, there are many participants, and the supply body can be mainly divided into the following categories: one is the home improvement company; the second is the product supplier, that is, building materials, furniture, home appliance companies; the third is the channel provider, offline retail includes dealers, chain home store operators, store franchisees; offline bulk includes real estate developers; online involves Internet e-commerce, live broadcast platforms, etc. Home improvement industry companies are small and scattered, lack of large companies with brand influence; product supply of various subdivisions have well-known brands, such as the custom home furnishing industry mainly discussed in our report, large and medium-sized listed companies include Oupai Home, Sophia, Shangpin Home Furnishing, Zhibang Home, Gold Medal Cabinet, etc., based on the characteristics of custom home non-standardization and product homogenization, the industry pattern is more dispersed; channel level, each company has its own dealer system and KA customers, the market pattern of chain home stores is more concentrated, Red Star Macalline and Actually Home have formed a pattern of two-strong competition, with a combined market share of more than 30.0%.
Development history: Custom home furnishing follows the development of real estate, from single category to multi-category to whole decoration
The development of custom home furnishing for 20 years, closely following the development of the real estate market, with the rise of the real estate economy, policy adjustment, social and economic level improvement, urbanization process continues to advance, has experienced from scratch, from dispersion to concentration of the process.
Exploration start-up period (2000-2011): The industry from scratch, a number of custom home furnishing companies were established. At the end of the 20th century, the housing reform was launched, which stimulated the previously almost blank building materials and home furnishing markets. In 1994, Oupai Home furnishing pioneered custom cabinets; after 2000, custom home furnishing gradually prevailed, Dinggu, Sophia, Shangpin Home Furnishing, Zhibang Home, Piano, I Le Home, Hollyoaks, Weiyi, Federation and other custom enterprises have been established, and the business at the beginning of its establishment is mainly single category. After 2005, the brands began to expand their categories, the product and operation management system was gradually improved, the industry competition became increasingly fierce, and the brand awareness began to form; in 2011, Sophia Wardrobe was listed.
Accelerated growth period (2012-2017): The industry has accelerated its differentiation, and a number of custom home furnishing companies have been listed. At this stage, the custom home furnishing industry follows the overall growth rate of the real estate industry, but the continuous development of functional and personalized home consumption demand has promoted the accelerated differentiation within the furniture manufacturing industry, and the domestic custom home demand has grown rapidly. The custom home furnishing industry achieved significantly higher revenue growth than the overall level of the furniture manufacturing industry during this period. "Whole house customization" has become a hot project in the home furnishing industry, and the entry of real estate developers, home improvement companies, and home appliance companies has made the track of competition in the custom home furnishing industry more crowded. In 2017, 6 custom home furnishing companies were listed, namely Shangpin Home Delivery, Piano, Oupai Home, Gold Medal Cabinet, I Le Home, and Zhibang Home.
Stable development period (2018 to present): Real estate has entered the era of stock housing, and whole house customization and decoration have become a new trend. Since 2018, after four rounds of tightening policy regulation in real estate, as well as the gradual fading of the demographic dividend, the growth rate of new housing sales has declined significantly, the era of existing housing has come, the overall growth of the home furnishing industry has further decelerated, the industry competition has become more and more intense, and single channels and products cannot meet the needs of consumers, so diversified channels and multi-product line layout have also become new features of the industry. On the one hand, with the support of the hardcover housing policy, with the continuous improvement of the fine decoration rate, the business scale of the customized home bulk channel has grown rapidly; on the other hand, the head enterprises have begun to divert customers to the front through the development of the whole house customization and decoration business, and obtain higher customer unit prices while expanding new channels. At this stage, the concentration of the industry is still low, and the development of the whole assembly makes the Matthew effect of the industry appear, and leading enterprises are expected to rely on channels, brands, scale and other advantages to further enhance market share.
Market size: Demand growth has slowed down, and there is still room for price and penetration
According to the survey and forecast of the China Commercial Industry Research Institute, the scale of the mainland custom home furnishing market will reach 381.1 billion yuan in 2020, with a compound growth rate of 17.8% from 2016 to 2020, and the growth rate has slowed down in recent years. The penetration rate of customized home furnishing in the mainland continues to increase, the current industry as a whole is 30%, while the United States and South Korea and other developed countries are about 60-70%, and the mainland is still at a low level, with a large room for improvement. The penetration rate of different categories is different, customized cabinets have the longest development time due to the earlier start, the highest market acceptance, and then the highest penetration rate, up to 61%; the penetration rate of custom wardrobes is 47%, and other cabinets are 10%.
Competitive landscape: The pattern is scattered, and the concentration is expected to increase as the leading advantages are further revealed
The mainland custom home furnishing industry has the characteristics of product homogenization, low entry threshold and unclear brand segmentation, which in turn causes low industry concentration. According to the data of the Prospective Industry Research Institute, the market share of customized home furnishing companies in the mainland is extremely fragmented, with CR3 only 8.8% in 2018 and CR5 10.3%. Compared with overseas countries, there is a large gap, with 35.0% CR5 in European countries in 2015 and 69.0% CR3 in South Korea in 2016. In the subdivision industry, the development of customized cabinets and customized wardrobes is relatively mature, and the industry concentration is higher than that of the industry as a whole. Among them, the custom cabinet is led by Oupai Home, and the market share of Oupai in 2019 is 8.0% and CR5 is 16.0%; the customized wardrobe is more concentrated than the cabinet, and the market share of the leading companies Sophia and Oupai in 2019 is 13.0% and 10.0%, respectively, and CR5 is 35.0%.
Value chain: manufacturing and channels account for the same proportion, strong service attributes
The main reason for the heavy channels in the custom home furnishing industry is that the custom industry has the characteristics of non-standard and sales-oriented production, which in turn leads to a longer purchase process for consumers, drainage, signing, design, installation, and service all need to be implemented by offline channels; the second is that consumer needs are more complex, testing the design, service capabilities and operational efficiency of channels. The traditional retail channels of custom home furnishing include dealer stores and direct-operated stores, of which dealers are the mainstay; traditional bulk channels are cooperation between companies and real estate developers to provide products and services for hardcover houses; emerging channels include whole package and online channels. In recent years, with the rise of the fine decoration rate, the bulk business has grown rapidly, and the proportion of traditional channels has gradually declined.
According to the disclosure of the Oupai prospectus, the settlement coefficient (settlement coefficient = dealer's price / terminal retail price) of Oupai to the dealer is related to the dealer level, which is about 0.5, that is, according to the terminal retail price, the company and the dealer's revenue account for half. According to the value chain calculation and analysis, the sale of a single product, the dealer enjoys a larger profit margin than the company, the net profit margin of customized enterprises such as Oupai is about 10.0% to 14.0% (in the value chain, the terminal retail price is twice the ex-factory price, so it accounts for 7.0%, the dealer net interest rate and the value chain account for the same reason), and the net profit rate of the dealer can reach nearly 20.0%.
2 Development trend: power conversion, channel change, product upgrade
Kinetic energy conversion: The driving force of the industry has shifted from the real estate post-cycle to demand-driven
In the past two decades, the development of the home furnishing market has closely followed the development and changes of the real estate market, and the prosperity of the industry is largely affected by the real estate completion cycle. At present, the demand for new house purchases and new house sales in the mainland have gradually slowed down, and first- and second-tier cities have gradually entered the era of stock housing. In the case of a large base of stock houses in the mainland and the gradual transition of the current consumption force to the post-80s and post-90s, the demand for renovation of old houses will gradually become the main driving force of retail channels; at the same time, the fine decoration rate, especially the improvement of the fine decoration rate in low-tier cities, will drive the growth of bulk business.
According to the data of China Building Decoration Association, in 2020, the output value of the national home improvement industry affected by the epidemic decreased by 10.7% year-on-year, with an output value of about 2 trillion yuan; in 2019, it reached 2.24 trillion yuan, of which 850 billion yuan of hardcover finished houses, +11.8% year-on-year, accounting for 41.7% of the total output value; the output value of existing house decoration was 690 billion yuan, +15.0% year-on-year, accounting for 33.8%; the output value of the rough house market was 500 billion yuan, a year-on-year -10.5%, accounting for 24.5%. The stock housing renovation market is growing the fastest, while the rough housing market is shrinking. In the future, with the rapid expansion of the scale of stock housing, according to the average 7-10 years of redecoration cycle calculation, it can be expected that the future stock housing transformation market will be further expanded, and almost not affected by the real estate market cycle, hardcover finished housing market, rough housing market is an incremental market, affected by the real estate cycle and policy regulation.
Channel change: Channel and business model changes bring opportunities for industry integration
Since 2018, the channel change trend is obvious, the custom enterprises in the bulk, the whole package and online channel layout and force, the current bulk channel growth rate is fast, the proportion is gradually increasing; the whole decoration business is still in its infancy, is in the transition period from "whole house customization" to the real "whole house". Due to the difference in layout time and comprehensive ability, the channel change began to differentiate between companies at the same time, and the advantages of leading companies gradually appeared.
On the one hand, with the rapid increase in the penetration rate of fine decoration, the bulk market is growing fast, due to the large scale, high degree of standardization, short delivery time, high service requirements, so real estate developers tend to cooperate with large companies and large brands, and the bulk channels of some small and medium-sized brands and husband and wife stores are not ideal. On the other hand, the whole package is not only a channel change for the company, but also a change in the business model. The company's comprehensive capabilities have higher requirements, and factors such as the diversity of the company's categories, brand awareness, supply chain integration capabilities, operational efficiency, and degree of informatization have an impact on the whole business. At present, the types, models and scales of companies that do whole decoration or whole house customization on the market are quite different.
Hardcover channels: Policies promote the penetration rate of hardcover houses, and the bulk channels of customized home furnishing develop rapidly
Compared with rough houses, hardcover houses have advantages in terms of cost, environmental protection and safety. Since 2016, the state has launched a number of hardcover housing policies, and various provinces and cities have introduced relevant rules, and the policy has promoted the rapid increase in the penetration rate of fine decoration. According to the statistics of Aowei Cloud Network, the total growth rate of the number of provincial, municipal and national policies in 2016 reached 83.3%, and the year-on-year growth rate in 2020 also exceeded 80.0%. The provincial rules mostly set strict standards for the hardcover penetration rate, and the hardcover penetration rate in the mainland will reach more than 30% from 2019 to 2020, and there is still a big gap according to the targets of each province and the level of overseas countries.
For real estate developers, bulk procurement and overall construction, hardcover houses can enjoy lower purchase prices and longer account periods, so real estate developers have a greater motivation to promote the hardcover model. In 2015, the number of hardcover houses in mainland China was only 820,000 units, and in 2020, it reached 3,255,000 units, and cagr 5 was 31.7%. For custom home furnishing enterprises, bulk channels bring business increments, in recent years, some head custom companies have cooperated with various real estate developers, and the revenue growth rate of bulk channels has been significant. However, the cooperation with real estate manufacturers has requirements for the strength of the company, among the head customization companies, Oupai, Sophia, Zhibang, Gold Medal Cabinet, and Piano have seized the opportunity of bulk channels, and the revenue of bulk channels in 2020 will reach 26.82/15.10/11.75/5.93/712 million yuan, compared with +24.1%/60.7%/83.7%/17.4%/10.7%,While Shangpin Home Delivery and Hollywood Are late in layout, and the remaining small and medium-sized companies are difficult to cooperate with real estate developers. Therefore, we expect that the market share of bulk channels will be more concentrated than that of retail channels in the future. For consumers, hardcover rooms save time and worry.
Packaging channels: the market scale is large, and the competition is becoming increasingly fierce
The history of the development of the whole decoration can be traced back to around 2010, Shangpin home furnishing to do the whole house customization began, and then Oupai home furnishing proposed a large home strategy; and then around 2018, the concept of the whole decoration officially appeared, all kinds of market participants have entered the game; the development has formed a multi-type market main body led, multi-mode coexistence of the whole market, a variety of models are basically a market participant to lead, and cooperate with other brands in the home improvement supply chain to jointly provide consumers with a range of design, base, From hard installation to soft installation and even one-stop service of home appliances, there are differences in the content of the whole package made by different companies. Since the development of 2018, the scale of the assembly market has doubled, and the market size of the whole assembly in 2020 is 679.861 billion yuan, and the industry growth rate from 2021 to 2023 is expected to be more than 20.0%.
According to iResearch consulting survey, the professionalism, peace of mind and cost performance of the whole decoration service have become the most important factors for consumers, and the users who choose the whole decoration value these three factors account for 41.4%/37.0%/35.7% respectively, and consumers will also consider cost-effective, quality, aesthetic and personalized choices.
Supply-side opportunities and challenges coexist. The opportunity of the whole decoration model is that the company will use the whole decoration as a means of drainage to put the customer acquisition time in the initial design link of the decoration process, and at the same time expand the market space through the integration of the supply chain. For custom home furnishing enterprises, the customer acquisition time point from the hard installation front to the design link, while obtaining a greater passenger flow, it has a greater voice for customers to choose the brand in the subsequent decoration process, which is conducive to the tying of their own different categories of products and the formation of empowerment of cooperative brands to achieve a win-win situation. The challenge of the whole decoration model is that, on the one hand, for custom home furnishing companies, the competition pool is expanding at the same time, the competitive environment is more complex, and all types of players in the current home improvement industry chain on the market have a layout for the whole decoration model, and there is also an Internet home improvement platform and an Internet giant layout. On the other hand, the whole package puts forward higher requirements for brand influence, product and service quality, and supply chain integration capabilities, and the gap between small and medium-sized enterprises and head enterprises is gradually emerging.
Driven by the profit of the increase in the unit price of customers, enterprises in the industry have the motivation to cut into the whole package, but for all enterprises, there are several difficulties in doing the whole package:
1) Brand pulling power: reconstruct consumer cognition and trust, whether it is large brand superposition, OEM, ODM, and ultimately enhance consumers' trust and loyalty to the brand, and improve the efficiency of consumer decision-making.
2) Soft power of the whole case design: from selling product portfolios, to selling space solutions, studying the lifestyle of (young) consumers, it is best to form product differentiation, in order to form competitive barriers in today's serious homogenization of the industry.
3) Supply chain integration and delivery capabilities: the whole assembly process is long, the required categories are many, involving hundreds of main and auxiliary materials, while involving manufacturing, procurement, inventory and logistics, etc., the degree of information asymmetry is high, the proportion of labor costs is high, it is not easy to manage, and the quality and duration are difficult to guarantee. If cooperation is only a patchwork between products, it is difficult to achieve design and ensure the smoothness of the shipment and decoration process.
4) Large-scale expansion: the degree of non-standardization of the whole package service is high, the product promotion is difficult, if the investment or self-built way is adopted to expand, the investment is large, the investment cycle is long, and the post-investment management ability is high, and the scale expansion requires higher financial resources, manpower and stronger management capabilities. If the cooperation model is adopted, on the one hand, the quality of the cooperative brand is difficult to guarantee, which may bring the risk of loss and loss; at the same time, the problem of partners with the expansion of scale will be further aggravated, such as whether the scale of partners can keep up, or whether more high-quality partners can be sought. On the other hand, non-exclusive cooperation methods are difficult to guarantee sales share.
5) Balance of interests: the interests of the partners, as well as the conflict of interest between the whole package dealer and the original dealer.
In the face of the above problems, the main examination is the soft and hard power of all aspects of the enterprise. Soft power includes brand power, design ability, supply chain management ability, dealer management ability, etc.; hard power includes capital, manpower, information system construction ability, etc.
1) Brand power: High brand power is conducive to empowering other brand products, increasing the credibility and sales of other brands, so it can achieve higher quality cooperation. For example, the partners selected by Oupai are all high-quality home improvement companies with large scale and good reputation in various places, making full use of the company's high brand awareness, rich product categories, and the integration of category matching process plates, supplemented by the company's mature interest-based sales system, quickly introducing the terminal of the installation enterprise, greatly improving the terminal efficiency, shortening the run-in period, and empowering the brand and product synchronously.
2) Supply chain integration ability: High-quality supply chain integration ability to build cost-effective barriers. In order to form a deep integration and high degree of synergy between each brand in the supply chain, we can open up the whole category, improve the efficiency and scale benefit of the supply chain, and provide consumers with high-quality, cost-effective and time-guaranteed products and services.
3) Information system construction: The information system helps to realize the information technology series from the front-end product design, order formation, order review, order quotation, order deduction, to the back-end order scheduling, organization of production, finished product shipment and other links. Give full play to the penetration and innovation advantages of information technology, continuously improve the level of automation and intelligence in all aspects of sales service and production, greatly empower terminal sales, continuously improve the sense of consumer experience, shorten the production cycle, and increase the scale of production capacity.
4) The construction of other more basic capabilities: for example, convenient design tools can improve the efficiency of program design; cloud database stores massive cases, which is convenient for optimization iteration and owner selection.
The leading advantages of the whole assembly mode are obvious, and the challenges of small and medium-sized enterprises are great. First, the whole decoration is to put forward higher requirements for the company's comprehensive strength, we mentioned above the pain points of the whole decoration business, it is easier to solve for the head enterprises; second, the current decoration market presents strong competition, strong combination, one plus one is greater than two situation; third, because the current decoration model is in the market introduction period, the major companies rely on financial strength and cost-side scale advantages, have launched low-cost whole house customization or packages, large brand products take into account both high quality and low price, The extremely high cost performance has brought greater pressure to small and medium-sized enterprises, and even a dimensionality-reducing blow. Therefore, the internal differentiation and Matthew effect of the subdivision industry will be more obvious, and the whole decoration model will basically become the competition between the head companies.
In summary, the emergence and development of the whole decoration model is a reshuffle of the whole market participants in the home improvement industry chain, the sub-industries extend to each other, the home industry customization, building materials, software, stores are breaking the boundary, in the large home, the whole decoration, the whole family customization into the march; at the same time, the market share of small and medium-sized enterprises in the sub-industry is squeezed, and the industry is accelerating the reshuffle. Therefore, the whole decoration has become a competition between the leading companies in the pan-home improvement industry and the Internet industry. At present, the head players in the decoration market are mainly decoration companies in the upstream of the home improvement supply chain, custom home furnishing companies in the middle stream and Internet platforms, showing three different types of decoration models for different subjects:
First, the industrial chain extension of traditional home improvement enterprises. For example, Gold Mantis, Dongyi Risheng and other enterprises, through the acquisition or participation in the regional home improvement faucet, self-built direct branches and other ways to carry out regional expansion, the original half-package to all-inclusive transformation, from the original hard decoration to soft decoration supporting extension to achieve one-stop assembly.
The second is the supply chain cooperation or self-built assembly of home furnishing enterprises. Supply chain cooperation models, such as Oupai, Sophia, etc. cooperate with regional high-quality home improvement enterprises to empower their own channels and supply chain capabilities to local home improvement enterprises, enhance their own passenger flow, and strengthen the competitiveness of home improvement enterprises; self-built models such as Shangpin home furnishing self-operation, similar to home improvement enterprises extend the industrial chain upwards, which is an extension of home furnishing companies to the front end, self-built design, construction team and main material procurement to achieve full assembly.
The third is Internet platform services. Such as Qeeka.com, Tuba Rabbit and Shangpin Home Furnishing Cloud, build a back-end service platform to improve the delivery capacity of home improvement enterprises by outputting their own information and supply chain capabilities, etc. The difference between Shangpin Home Furnishing Cloud and Qeeka.com and Tuba Rabbit model is that one is facing a small B-end and a C-end.
We believe that custom home furnishing companies are the most advantageous, and their cooperation model is a strong combination, and has been verified in the Korean market. The IK (Rehaus) business of South Korean home furnishing leader Hansen adopts the model of cooperation with home improvement companies. IK cabinet brand was founded in 2008, positioned in the low-end market, in 2016 the IK department was upgraded to Rehaus, through the form of franchise with high-quality small and medium-sized home improvement companies to achieve rapid sinking, with the help of home improvement companies in the local market channel advantages to achieve rapid sinking, while the establishment of a large exhibition room, to provide "application consultation - purchase - installation" one-stop service.
Hansen's cooperation model is to transform non-exclusive franchisees into dealerships specializing in the sale of Hansen products, and each Rehaus consists of 20-30 small decoration companies, that is, a number of local decoration companies become their own distributors. The Rehaus business drove the company's revenue to grow against the trend during the downturn in the Korean real estate market, and the transaction of new and second-hand houses in South Korea turned cold in 2016-2019, but in line with the growth in demand for renovation of old houses, the Rehaus division grew by 14.7% in 2016-2019 and reached 415.4 billion won in 2019, accounting for 24.5% of total revenue.
Online channels: increase the number of live broadcast tracks, online drainage and offline conversion
In addition to bulk and decoration channels, online channels have also become emerging channels that custom furniture companies have focused on in recent years. Driven by multiple factors such as the current main consumer groups being more online, the change of the channel environment, the development of online channels catalyzed by the epidemic, the decline in the drainage effect of offline stores, and the rise of live broadcasting, custom furniture companies have made efforts to make internet marketing such as e-commerce live broadcasting and short video live broadcasting, and adopted online drainage and offline conversion to enhance the overall sales performance.
On the one hand, Oupai Home vigorously promotes the upgrading and reform of e-commerce business, concentrates on building the MCN matrix, creates micro-malls and mini programs, and opens up an online all-scenario retail experience model; on the other hand, it actively opens up an online live broadcast model, establishes a live broadcast base, creates a unique style of "Oupai big IP", and wins public and private domain traffic orders through the live broadcast modes of "star drainage", "in-depth experience marketing" and "online and offline". In 2020, Oupai has successively held more than 100 large-scale online live broadcast activities such as the May Day Carnival, the Anniversary Pet Powder Festival, the Home Culture Festival, and the President's Live Broadcast, and the drainage effect is obvious. In terms of e-commerce innovation marketing, the MCN online expansion model of the Oupai Innovation and Development Department has also achieved rapid development, which has strongly supported the company's various marketing activities, and the number of brand-specific KOL fans on the whole network has rapidly exceeded five million.
Shangpin Home Delivery deeply cultivates the home content marketing ecology, creates a private domain position, creates a new model of O2O marketing such as live e-commerce, and realizes the closed loop of O2O marketing and the high growth of O2O scale performance. On the one hand, the company continues to market throughout the network, and builds a content marketing ecology with Tencent, Ali, JD.com, Baidu, Toutiao, Douyin, Kuaishou and other platforms. On the other hand, the company has created the MCN institution of Xinju Network, independently incubated and signed more than 300 IP home furnishing talents, and opened up the whole link from video and live circle fans, to fan interactive comments, to private domain fan operations, and offline monetization. Xinju.com MCN has more than 180 million fans on the whole network, including about 130 million short video fans and about 21 million WeChat fans. The company incubated its own talent matrix 20+, signed more than 300 external talents, and the talents under the new MCN include "Designer Ah Shuang", who has more than 45 million fans on the whole network, "Design Help" with more than 15 million fans on the whole network, and "Wuli Design Sister" with more than 12 million fans on the whole network. Through the above series of innovative O2O marketing drainage models, the company's online scale increased by 43% year-on-year, but the cost of the measure from online decreased by 36% year-on-year.
Focusing on brand IP such as "Jay Chou" and "Professional Focus", Zhibang Home Furnishing focuses on the head mobile Internet platform (Ali, JD.com, Tencent, ByteDance, Baidu, etc.), builds a private domain traffic pool, carries out accurate digital drainage, offline conversion of the whole process of customer service conversion; focuses on empowering 100 cities across the country, incubating and cultivating franchisees' new retail teams, building a new drainage and conversion system, improving franchisees' overall marketing customer acquisition and service conversion capabilities; seizing the live broadcast outlet, and creating a full-scene live broadcast room and a professional live broadcast team More than 100 large-scale live broadcasts were carried out throughout the year, opening up a new landing transformation model for terminals;
Establish a self-media marketing and communication matrix, focusing on custom design knowledge, product strength, and big coffee sharing, empowering all dealers to manufacture content, enhance brand pull, and reduce customer acquisition costs; the company continues to promote the use of "U customer" platform software, realizes one entrance, two terminals and nine empowered franchisee stores digital operation mode, integrates digital drainage, e-commerce expanders, online communities, national brokers, old customer marketing, fan member fission, live broadcast landing and other models to achieve accurate import of online customers. (Source: Future Think Tank)
Product upgrade: Product end plate upgrade, the main green environmental protection without aldehyde
Under the background of consumption upgrading, the concept of environmentally friendly and healthy consumption has gradually penetrated the hearts of the people. According to Ai Media Consulting data, the primary consideration for consumers to buy furniture in 2020 is environmental protection, and this proportion reached 53.17%. In order to comply with consumers' increasing demand for environmental protection of home products, environmentally friendly home products have gradually become one of the main selling points of furniture companies in recent years. Since the second half of 2020, all listed companies for customized furniture have successively launched aldehyde-free board products, highlighting the concept of healthy aldehyde-free in sales activities, and the market response is good. Aldehyde-free sheet has become the competitive advantage of the current head enterprises on the product side, and while upgrading the product quality, it still maintains an affordable price, which has a dimensionality-reducing blow to small and medium-sized enterprises.
Aldehyde-free sheets provided by companies do not have a formaldehyde emission of 0. According to the new national standard in 2021, the formaldehyde emission of indoor wood-based panels and their products is divided into 3 grades according to the limit value, namely: E1 grade (≤0.124mg/m³); E0 grade (≤0.050mg/m³); ENF grade (≤0.025mg/m³). The aldehyde-free plates of each company are in line with the E0 level, and the net aldehyde antibacterial core plate of Oupai ≤ 0.005mg/m³, reaching the lowest release in the market.
3 Competitiveness analysis: Under the industry change, the competitive advantage of the head company is obvious
According to the previous industry analysis, we can get the following conclusions: 1) In terms of external influencing factors, the driving force of the industry has shifted from the real estate cycle drive to the demand drive, the retail end of the stock housing base is huge, new consumers have entered, and the demand for renovation of old houses is strong. 2) Channel changes bring industry integration opportunities, channel changes mainly include one is with the increase in hardcover housing penetration rate, the rapid development of bulk channels; the second is the whole decoration business opportunities, home improvement supply chain began to integrate, the participants jointly seize the trillion-level pan-home market and home improvement pre-traffic; the third is the development of online channels, short videos, live broadcasts for offline business drainage. 3) The environmental protection plate at the product end is constantly upgraded, and various manufacturers have launched "aldehyde-free plates", and at the same time, they have been rapidly promoted through low-cost methods such as free upgrades. In such an industry background, we are more optimistic about the product quality and variety, the channel expansion of the whole development process is fast, with high brand power and high visibility of the industry leader. We believe that the company's core competitiveness mainly includes product strength, channel power and brand power from the business side; from the financial side, it mainly focuses on its scale, growth and profitability.
Product strength: leading enterprises are rich in products of high quality
The head brand has a perfect layout in all categories. Opal Sophia has a complete range. Oupai products are balanced, do cabinets to start, and then gradually develop bathrooms, wardrobes and other categories, the income structure is mainly based on cabinets and wardrobes, in the cabinet, wardrobe market are enjoying high share and high brand awareness; Sophia originated from the wardrobe business, the current product categories are more complete, the income structure is still based on wardrobes, FY2020 Wardrobe income is about 6 times the cabinet income, with the development of the whole business, Sophia as a cabinet expert is expected to rely on the large-scale, high visibility, wardrobe business, High credibility drives the growth of other businesses together; Shangpin Home Furnishing from the layout of the home business began to focus on customization, the current product structure to furniture-based, taking into account software and other information technology services; Zhibang Home Furnishing's main products include cabinets, wardrobes and wooden doors, FY2020 Cabinet revenue is about 2 times that of the wardrobe; Hollyoaks and Gold Medal Cabinets are respectively made of wardrobes, cabinets started, the current income structure is relatively single, wardrobes, cabinets respectively occupy more than 80.0% of The revenue of Hollyoaks and Gold Medal.
Multi-brand positioning is different to cover the high-end, high-end and low-end markets. Opal, Sophia and Zhibang have all launched sub-brands with different price bands for different levels of consumers. Opal has core brands such as Opal, Opani, Opal, Andy, and Platinum. Oupai and Oubaini are positioned as high-end, Oubaini mainly engaged in wooden doors, and Oupai mainly engaged in other customized products outside wooden doors. Opal is positioned as a light luxury brand for young people, and the price is slightly lower. Platinum is positioned as a high-end luxury product.
(1) Oupai: Oupai brand has cabinets, wardrobes (whole house customization), bathrooms, soft assembly decorations, electrical appliances and other products, product positioning in the high-end.
(2) Opani: the company's wooden door system, metal doors and windows products for the Oboni brand,
(3) Ou Bo Li: Ou Bo Li is a light luxury fashion brand under the company, and its products cover cabinets, whole house customization and other products. Opal's target market is consumers with young and improving needs, which is another expression of the personality of European partygoers. Opolier's target customers are the Me generation who advocate individuality, freedom and imagination.
(4) Platinum: The Platinum brand was established in Italy in 2018, and its products cover many categories such as cabinet clothes and wooden bathroom, positioning Italy's high-luxury custom home, mainly for the high-net-worth elites of cities who pursue quality and experience. In the future, the Platinum brand will further gather the superior resources inside and outside the group.
Zhibang also began to incubate the younger IK brand in 2018 to expand its brand coverage, and currently has three major brands, namely the "ZBOM Zhibang" brand that provides customized products such as kitchen cabinets, whole house customization, wooden doors/wall panels to high-end home consumers, the "IK" brand that provides whole house custom products to the Internet-thinking just-needed home consumers, and the "FLY Flemfei" supporting home finished products. The head brand has stronger R & D and design capabilities. The head brand has more series of products due to its larger investment in backstage product design and research and development, more series of products, more choices of the same series of colors, more styles, and faster speed of innovation. As a result, it is easier to meet the diverse needs of consumers of all ages and types.
The details reflect the humanization of the design. From the perspective of product function, the design of large brand products is also more humanized, so that consumers have a more convenient and comfortable use experience, such as Sophia and Opal in the functional design of the cabinet, they all pay attention to storage capacity and space utilization, and grasp the pain points of consumers. Oupai put forward the "five major systems, three major spaces" integrated kitchen solutions, of which the Rubik's Cube storage system can "expand" the kitchen space by 5 square meters, and its super powerful kitchen storage accessories modular combination, the daily kitchen supplies are divided into categories, the space is rationally utilized, and the kitchen is clean and beautiful. Sophia wardrobe also maximizes the use of space, dividing the wardrobe into different areas and freely adjusting the position through the movable laminate.
The humanization of the design of the Oupai cabinet is embodied in the following points: 1) Reasonably set the height of the countertop. If the height of the countertop is not appropriate, often raise your hands and bend over to increase the fatigue of the cooking. Therefore, Opal designs the table according to the height of the human body / 2 + 5cm. At the same time, consider the design of the high and low countertops, so that the sink position is slightly higher than the stove position, the difference between the two is about 10cm, so that there is no need to bend down when washing vegetables and brushing dishes, and there is no need to raise your arms when stir-frying. 2) Scientific division of functional areas: whether the functional areas in the kitchen are scientifically laid out affects the convenience of cooking. A good kitchen should plan the kitchen line according to "washing → cutting → frying". The flow of the line makes the whole cooking process time-saving and labor-saving. 3) Wall space to store commonly used items: there are many items in the kitchen, and it is partitioned according to the frequency of use of items, which can be used more satisfactorily when cooking. Kitchen utensils, condiments, etc. that are used frequently can be stored using the wall, set up hanging rods or wall hanging systems to facilitate cooking.
Channel force: Leading companies have a broad layout of diversified channels
Channel structure: dealers-oriented, bulk growth rate is fast.
Oupai, Sophia, Hollyoaks, gold medal on the bulk channel layout earlier and the development process is faster, in recent years due to the rapid growth of bulk revenue, the proportion of dealer channels has declined, FY2016-2020, The proportion of Oupai dealer channels from 84.7% to 77.1%; Sophia's dealer channel share fell from 92.7% to 78.5%. Direct sales channels account for a relatively small proportion and are relatively stable. The proportion of bulk channels increased rapidly, and the proportion of Large Blocks in Oupai and Sophia increased from single digits to about 18.0%; because the distributor channels of Zhibang and Gold Medal Cabinets were not as strong as those of Oupai and Sophia, their bulk proportions were relatively higher, from 16.1% and 11.9% in FY2018 to 30.6% and 33.8% in FY2020, respectively. Shangpin Home Delivery lost the opportunity of bulk channel layout, and Hollyoaks began to expand bulk channels in 2020, with FY2020 bulk accounting for 5.8%.
Number of channels: the number of stores and distributors of the head company is large.
The number of offline stores and distributors of each company continues to expand, and in 2020, the number of distributors and stores of Oupai Home, Sophia, Shangpin Home Furnishing, and Zhibang Home Furnishing (Shangpin Home Furnishing Model is directly operated stores + franchised stores) is 7112/4409/2326/3203 respectively, and the number of Oupai and Sophia stores is leading the industry; the number of Oupai Home, Sophia, and Zhibang Home Furnishing dealers is 5124/3629/2525, respectively.
Channel efficiency: The head company stores have high store efficiency.
Oupai, Sophia not only has a large number of dealers and stores, the expansion speed is fast, and the channel operation efficiency is high, among which Shangpin Home Delivery benefits from the online traffic brought by the O2O model, and the store has the highest amount of goods, nearly 3 million per year according to the factory; the average number of stores in Opal and Sophia is about 1.5 million yuan; Zhibang, Hollyoaks, and gold medal cabinet stores are basically within 1 million. There is also a certain gap in the strength of dealers, leading enterprises after years of accumulation, has formed a stable cooperative relationship with regional large dealers, a single dealer is relatively large, in the multi-channel marketing can also have higher development potential and resource investment capabilities.
Channel layout: The head company has a wide store layout.
In recent years, the head enterprises have accelerated the sinking market layout. According to the company's financial report data disclosure, in 2020, there were 4089 stores in the C-level market (GDP less than 38 billion yuan), accounting for 57.5%, an increase of 294 over 3795 in 2018. Sophia's cabinet customized products accounted for 64.0% of stores in fourth- and fifth-tier cities in 2020, accounting for 43.0% of revenue; in 2018, it was 53.0% and 33.0%, respectively.
Judging from the current regional layout. Oupai home furnishing layout is the most extensive, from high-tier cities to sinking areas in the industry have the most stores, covering many cities, dense outlets, the current third- and fifth-tier cities account for 68% of the total number of stores. The distribution structure of Zhibang Home Furnishing City is similar to that of Oupai, and it is currently dominated by cities below the third tier, accounting for 67% of the total number of stores, and there is still a large room for expansion from the perspective of quantity. Sophia and Shangpin Home Furnishing have more outlets in high-tier cities, which are basically similar to the number of Oupai stores; there is still plenty of room for expansion in other cities other than first-tier cities.
From the perspective of store location. Most of the custom home furnishing enterprise stores are located in the home store good building materials frontage shops, and shangpin home furnishing innovation will be most of the stores located in the shopping center. In the store, custom homes are generally located on the 2-4 floors of the low-rise core floor, and the high-rise is generally based on luxury, solid wood homes. At the same time, benefiting from years of good and stable cooperative relations, as well as large brands have a bonus effect on the store, the head of the enterprise occupies a high-quality position in the sales stores of large chain home furnishing stores such as Macalline and Actually Home, which are generally located near the elevator entrance, which is convenient for customers to participate, and the customer flow rate is much higher than that of small and medium-sized brand stores.
Packaging channels: the whole industry chain is opened up, and the cooperation models are diverse.
The whole decoration is based on the furniture equipment, superimposed on the integration of the home improvement supply chain, mainly through the integration of upstream home improvement resources, to provide consumers with design, decoration, flooring and tiles and other basic and hard installation services; some enterprises at the same time integrate downstream resources, and cooperate with soft decoration and home appliance companies. At present, the decoration business model of the first few custom home furnishing companies is quite different, first of all, Shangpin Home Furnishing adopts the model of self-built decoration + providing information platform/supply chain/product for small and medium-sized home improvement companies; the other several adopt cooperation models, but there are still differences in the specific realization: 1) Oupai develops the decoration enterprises into dealers of their own companies; 2) Sophia on the one hand, the company and large decoration companies establish joint venture subsidiaries; on the one hand, the company or distributors cooperate with regional decoration companies 3) Zhibang Home Furnishing adopts the model of cooperation between the company or distributor and the national or local decoration enterprises.
Oupai Home: Leading the whole decoration cooperation model, developing high-quality decoration enterprises to become dealers. Since 2018, Oupai has begun to promote the business of renovating large homes, and cooperated with high-quality home improvement companies with large scale and good reputation in various places. With its high brand awareness, rich product categories and mature information system, Oupai empowers home improvement enterprises with brands, products and information systems; home improvement companies are responsible for providing design, construction, installation and other services. In terms of cooperation mode, it is mainly to recruit home improvement companies as the whole decoration distributors of Oupai, and also take into account the mode of direct cooperation with the headquarters of home improvement companies and cooperation between dealers and local home improvement companies. Among them, the model of home improvement companies as franchised dealers, in addition to having the advantage of the whole decoration business will drain the flow front, it is also conducive to oupai to expand the dealer network, expand the sales area, and carry out in-depth cooperation with home improvement companies.
The home improvement companies that join the European party are divided into different market levels, corresponding to different soft and hard power requirements, such as the highest A1 level market requirements of 1,000 households completed in the previous year, and the display area of shopping malls must be more than 600 square meters. Due to the strict restrictions on the joining conditions of Oupai for wholesale dealers, and the mature dealer management experience of Superimposed Oupai, we believe that "obtaining high-quality home improvement company in-depth cooperation resources + rapid expansion + brand, product and information system empowerment" will gradually build a solid barrier for Oupai in the field of assembly.
The scale of Oupai's assembly business continues to expand. The company's wholesale orders in 2018 were 350 million, 600 million in 2019 and 1.02 billion in 2020. In 2021, the company further exerted its strength in the field of decoration, launched the whole custom brand "StarHomes Star Home" in April, built a new decoration model centered on customized products, customized + main material + soft decoration + hard decoration construction, and created a multi-format integration of the sharing and co-construction of the whole decoration platform; in September, Oupai Wardrobe led the launch of 29800 high-profile whole packages; then Star Home held a brand strategy conference in Hangzhou and released the "integrated whole family customization" strategy. As of the end of 2021, the performance of Star Home exceeded 500 million within 8 months of its establishment.
Sophia: Establish in-depth cooperation with large installation companies, and joint ventures and joint venture subsidiaries. Sophia began to expand home improvement and decoration channels in 2019, taking advantage of the company's high brand awareness, and rich categories and leading quality products, etc., to cooperate with national or regional home improvement and decoration enterprises with strong strength nationwide, and national decoration enterprises such as Star Art Decoration and Shengdu Home Decoration jointly set up subsidiaries with them; at the same time, promote dealers to cooperate with local small home improvement, decoration and design studios to achieve omni-channel marketing.
In terms of specific realization, through the operation mode of one city, one business and product exclusive supply, we help dealers to develop the home improvement market, go deep into the terminal, and jointly explore the output standard Simi home improvement channel terminal operation mode with dealers, complete the layout of some dealers' home improvement channels, and initially realize the performance increment of home improvement channels. In terms of product supply, we have developed 9 sets of home improvement channels for exclusive products, and seized the home improvement market with high value and high quality. At the same time, it has reached strategic cooperation with boss electrical appliances, increased products such as Mofei small household appliances and department stores, enriched the supporting product line, and further upgraded from the overall cabinet to the overall kitchen, providing consumers with more high-quality supporting choices.
In terms of performance, the company's decoration and home improvement channels expanded smoothly in 2020, and in 2020, it completed the signing plan of 500 decoration enterprises (including direct signing and dealer direct signing), and achieved sales of 74.1731 million yuan. In 2021, the performance of the assembly channel continued to grow, and the revenue of the 2021H1 assembly was 135 million yuan, which doubled the growth of the whole year of 2020; the total revenue of the whole assembly from January to September was 313 million yuan.
Zhibang Home: The cooperation mode of headquarters or dealers is parallel, and the business scale is small and growing fast. Zhibang began to expand the decoration business in 2019, the cooperation model is similar to Sophia, in the retail channel to encourage dealers to cooperate with home improvement companies or regional decoration companies; at the same time, the company carries out cooperation with large decoration companies, such as Qeeka and Shanghai Mingju, to provide customized products and services for partners. At the beginning of the establishment of the business, the company reorganized the whole channel team, reconstructed the whole product system, operated with the dual brands of "Zhibang" and "IK", completed the product development of 7 sets of customized new products and 20 sets of cabinets in the channel, established a standard exhibition hall, and jointly developed the special software for the whole channel with a third party, laying a solid foundation for the development of the whole channel business. The business scale is still small, but the growth rate is relatively fast, in 2019, The revenue of Zhibang's assembly business was only 0.3 billion yuan, and it grew to 110 million yuan in 2020, +238.7% year-on-year.
Shangpin home delivery: Internet gene empowerment, the construction of a full cloud and self-operated double mode. Shangpin home delivery adopts the mode of whole cloud and self-operated decoration. The practice of the whole cloud is similar to the Internet platform, providing a supply chain information system for small and medium-sized decoration enterprises, which benefits from the Internet gene of Shangpin Home Delivery, which originated from "Yuanfang Software"; at the same time, it gathers suppliers; and provides them with company-specific home products, as well as brand and marketing support. HomkoO Decoration Cloud was established in March 2018, using the leading S2b2c business model, through the four major empowerments of sales management empowerment, marketing empowerment, supply chain empowerment, software system empowerment, etc., to fully realize the integration of soft and hard decoration design, the integration of main and auxiliary materials, customized furniture, accessories procurement, and construction integration. HOMKOO Decoration Cloud effectively solves the pain points of small and medium-sized decoration enterprises.
As of the end of 2019 and 2020, the number of HOMKOO national members reached 2497/3000 respectively, +108%/20% year-on-year. Revenue was $346.66/$467 million, +190%/35% year-on-year, respectively. 2021H1 revenue of about 278 million yuan, +79% year-on-year. Christmas bird self-operated decoration in first-tier cities can well match the reloading needs of such stock houses. In 2019 and 2020, 1693/1968 Christmas bird assemblies in Guangzhou, Foshan and Chengdu were delivered respectively, +99%/16% year-on-year. Revenue (full caliber, including furniture matching, the same below) was 275/345 million yuan, +109%/25% year-on-year. 2021H1 Christmas Bird was delivered to 1172 households, +145% year-on-year, with revenue of 213 million yuan, +127% year-on-year.
Brand power: leading companies have high popularity and good reputation
There are differences in brand popularity awareness. With high-quality products, design in line with the public's aesthetics, efficient service, all-round marketing, Sophia and Oupai have deeply bound their own brands with their own advantageous products under years of operation, which is very popular and popular. To a certain extent, the Baidu index can reflect the brand popularity, consumer attention, and brand influence. Judging from the Baidu index trend in the past decade, the popularity of each brand is basically Oupai, Sophia and Shangpin Home Furnishing in the first echelon, and the average of Baidu index in 10 years is 1722/1976/1838; Zhibang, Hollyoaks, and gold medal cabinets are in the second echelon, and the average of Baidu index in 10 years is 420/677/481. Sophia's popularity has risen significantly in 2020, with a year-on-year increase of 5.5%/48.5%/169.7%/118.0% year-on-year in the four quarters.
From the perspective of geographical distribution, the company in East China and South China generally received higher attention, and in the past year, Sophia's popularity in East China has risen especially significantly, and the popularity of Shangpin home delivery has declined. Judging from the news headlines, Sophia officially announced the upgrade of brand positioning to "cabinet customization expert" through an online conference in 2020, and the slogan was also upgraded to "professional custom cabinet, that is, Sophia". "Focus", "professional" and "expert" have become the core keywords of Sophia's brand image, and this marketing style is extremely effective, and with Sophia's follow-up continuous marketing promotion, the popularity has increased significantly in the past year.
The chain of customized services is long, and the big brands have credibility endorsement. The service chain of custom home furnishing generally includes the following five links: online appointment - door-to-door measuring ruler - design plan - distribution and installation - after-sales service. Due to the low frequency of the purchase amount of customized home furnishing, and non-standardized personalization; and the service chain is long, there is no unified standard for product quality, pricing and quotation, it is difficult for customers to compare the three companies to fully consider the cost performance, so the brand influence and channel marketing promotion have a greater influence on the customer's purchase decision, and the large brands of large companies have a good reputation endorsement and relatively strong marketing capabilities.
4 Financial analysis: The head company maintains steady and rapid growth with high-quality profitability
From the perspective of revenue, the revenue of Opal/Sophia/Shangpin Home Delivery/Zhibang/Hollyoaks/Gold Medal Cabinet 2020FY was 146.28/82.84/64.61/38.08/21.58/2.623 billion yuan, respectively; +8.9%/8.7%/-10.3%/-1.9%/24.2% year-on-year. Oupai is the only custom home furnishing company with revenue exceeding 10 billion, and the revenue growth rate is always high, CAGR5 is 21.3%; Sophia and Shangpin home delivery income are above 5.000 billion, the growth rate has shown a downward trend in recent years; In the Zhibang home, Hollyoaks and gold medal cabinets with revenue below 5 billion, Zhibang and Gold Medal have benefited from the remarkable expansion of categories and channels, and their revenues have grown rapidly in recent years. Due to the slow expansion of the Shangpin home delivery and Hollyoaks categories and the late layout of bulk channels, its revenue growth rate after 2018 was lower than that of several others.
From the perspective of net profit, the net profit of Oupai/Sophia/Shangpin Home Delivery/Zhibang/Hollyoaks/Gold Medal Cabinet 2020FY was 4.83/9.43/12.99/15.72/18.39/2.063 billion yuan, respectively; 12.1%/11.8%/-81.0%/20.0%/-24.1%/20.4% year-on-year. Profit growth rate is also affected by the company's category and channel development speed, especially the expansion of bulk channel business. Shangpin Home Delivery's profit in fiscal 2020 fell sharply, on the one hand, due to the fact that the profit is still in the climbing period after the comprehensive transformation of the home business; on the other hand, it is due to the company's failure to follow up the bulk business in time.
Vertical comparison to open, Oupai because the offline store layout has been basically perfected, there is no large-scale expansion, mature stores account for a high proportion, so the store efficiency gradually improved, driving the steady growth of profit margins. Sophia benefited from its strong brand power and scale advantages, and its profit margin remained stable and at a high level in the industry. The profit margins of other companies have declined in recent years, on the one hand, mainly affected by the continuous increase in the proportion of low gross profit margin decoration business and bulk channel revenue; on the other hand, under the impact of the epidemic, offline stores have been affected by the decline in revenue and the amortization of fixed cost expenses, and at the same time, the concessions, promotional activities and promotion activities of various companies to dealers have increased during the epidemic.
From the perspective of the gross profit margin of the subdivision categories, the gross profit margin of each company's own advantageous business is at a relatively high level. FY2020 cabinets with higher gross profit margins of Oupai, Zhibang and Gold medals reached 36.2%, 41.8% and 32.9% respectively; Sophia and Hollyoaks only 22.7% and 25.3%, but the revenue of the cabinet business of the two companies accounted for a smaller proportion and had a smaller impact on the overall gross profit margin. The gross profit margin of the wardrobe is about 40.0%, and the gross profit margin of Oupai, Sophia and Hollyoaks is basically around 40.0%, and the zhibang and gold medal are about 30.0%. The gross profit margin of wooden doors is about 15.0% except for Hollyoaks, and the gross profit margin of Hollyoaks wooden doors is 32.2%, while FY2019 is only 13.0%, and the rapid growth of gross profit margins is due to the company's acquisition of Hubei Qianchuan Wooden Doors.
From the ROE point of view, the ROE of Oupai, Sophia, Zhibang and Gold Medal is higher, and FY2020 is about 20%, of which Sophia's ROE is the most stable. Through DuPont analysis and dismantling, the asset turnover and net interest rate of Opal and Sophia are high, and the debt level is healthy; The indicators of Zhibang are also relatively balanced, the turnover is fast, and the profitability is relatively low; the profit margin of Shangpin Home Delivery is low, the asset turnover rate of Hollyoaks is low, and the debt of gold medal cabinets is too high.
From the perspective of cost input, first of all, on the sales side, the sales expense ratio of each company is basically optimized year by year. The scale and proportion of sales expenses of Shangpin home delivery are the highest, and the marketing expenses are large, FY2020 sales expenses are 24.3%; the sales expenses of Opal and Sophia are larger, but the proportion is relatively low, and they have been controlled below 10.0% in recent years; the sales expense rates of Zhibang, Hollyoaks and gold medal cabinets have been 10.0% to 15.0% in recent years, and the optimization of gold medal cabinets is larger.
From the perspective of cash flow and debt ratio, because the retail end of the custom home furnishing industry has the characteristics of fixing production by sales and paying first and then goods, its cash flow is better and the debt ratio is lower. Leading companies have more abundant cash flow due to their large business volume and high voice. In recent years, due to the increase in the proportion of bulk channels and the rise of decoration channels, on the one hand, bulk channels involve cooperation between custom home furnishing companies and real estate developers; on the other hand, the whole packaging channel involves more participants in a more complex supply chain, which has a relatively large impact on the cash flow and interest-bearing liabilities of custom home furnishing companies, resulting in a decrease in cash on hand and an increase in interest-bearing liabilities. For example, Oppai and Sophia used to have the lowest interest-bearing debt ratios of 1.0% and 3.7%, respectively, and FY2020 has grown to more than 10.0%, while Oppei's cash coverage ratio of interest-bearing liabilities is as high as 31.74 in FY2017, while FY2019-2020 is only 0.87 and 1.68.
Affected by large amounts, the growth rate of accounts receivable varies greatly. Due to the high quality requirements of Oupai Home and Zhibang Home for customers in the early stage, the growth rate of their receivables is slower, and the pressure on the revenue side is small. Sophia is affected by Evergrande's business, receivables growth is relatively fast, as of the end of June 2021, according to the top five accounts receivable collected by the debtor, Evergrande's accounts receivable ending balance alone reached 194 million yuan, accounting for the company's accounts receivable ending balance ratio of up to 20.61%. At present, Sophia has also actively solved Evergrande's receivables problem through asset satisfaction and other means, and it is expected that the pressure on payment collection in 2021H2 will improve. The significant increase in Hollywood's receivables was mainly due to the consolidation of The Thousand Rivers Wooden Gate during the Reporting Period. From the perspective of the number of days of accounts receivable turnover, the use of funds by Shangpin Home Delivery, Hollyoaks, Gold Medal Cabinets and Oupai is relatively efficient and relatively stable.
Bulk business risks affect FY21 performance. Recently, some furniture companies have successively disclosed FY2021 performance forecasts, and some companies have disclosed that due to the large-scale default event of commercial acceptance bills due to the maturity of major customers and their member enterprises, they have analyzed and evaluated the recoverability of receivables and issued goods, and believe that the signs of impairment are obvious, and they intend to make special credit impairment losses for the customer. The amounts involved are large, which has a large negative impact on the profitability of each company in the fiscal year of FY21. In terms of risk control in bulk business, it is expected that companies will pay more attention to the optimization of customer structure in the future, select state-owned enterprises, central enterprises and some private enterprises with good credit standing, and at the same time diversify risks and reduce the proportion of head customers.
5 Custom home furnishing key company analysis
Oupai Home: The layout is early and wide, leading the trend of the industry benchmark
(1) Development history
Founded in 1994, Opal Home is a pioneer and leader in the custom cabinet industry in Mainland China. The company takes the overall cabinet as the flagship to drive the development of related industrial industries, including whole house customization, wardrobe, bathroom, wooden doors, metal doors and windows, armored doors, furniture, kitchen appliances, soft decoration, whole home, etc., forming a diversified industrial pattern, is a domestic comprehensive modern overall home integration service provider. The core of brand culture is "there is a home and a love and a European pie".
1. Expansion stage of single category (1994-2002)
In 1994, Yao Liangsong established Guangzhou Kangjie Kitchen Equipment Co., Ltd., taking the lead in introducing the European concept of "integral kitchen" into China. In 1995, the decoration engineering company was established to introduce the one-stop service concept of kitchen and decoration. In 1996, the trademark "Oupai" was successfully registered. In 1998, the business gradually expanded to Beijing, Shanghai, Hangzhou and other central cities, and then vigorously promoted the national marketing network, creating a precedent for the chain operation of the cabinet business. The Oupai agent franchise system has begun to take shape, and franchise shopping malls and service centers have been established in more than 100 large and medium-sized cities across the country. In 2000, the annual sales of Opal exceeded 100 million yuan.
2. Category Expansion Phase (2003-2013)
The expansion layout of the European category predates the industry. In 2003, it entered the bathroom industry, and initially realized the information management of cabinet orders; in 2005 and 2010, it entered the overall wardrobe and wooden door industry respectively, forming a development pattern of full coverage of the main categories of customized home. Based on the company's leading position in the field of cabinets and the rapid growth of other categories after the introduction of multiple categories, the annual sales of Opal exceeded 1 billion yuan for the first time in 2007, and the sales of 3 billion yuan in 2012, with more than 2,000 franchised shopping malls.
3. Whole House Customization Stage (2014-2017)
In 2014, Oupai officially released the big home strategy, transforming from a product operator to an integrated home solution provider. In 2016, Oupai officially announced the major strategy of "three horses and one car", and fully launched the big home, informatization and the second brand Ou Bo Li. On March 28, 2017, Opal was listed on the main board of the Shanghai Stock Exchange.
4. Empowerment Phase (2018-present)
In 2018, Oupai took the lead in creating a "whole decoration empowerment" of the whole home model, and achieved the milestone of annual sales exceeding 10 billion, opening a new era of sprinting to a new peak of 100 billion market value. In 2019, Oupai upgraded the new business model of "whole decoration empowerment", joined forces with leading home improvement enterprises across the country to develop Oupai Big Home (Xingju & Weiju), from a single product provider to a large home integrated solution provider; and opened a strategic "famous brand plan", through the integration of various brand-name resources, continue to expand SKUs, enrich categories, and gradually build an integrated purchase and service platform for whole-house brand-name products, and strive to transform from a product service provider to a platform builder. In the same year, a new high-end product line was launched. In 2021, the new brand "StarHomes Star Home" was launched, which opened a new upward channel for the European decoration home and became an important supporting section for the growth of the group's performance. (Source: Future Think Tank)
(2) Business analysis
Opal Sophia has a complete range. The variety of Oupai products is balanced, starting from the cabinet, and then gradually developing the whole category of bathroom, wardrobe, etc., and the income structure is mainly based on cabinets and wardrobes, and enjoys high share and high brand awareness in the cabinet and wardrobe markets. The channel side is dominated by dealer channels, and in recent years, the proportion of bulk channels has gradually increased, becoming a new source of revenue growth, FY2016-2020, the proportion of bulk channels increased from 8.1% to 18.5%.
(3) Competitiveness analysis
1. Industry leading position and strong brand influence. Since its establishment 27 years ago, Oupai has been diligently pursuing the road of specialization with its strong scale and strength advantages. The "Oupai" brand has considerable brand awareness and influence in the minds of consumers, and is gradually transforming into reputation and trust, and the advertising slogan of "there is a home, there is love, there is Oupai" has been deeply rooted in the hearts of the people. From 2016 to 2020, Oupai was selected into the list of China's top 500 brand enterprises for 5 consecutive years with strong brand strength, and climbed year by year, ranking 146th in 2020 with a brand value of 43.566 billion yuan; in addition, Oupai was also selected as one of the top 500 private enterprises in China's manufacturing industry for four consecutive years; in 2019 and 2020, it won the honors of "Hurun China's Top 500 Private Enterprises" and "China's Top 500 Manufacturing Enterprises" for 2 consecutive years.
2. Forward-looking strategic vision and first-mover advantage. Oupai management has a forward-looking business vision, since its inception has always been the benchmark and weather vane of the industry, leading the industry trend. From the initial creation of the mainland's overall kitchen precedent, to the layout of diversified categories, to the opening of all categories; the channel end from the dealer agent model, to the whole decoration business to develop the home improvement company into its own agent model, as well as the rapid expansion of offline outlets nationwide, as well as the rapid layout and development of bulk, assembly, online channels, Oupai has always been in the leading position in the industry.
3. Diversified channel layout and strong terminal sales system. After years of channel investment and construction, the company has established the largest marketing service network in the home furnishing industry that works closely with the Group and grows together, with the most powerful dealer (service provider) resources in the industry, and more than 7,000 distribution stores. In terms of terminal management, since its inception, the company has been adhering to the concept of dealer tree roots, pioneering the thousand point assessment mechanism, "10 + 1" European terminal marketing system, double 50 theory, store 4S management and other perfect dealer management system and effective implementation. At the same time, the company conforms to the development trend of the industry, deepens the omni-channel development strategy, and builds a more mature channel operation model with retail and assembly channels as the main trunk, engineering and e-commerce channels as the two wings, and direct operation and foreign trade channels as important supports.
4. Advantages of independent research and development of information management software. The company is one of the few enterprises in the industry to develop the full-process information management system, and the self-developed CAXA full-process information system realizes the information technology series from the front-end product design, order formation, order review, order quotation, order deduction, to the back-end order scheduling, organization production, finished product shipment and other links. The customer determines the design plan in the Oupai store, and then the plan is transmitted to the company through the information platform, and the BOM list is generated immediately, and every link of the order, such as price review, deduction, scheduling, and processing, can be displayed on the electronic information platform. The use of information tools has greatly improved the exemption rate and one-time pass rate of factory orders.
5. Strong product and process research and development innovation ability. Adhere to innovation to promote development, continuous independent research and development, innovation, unremitting research and development of new products, new materials, new processes, new technologies, so that the company's process and research and development level has always been in the forefront of the industry. In order to meet the market demand, we continue to research and explore in the fields of product process structure design, new material development and application, process quality management and so on. The leading level of process technology provides a strong technical guarantee for the production of high-quality customized furniture products. Continuous improvement and innovation of production technology, with informatization as a tool and means, to promote the improvement of process technology, to establish a results-oriented incentive assessment mechanism for technical personnel, and to establish a sound process-level process control system. After years of efforts, the company's product development has gradually transitioned from single product customization to whole house customization and whole family customization, from single new product design to new product design, extension design, and functional design. As of December 31, 2020, the Company and its holding subsidiaries had a total of 696 patents and 84 computer software copyrights.
6. Flexible large-scale non-standard customized production capacity. With the company's continuous R & D investment over the years, profound technical process reserves, leading home research and development strength, and the bargaining power of upstream and downstream of the industrial chain, the company has explored a large-scale non-standard customized product manufacturing model with European characteristics. At present, the total scale of the company's customized furniture products production ranks first in the industry. The company's production capacity design is based on the national layout and the strategy of large home, relying on production and manufacturing, to build four major production bases in the east (Wuxi base), south (Qingyuan base), west (Chengdu base) and north (Tianjin base), forming a national production capacity radiating East China, South China, West China and North China.
(4) Shareholding structure and management
Equity is highly concentrated, and the equity structure is stable for a long time. Yao Liangsong, the actual controller of the company, is also the founder of the Oupai kitchen cabinet brand, and as of the end of the third quarter of 2021, Yao Liangsong held 66.19% of the company's shares, and together with his brother Yao Liangbai held a total of 74.7% of the company's shares. The high concentration of equity and long-term stability ensure the company's efficient decision-making and implementation. In addition, many institutions rank among the top ten shareholders of the company, reflecting that Oupai Home furnishing is favored by the market as a leading enterprise with good growth.
(5) Growth
Cabinet business revenue and gross margin: As the company's dominant business, the scale is large but the market share is still small, according to our judgment of the trend of differentiation within the industry, the company is still expected to gain a larger market share. At present, the company's cabinet distribution store layout has been relatively perfect, the future to improve the efficiency of the store through product upgrades, improve the matching rate and customer unit price, the emerging channels, online channels are expected to bring new traffic. Revenue is expected to maintain steady growth and gross margin increase slightly.
Sophia: Cabinet expert, pioneer of customized wardrobes in mainland China
(1) Company profile / development history
1. Initial cooperation phase (2001-2009)
In 2001, the founder of the company, Jiang Ganjun, introduced the French wardrobe brand SOGAL into China, took the lead in proposing the concept of "customized wardrobe", and the products began to be sold in China, creating the era of China's custom wardrobe. In 2003, the predecessor of the company, Ningji Co., Ltd., was established, and in the same year, the South China production base in Zengcheng, Guangzhou, was officially completed and put into production. In 2004, NIN Foundation Limited and SOGAL established a joint venture with Sophia Guangzhou to build a joint hardware procurement platform between the two parties, and Bought back the remaining shares of NINji before listing. In 2009, the company was changed to a joint-stock limited company and a joint venture.
2. Growth and maturity stage (2011-2013)
The company was listed on the Shenzhen Stock Exchange on April 12, 2011, becoming the first custom wardrobe company to be listed on the A-share market. In 2011, Sophia Research Institute was officially established to help the company's product research and development. In 2011, sales exceeded the 1 billion mark, and the number of stores nationwide reached 800. In this stage, the first, the rapid launch of new products in terms of products, 2012-2013 has successively launched a number of series of customizable supporting furniture, from the original bedroom series, study series to living room series, dining room series, etc. In 2013, the company launched the La Défense series and Avignon series, which are composed of a full set of home furnishings, and began to create a one-stop purchase service.
Second, the rapid expansion of production capacity, to the original South China production base to invest in the investment funds, the construction of customized wardrobe technology upgrade project, in order to expand production capacity; at the same time through the capital increase and share expansion and acquisition of production capacity and other forms of rapid layout of the national production system, in 2012 to acquire Sichuan Ningji building decoration materials company, the construction of East China, North China production base. At this point, the company's production system covering South China, West China, East China and North China has begun to take shape. Third, the comprehensive transformation of production technology has realized the transformation from a composite production mode of standardized production of standard parts and flexible production of non-standard parts to a fully flexible production mode.
3. Optimization of the development stage (2014 to present)
At this stage, the company gradually landed from category expansion to the strategy of large home. In November 2013, the Cabinet Division was established, and in the same year, the advertising slogan was changed from "Custom Wardrobe is Sophia" to "Custom Home Sophia", focusing on creating a whole house customization expert brand. In 2014, it established a joint venture with SALM SAS to establish "Simi Cabinet", and in 2015, the cabinet factory in Zengcheng was officially put into operation. By the end of 2016, Simi Cabinet had nearly 400 dealers and 600 independent dealer stores, achieving operating income of 418 million yuan. In 2017, the company and Huahe Group, a representative enterprise in the custom door and window industry, jointly established "Sophia Huahe Doors and Windows Co., Ltd." to enter the domestic custom wooden doors and windows industry. The company's assembly business has achieved initial results from the exploration of 2019 to 2020, completing the signing plan of 500 decoration enterprises throughout the year, and reaching a strategic cooperation with Shengdu Decoration, setting up a joint venture company to achieve deep binding. In 2022, the company's entire customization set sail in an all-round way, launching a 39800 whole customized package, and creating an innovative way to "take the just need as a giveaway, free to the cabinet".
(2) Business analysis
Sophia has a complete range of products, and the income is always based on wardrobes. In recent years, with the opening of all categories, the brand positioning of classification experts has become more deeply rooted in the hearts of the people, the development of whole house customization and bulk channels, the rapid growth of other categories, especially the rapid growth of cabinet business revenue, the proportion of wardrobe revenue has gradually declined, from 91.8% in FY2016 to 80.2% in FY2020. The proportion of channel-side dealer channels is the highest, falling from 92.7% in FY2016 to 78.5% in recent years; at the same time, the proportion of bulk channels has increased rapidly, from 2.8% in FY2016 to 18.1% in FY2020.
(3) Shareholding structure and management
Equity is relatively concentrated. As of the end of the third quarter of 2021, the company's co-controlling shareholders and actual controllers Jiang Ganjun and Ke Jiansheng directly held 40.64% of the shares, and Mr. Jiang Ganjun and Mr. Ke Jiansheng have maintained a cooperative relationship and started a business together since the 1990s because of their good relationship and similar aspirations. The two jointly established NINCH Limited in 2003 and have been performing their respective roles in the management of the company. The company's equity structure is stable and its decision-making execution is strong.
(4) Growth
From the perspective of sub-channels, the company's traditional offline stores still have sufficient room for expansion, especially the sinking space is large. Among the emerging channels, the whole channel is expected to put traffic in front, and the traffic obtained through the wardrobe is relatively backward; and the online channel is expected to bring new traffic.
Shangpin home delivery: Internet gene, transformation can be expected
(1) Company profile / development history
Shangpin Home Furnishing originated in the 1990s, with home software research and development and home industry portal as the starting point for entrepreneurship, has been committed to software research and development and Internet operation, and crossed into the custom furniture industry, with its information technology capabilities and Internet genes to build the company into intelligent production as a means, consumer-centered "C2B + O2O" business model of modern custom furniture service enterprises. The company is mainly engaged in the personalized production and sales of whole house panel furniture, the sales of supporting household products, and provides design software and information technology overall solution design, research and development and technical services to enterprises in the home furnishing industry.
1. Formation stage of company system (1999-2009)
In 1999, the founders Li Lianzhu and Zhou Shuyi founded Yuanfang Software; in 2000, they created a home industry portal; in 2004, they crossed borders into the field of custom furniture sales, creating a limited number of products; in 2006, they entered the field of custom furniture production, created Foshan Weishang, and used software information technology to transform the traditional model of custom furniture production; in 2007, they launched a new domain name, created a new home network, transformed the household products group purchase business, and took the lead in proposing a 3-bedroom and 2-hall whole-house customization model; 2009 In the same year, Li Lianzhu and Zhou Shuyi took Shangpin Limited as the main body to reorganize the equity of Fangyuan Software, Xinju Network, Foshan Weishang, etc., and realized the "C2B+O2O" business model of customized furniture with the help of Fangyuan Software's cloud computing, big data application flexible production process design and other technical capabilities with the help of Fangyuan Software's cloud computing, big data application flexible production process design and other technical capabilities.
2. Comprehensive transition to the home stage (2010-2017)
In 2010, the creation of a new category of home delivery, huge investment in the creation of furniture home delivery in the first year; in 2012, the overall change was set up as Shangpin home delivery; in 2014, the store of Shangpin home delivery from the building materials store into the shopping mall and office building, the difference between the store location and other companies is in line with the company's "light" operation model; in 2016, I + lifestyle research, the fifth factory was officially put into production, the daily production capacity exceeded 200,000 pieces; in the same year, Industry 4.0 realized large-scale personalized customization and moved the home from imagination to reality; in 2017, The company is listed on the Shenzhen Stock Exchange.
3. Home Business Upgrade Stage (2018 to date)
In 2018, the establishment of C store (super collection store), the opening of the new retail era of home furnishing, so far Shangpin home delivery has a total of three models of stores: SM (Shopping Mall) shopping center store, O (O2O) online drainage store and C (collection) store, C store is the integration of the first two modes, the collection of online and offline guests; in 2019, the launch of the second generation of whole house customization mode, based on intelligent technology, to achieve the whole house matching; 2020 total investment of 30 Wuxi East China Intelligent Manufacturing Base of 100 million yuan was officially put into production, covering an area of more than 300,000 square meters; in the same year, the "green home aldehyde-free customization" whole house aldehyde-free upgrade strategy was released. In 2021, it was publicly stated that the company clearly set the goal of comprehensive transformation and decoration of self-operated cities, and the future of Shangpin Home Furnishing is not only a custom furniture company, but also a one-stop service decoration enterprise in the local city. In the same year, he entered the war investment Jingdong and jointly built an Internet platform for the whole supply chain.
(2) Business analysis
In the field of 2C consumer business, Shangpin Home Furnishing is mainly based on the personalized custom production and sales of whole-house panel furniture and the sales of supporting household products, and in recent years, a new BIM (Building Information Modeling) assembly model has been added, that is, to realize the integration of soft and hard design and sales, and to realize the digitization and informatization of soft and hardware integration. In the field of 2B industrial Internet, in addition to providing design software and information overall solution design, research and development and technical services to pan-home industry enterprises, it also empowers traditional home improvement enterprises with new industrial models through innovative technical means such as the Internet, big data, cloud computing, AI artificial intelligence, and agile supply chain management, reconstructs the industrial chain and value chain of the home improvement industry, innovates and changes the traditional home improvement model and upgrades it to a modern decoration business model (that is, HOMKOO whole cloud platform business). The company's home sales revenue accounts for the main part of the overall revenue, which has remained above 95% since 2014, and the revenue growth rate of the whole decoration business has been significant in recent years.
(3) Competitiveness analysis
1. Advantages of leading informatization and digitalization. Yuanfang Software creates a leading virtual reality technology, provides a full-process digital transformation construction for the transformation and upgrading of traditional furniture enterprises, and enters the practical application stage of the cloud technology platform with cloud design and big data application as the core. Yuanfang software industry project solutions have been extended to civil furniture, building materials, kitchen wardrobes and office furniture in all fields, project implementation integration has a high degree of professional execution. Yuanfang Software also empowers traditional home improvement enterprises with new industrial models through innovative technical means such as the Internet, big data, cloud computing, AI artificial intelligence, and agile supply chain management, reconstructs the industrial chain and value chain of the home improvement industry, innovates and transforms the traditional home improvement model and upgrades it into a modern whole decoration business model.
2. The advantages of the integration of the whole house. The company launched the BIM assembly mode, that is, to achieve the integration of software and hard design, sales, and to achieve the digitization and informatization of the integration of software and hardware. Digitize each customer's home space, through the design of WYSIWYG from the front end, to achieve home decoration, home improvement main auxiliary materials, whole house custom furniture and supporting home products, prefabricated background wall, soft assembly decoration, electrical appliances and other home categories of one-stop matching, is committed to providing consumers with whole house decoration, whole house customization, whole house support and other integrated services.
3. Advantages of large-scale flexible customization. In view of the drawbacks of the traditional production model, the company boldly reformed the technology, created an intelligent production platform based on cloud computing and artificial intelligence, used Industry 4.0 to open up the back-end production and manufacturing, closely combined production technology and information technology, and implemented the whole process of digital services to meet the personalized needs of consumers to the greatest extent.
4. Sales channel advantages of O2O online marketing and offline physical store sales. At present, the company has established an online channel of offline physical stores with "direct stores + franchise stores" and O2O Internet marketing platform operated by Xinju.com, and the organic combination of online marketing and offline sales has greatly enhanced the company's competitiveness and laid the foundation for the rapid expansion of the company. The company uses Xinju.com as an online marketing platform to expand the coverage of customers, effectively lead online consumers to physical stores for experience, and achieve sales. Establish direct-operated stores in key cities to strengthen the control of sales channels of physical stores. The country vigorously develops franchise stores, which is conducive to the rapid development of the company's business scale.
(4) Shareholding structure and management
The company's shareholding structure is relatively dispersed. The actual controllers of the company are the company's founders Li Lianzhu and Zhou Shuyi, who are classmates, together with Peng Jinxiong, who founded Yuanfang Software in 1999 and Shangpin Limited, the predecessor of the company in 2004; as of the end of the third quarter of 2021, Li Lianzhu and Zhou Shuyi held a total shareholding ratio of 32.30%. On the evening of June 25, 2021, the company announced that the company will introduce Beijing JD.com as a strategic investor, and Dachen Caixin and Dachen Chuangfu intend to transfer a total of 9.9338 million shares (about 5.02% of the company's total share capital) held by them to Beijing JD.com at a transfer price of 66.47 yuan per share, with a total price of 660 million yuan. After the completion of the transfer, the shareholding ratio of Dachen Caixin and Dachen Chuangfu will be reduced from 17.50% to 12.48%, and Beijing JD.com will hold more than 5% of the shares, becoming a related party of the company.
(5) Growth
At present, the highlight of the growth of the company's business lies in the decoration business, and the implementation of the "comprehensive promotion of the whole decoration and the implementation of the big store strategy". On the one hand, we will strengthen the ability of digitalization, construction standardization and supply chain integration, gradually realize industrialization, and rely on the strategic positioning of "watching BIM do decoration" to create a new set of whole house decoration solutions for customers. On the other hand, we will continue to cultivate self-operated cities and create a sustainable urban development model. The company will continue to implement the development strategy of "direct stores", "direct sales O2O", "self-operated franchise", "expansion (bag)" and "whole package (whole case)" in self-operated cities. In the city where the self-operation is located, the future stock housing market volume will be much larger than the new housing market, and the characteristics of the stock housing market are highly matched with the advantages of the company's decoration model, so the company will fully roll out the self-operated decoration business in the self-operated city, providing a strong impetus for the scale of the company's self-operated city.
6 Investment analysis: grasp the opportunity of leading allocation under the trend of industry change
Optimistic about the industry power conversion, channel change in the background, the share of head brands continues to increase. On the one hand, the industry power has changed from the upstream real estate cycle drive on the supply side to the demand drive, consumers put forward higher requirements for product quality, and brands and products with relative competitive advantages are expected to be recognized by more consumers and increase market share. On the other hand, under the trend of channel change with the rapid development of bulk, assembly and online channels, the entire pan-home industry ushers in market integration opportunities, and for enterprises with wide channel layout, large channel discourse power, strong channel control, and products that meet channel needs, it is expected to gain greater market share in the process of channel change and integration.
Optimistic about the head group products, channels, brand advantages. At present, the mainland head custom brand reflects the absolute advantage in the three forces. First, in terms of product strength, the head enterprise uses high-quality materials; the product range is complete, and consumers can be selective; the design is in line with the public aesthetics, the product database is large, and the speed of innovation is fast, which greatly meets the personalized needs of consumers. Second, in terms of channel strength, the head enterprise has a wide channel layout, the layout of bulk, assembly, and online channels is early, the scale and proportion are constantly improving, and the control of channels is strong. Third, in terms of brand power, the head company has a high degree of popularity and attention, and at the same time has a good reputation, and the product has the credibility endorsement of a large brand.
(This article is for informational purposes only and does not represent any of our investment advice.) For usage information, see the original report. ）
Featured report source: [Future Think Tank]. Future Think Tank - Official website