On April 25, the smart home brand "Habit@ Habitat" announced the completion of angel round and Pre-A round of financing, with a cumulative amount of 653 million yuan. The Pre-A round was led by Li Auto, followed by Roborock, New Taipei Science and Technology Innovation Fund and other investors. This round of financing will be used for the research and development of smart housing products, the research and development of digital design systems, and the layout of national delivery infrastructure.
The "2023 China Home Decoration Industry Research Report" predicts that China's home decoration and home furnishing market will continue to grow in the next few years. The report points out that thanks to consumption upgrading, diversification of residential demand, and the promotion of industrial digitalization and intelligence, it is expected that by 2025, the overall size of China's home improvement and home furnishing market will reach about 5 trillion yuan, and by 2030 it will reach 7 trillion yuan, with an average annual growth rate of more than 6% in the industry.
However, in the past many years, the decoration is similar to saving computers in Zhongguancun, and there is no scale effect. Therefore, Shen Yanan, the founder of Habitat, believes that "building home improvement into a product is the biggest opportunity for this industry." ”
"Productization" and "scale effect" are opportunities for the home improvement industry
Entrepreneurship is a continuation of a mission, and the original intention of starting anew has not changed.
Prior to founding Habitat, Yanan Shen was the co-founder and president of Li Auto, where he was deeply involved in the establishment and success of Li Auto from 0 to 1. Today, with the vigorous development of new energy vehicles, the entire industry has witnessed the happy moment of the car as a "mobile home". But in reality, people spend more time at home than in the car. If you stay at home for more than 10 hours a day, you can become happier. Therefore, the creation of habitat is also committed to exploring how to create a happy space, and it is also a continuation from an ideal car to an ideal home.
"Theoretically, the home improvement market is bigger than the car building. Shen Yanan believes that houses, decoration, and vehicles are the three most expensive expenses in household consumption. Everyone spends less time in the car than at home, and the family spends the longest time. Therefore, creating a happy home is very valuable, if buying a house can make people have a sense of belonging, then decoration is people's yearning for home happiness, and many consumers are willing to pay for it.
From the perspective of the market ceiling, the large home improvement market was 3 trillion in the past, and the current scale is 5 trillion yuan, and it may have to run to 7 trillion yuan in the future. Home improvement is a huge market.
Then, whoever can solve the problem of scale effect will be able to achieve business success.
However, decoration is difficult. Whether it is media reports or examples around you, starting prices, cutting corners, and delaying the construction period...... It's all real things that happened.
"When it comes to renovation, consumers invariably have 'distrust' in their hearts. Spend a lot of time doing a variety of pit prevention strategies, and after a renovation, almost every family will have a pit prevention expert. There are even professional quality inspections in the decoration industry chain, and consumers have to hire them to test the quality of decoration. Shen Yanan described.
According to his analysis, these distrusts can be attributed to four uncertainties. "First, the effect is uncertain, the decoration company only gives renderings, does not know the details of the real decoration, and the materials bought in the process are not clear; second, the budget is uncertain, there is no complete and clear project cost list, and the decoration company will maliciously add items; third, the delivery time is uncertain. Finally, the quality of service is uncertain, and there is no shelf life and maintenance period for the finished house, and the quality depends on the character of your foreman. ”
When there are many problems, it means that the industry ecology is unbalanced.
At present, the home improvement industry lacks scale effect and is in the state of "big industry and small company". In Shen Yanan's view, "It's similar to saving computers in Zhongguancun in the past." Let's go to the Hailong Building, the little brother asks you to buy CPU, chassis, hard disk motherboard, etc., after picking, they will save it for you directly, assemble it, and a computer will be completed. ”
What Habitat really wants to achieve is the iteration of the home improvement industry's computer-to-laptop computer. In other words, the loose business model of Hailong Building to save computers will be upgraded to a business model that is more similar to buying a laptop, with one-stop product selection, after-sales, and good service experience.
Nowadays, the purchase of computers is the purchase of the whole machine, and the scale effect has been fully realized. However, in the home improvement industry, the scale effect has not yet been realized, just like the traditional tailoring industry (cabinets, floors, auxiliary materials, tiles, etc. are scattered), and the decoration company is very close to the tailor, putting together the mature materials. Before the apparel manufacturing industry has not been commercialized, it is completely impossible to solve the problem of scale effect.
Like buying a computer, turning decoration into a product is the biggest opportunity in this industry. In Shen Yanan's view, only by selling products can we obtain scale effect and further develop brands. If it is a computer-saving decoration, the final product is delivered by the designer and foreman, who have a high degree of freedom, and there is really no guarantee of user experience.
As a technology company focusing on life intelligence, Habitat has completed the delivery of "complete products", that is, "smart new homes", with highly integrated design, industrial manufacturing and delivery, providing home users with new decoration options.
Habitat Smart New Residential Products
To be a product company is a business model that Habitat adheres to. "In the U.S., home improvement exists in the form of retail, but it's also essentially a product company. For example, The Home Depot, an American decoration retailer, seems to be a retail company, but in fact, most of the things sold are his own products, which is a product company. The Home Depot accounts for 28% of the U.S. home retail market, with a market capitalization of $330 billion.
Investing in R&D is the most important part of creating value
How to make decoration a product?
The most important thing for a product is value creation, and the product should be invested in research and development. The business model of Habitat is product + direct sales. The biggest opportunity for this industry is to move from a tailoring industry to a product industry. In other words, there are three most important aspects of making products, the first aspect is to create value, the second aspect is value delivery, and the third aspect is value delivery.
The per capita residential area of Chinese was less than 10 square meters before the housing reform, and after the housing reform was 39.8 square meters, at the same time, the living area of Chinese will not grow rapidly in the future, and our mainstream middle- and high-income families will basically live in these existing houses in the next 50 years. Even if you move and renovate your house, you are basically replacing a second-hand house, and there are fewer and fewer new houses.
Based on this, the core value of Habitat is that every part of the home – from design to decoration, from appliances to smart devices – should be in harmony, no longer looking at each function in isolation, but putting the living experience at the heart of product development.
The most important thing in value creation is to invest in research and development. "Everything has to come back to the consumer's interests. Shen Yanan said, "When a house needs more equipment and functions to meet consumer needs, it needs integrated and high-density design, and it needs the help of research and development." ”
In Beijing, Habitat has gathered R&D centers for house type, intelligence, design, and digitalization to jointly promote the innovation of smart housing products. The R&D team comes from the forefront of intelligence, technology and architecture, and has professional backgrounds from top universities such as Tsinghua University and the Central Academy of Fine Arts, bringing advanced wisdom and competitiveness to the products.
For example, in the past year, Habitat has developed iVD digital design and delivery, creating a "twin" virtual home through a digital system, allowing users to experience the future home in an immersive way before construction, and the 1:1 restoration is also reflected in the concealed engineering (pipelines, circuit systems, etc.) can be displayed "realistically" in the virtual house, and construction drawings and construction quotations can be generated in real time to improve the quality of delivery.
iVD digital twin design system
People will have many needs for the improvement of their living environment. For example, in terms of household equipment and functional requirements, it is necessary to install fresh air systems, humidifiers, water softening systems, etc. For example, consumers' expectations for home life scenarios are also rising, requiring home theaters, smart kitchens, etc.
To achieve these goals, it is best to have a minimalist operating system. Habitat linkage control through convenient interactive methods: through the self-developed five-in-one panel, the five-in-one intelligent control of lighting, fresh air, air conditioning, floor heating and curtains can be realized, at the same time, indoor temperature, humidity, PM2.5, PM10, CO₂ and other five data can be displayed on one screen, and the panel can also be synchronized with the habitat App. "Smart home, one APP can do it. ”
It may also be more advantageous in terms of cost. During the renovation process, consumers need to deal with various intermediaries, and part of the fee is used to purchase the services provided by the intermediaries in the process of product selection, recommendation and sales. In addition, consumers often make choices without complete solutions and professional knowledge, and some irrational costs may be incurred in procurement.
Habitat believes that when consumers buy a complete product, the middleman is reduced, the cost will be controlled to a certain extent, and the product will be of high quality.
Compete on the field and be friends off the field
The housing area of Chinese families has been relatively stable, and when the concept of "housing is not speculation" has become a reality in recent years, the house has slowly returned to its residential function.
The background of car manufacturing allows Shen Yanan to understand the integration of complex product development and supply chain. It's easier to build a house than a car: if you buy a car, you have to buy about 17,000 parts to integrate, and to decorate a house, you can buy more than 2,000 parts.
However, the supply chain foundation of the home improvement industry is not good, there is no good supply, and self-research and cooperation with external suppliers are also needed. Another point is that the car is manufactured in the assembly workshop in a factory, the smart house is dispersed to thousands of households, and the "assembly workshop" is scattered.
In order to realize the "integration" of home decoration and ensure the consistent experience of the home, in addition to the above-mentioned research and development, the core products of the habitat are all produced and sold by themselves, so as to achieve the coverage of the whole industry chain.
In Changzhou, Jiangsu Province, the habitat has an integrated base, which is the core area to ensure the landing of the product. Among them, the wood intelligent manufacturing factory covers an area of 35,000 square meters, adopts digital processes, realizes efficient and environmentally friendly production, and provides consumers with safe and healthy home choices.
The habitat has also set up its own construction and service team. Home improvement engineers must strictly follow the standard process for construction, use unified tools and materials, and construct in accordance with standard drawings to ensure that the quality and progress of each project are reliable and controllable; This is something that the vast majority of decoration companies do not have.
These products are already on the market, and in 2024, consumers will be able to meet habitat experience stores in first- and second-tier cities such as Beijing and Shanghai. It is worth mentioning that in order to provide more transparent, convenient and efficient services, all stores have adopted a fully direct sales model.
Through the "what you see is what you get" experience, the new business model allows consumers to better understand the details and effects of the product, reducing the uncertainty of the follow-up.
At present, Shen Yanan believes that the most important thing for enterprises is research and development, and for the entire industry, the most important thing is to make a big cake together and expand the industry. "Creating a 'happy home' requires the entire industry to promote, and a few more companies are more likely to complete the intelligent optimization and iteration of the entire industry.
Regarding the competitive landscape, Shen Yanan made an analogy: "It's like on a basketball court, everyone wants to win. But off the court, when this basketball is over or at halftime, we're good friends. ”