Recently, the relevant policies such as "exchanging the old for the new" have been released one after another, clearly promoting the "renewal" of home decoration and kitchen and bathroom. Industry insiders said that the introduction of new policies is conducive to the further release of stock decoration demand. However, compared with high-penetration categories such as automobiles and home appliances, it is more difficult to implement the "renewal" of home decoration, kitchen and bathroom.
■In recent years, various listed home furnishing companies have laid out the "renewal" business of kitchen and bathroom.
Aiming at the stock market, it launched the "trade-in" for the first time in the field of home decoration
In the past month, the home furnishing industry has intensively introduced the policy of "trade-in". In April, the Ministry of Commerce and 14 other departments issued the "Action Plan for Promoting the Trade-in of Consumer Goods" (hereinafter referred to as the "Action Plan"), focusing on promoting the "renewal" of home decoration, kitchen and bathroom. With the expansion of the renovation of existing houses as the starting point, we will promote the replacement of consumer goods for home decoration, kitchen and bathroom, promote smart home consumption, and continue to release the potential of home consumption. Increase support for the people, improve the level of convenient services, cultivate new growth points for home furnishings, and optimize the home market environment.
Previously, in March, the State Council issued a notice on the issuance of the "Action Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-in", pointing out that it is necessary to implement the trade-in action of consumer goods, including "carrying out the trade-in of household appliances" and "promoting the replacement of consumer goods for home improvement"; The Action Plan is one of the supporting policies.
Industry insiders believe that the national level for the first time in the field of home decoration to launch the "old for new" policy is different from the past, the main background is the huge market potential under the stock market cycle and the industrial linkage of home improvement consumption. According to public data, the overall size of the home improvement and home furnishing market will reach about 5 trillion yuan in 2025 and 7 trillion yuan in 2030, with an average annual growth rate of more than 6%. Among them, the market size of stock housing decoration is expected to reach 3.34 trillion yuan by 2025.
The demand for stock housing is gradually becoming the main demand for decoration. According to the research data of the Shell Research Institute, in 2023, the demand for second-hand housing will account for nearly 60% of China's consumers with decoration needs, and the higher the energy level of the city, the higher the proportion of second-hand housing decoration. In addition, in 2023, 35% and 24% of consumers with home improvement needs will choose all-inclusive and all-inclusive respectively, and the proportion of high-energy cities will choose complete and all-inclusive, respectively.
On the enterprise side, the home furnishing industry is strongly related to the real estate industry, and in recent years, due to the continuous expansion of the stock housing market and the encouragement of the "trade-in" policy, it has tried to get out of another revenue curve. Wang Bing, president of Sophia Home Furnishing Group, recently publicly stated that in 2024, the demand for stock houses that need to be renovated and repurchased after the sale of second-hand houses will reach six or seven million units. Although the current demand for stock housing accounts for only 30% of the overall market, the company's stock housing customers in Beijing, Shanghai, Guangzhou, Shenzhen and other cities have exceeded half.
The kitchen and bathroom space is used as an incision to improve the quality of living, and the cost of consumers is lower
Why does the "trade-in" take the kitchen and bathroom space as a breakthrough? Industry insiders believe that this is related to the most prominent demand for the transformation of the space stock.
Han Jun, chairman of the Home Improvement Committee of the China Building Materials Circulation Association, said in an interview with the New Express reporter that many families hope to improve the quality of living through the renovation of old houses, but they are discouraged by the practical problems of long construction period and high cost. "The kitchen and bathroom are the most frequently used functional spaces in the home. It may cost two or three hundred thousand yuan to renovate the whole house, but the cost of renovating a kitchen or bathroom is only 20,000 to 50,000 yuan. Moreover, the construction period of partial renovation is shorter, bathroom renovation can generally be completed in 7 to 10 days, and kitchen renovation takes two or three weeks. In other words, the 'renewal' of the kitchen and bathroom space allows consumers to improve the quality of living at a relatively low cost of money and time. ”
It is worth noting that compared with high-penetration categories such as automobiles and home appliances, the "renewal" of home decoration, kitchen and bathroom may be more difficult to promote because it involves redecoration. Some industry insiders pointed out that the bulk consumption of home improvement is affected by the slowdown in economic growth is more prominent, and consumers are more sensitive to prices. Consumers' worries about whether home improvement companies will run away and go bankrupt have also increased. According to a home improvement market research data released by the Housing Branch of the China Decoration Association in February this year, the cost of home decoration per household in 2023 will be about 158,800 yuan, or about 1,791.3 yuan per square meter, a slight decrease from before. Among the three dimensional factors of price, construction and quality, consumers are more sensitive to price in the process of home decoration.
However, the "trade-in" is mostly for old communities and houses with a long age, and the construction is quite difficult. "The difficulty of kitchen and bathroom 'renewal' lies in the pre-assessment, and the accuracy of its assessment will affect the possibility of subsequent renovation risks. Han Jun pointed out that the construction process of the renovation of the old house is not complicated, but the evaluation before the renovation is very difficult. For example, from the 80s to 2000 of the last century, the building structure of the bathroom was different in different years. At present, it is more urgent to establish the standard for the renovation of old houses in old urban communities, and the standards in this regard lag behind the development process of the current industry.
In addition, living during the renovation period, storage and recycling of waste furniture may also be problems faced by the actual implementation of "trade-in". Taking waste household recycling as an example, although the "Action Plan" clearly supports enterprises to provide furniture, kitchen and bathroom and other household consumer goods to "send new" and return "old" services, and promote the "Internet + recycling" model. However, this measure has not yet achieved a complete closed loop in reality, and residents still need to pay for the "last mile" of waste furniture from residents' homes to dismantling centers, and many residents' attitudes have not changed.
The details of the trade-in subsidy policy have not yet been implemented, and enterprises are cautious
With the continuous release of a series of signals such as "trade-in" and old house renovation, the stock prices of many listed home furnishing companies have encountered a "roller coaster". The share prices of Aili Home and Yazhen Home have fallen sharply after 5 consecutive days, and once fell to the limit. The market view is that the stock price changes of related companies may be caused by the fact that the details of the "trade-in" subsidy policy have not yet been implemented, which affects investors' expectations.
In contrast, the "trade-in" subsidy policy for automobiles and home appliances is more mature. Taking household appliances as an example, according to the "Subsidy Standards for the Disposal Fund of Waste Electrical and Electronic Products" issued by the Ministry of Finance in 2021, functional departments will subsidize each unit for handling various electrical and electronic products ranging from 25 yuan to 100 yuan, and mainstream e-commerce platforms also have deduction measures for the "trade-in" of major appliances.
The relevant person in charge of a number of home furnishing companies told the New Express reporter that at present, the relevant rules on home decoration, kitchen and bathroom "renewal", such as the subsidy support at the government level, have not yet been actually implemented, and most of the current enterprises are paying out of their own pockets to carry out "trade-in" preferential activities. For example, individual bathroom brands provide consumers with preferential amounts ranging from 100 yuan to 1,000 yuan according to different product categories. Some practitioners said frankly that to promote the replacement of home decoration, kitchen and bathroom consumer goods, at present, it is still mainly encouraged by policies, and enterprises are relatively cautious about this, and it is still necessary to introduce relevant rules as soon as possible to assist in landing.
Many brokerage analysts pointed out that the current valuation of the home sector has fully reflected pessimistic expectations. "Recently, the stimulus policies for real estate and home consumption have continued to be released, stabilizing the expectation of consumer demand for new home furnishings, promoting the relay of demand for renovation of existing houses, and driving the valuation repair of the industry."
New Express reporter Liang Ruxin
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