Stimulating consumption potential has been one of the main themes of China's economy in the past two years. As one of the "four King Kongs" of consumption alongside automobiles, home appliances and catering, household consumption has also become a key area for this year's policy to promote the recovery and expansion of consumption. So, what are the characteristics of the development of household consumption at this stage? What are the main changes in the hot spots of household consumption and the supply mode of the industry? What is the future trend of household consumption? What is the role of the national circulation stores represented by the home?
In order to comprehensively analyze the characteristics of China's home furnishing consumption market and predict the trend and development trend of home furnishing consumption, under the guidance of the Circulation Industry Promotion Center of the Ministry of Commerce, the China Furniture Decoration Industry Chamber of Commerce, the Home Furnishing Industry and iResearch Consulting jointly compiled the "2024 China Home Furnishing Market Consumption Insights", which was officially released on April 25, 2024, in response to the above topics.
In 2027, it is expected to exceed 5.3 trillion yuan, and pan-household consumption shows strong growth resilience
The "2024 China Home Furnishing Market Consumption Insights" report (hereinafter referred to as the "Report") focuses on China's home furnishing industry, on the basis of fully investigating the market background and consumption status, starting from the two dimensions of home consumption supply side and consumer demand side, in-depth exploration of the core contact point of home consumption in the new era and the business status and development path of the industry supply side, and the last chapter of the report predicts the development opportunities by looking forward to the future trend of home consumption.
According to the report's statistics on the scale of the home consumption market, the omni-channel sales of pan-home furnishing will reach 4.6 trillion yuan in 2023 and are expected to exceed 5.3 trillion yuan in 2027, showing strong growth resilience driven by the release of demand for stock housing and the innovation of smart home categories.
This judgment is based on a reasonable prediction based on the insight into the background and current situation of home consumption development: on the policy side, in recent years, real estate incentives and policies to promote home consumption have been carried out simultaneously to promote the healthy development of the home furnishing industry; on the industrial side, the improvement demand for growth under the stock market provides new momentum for the market; on the demand side, the urbanization rate in areas with low economic development level has a good growth trend, and some incremental housing demand has not yet been released. At the same time, the growth of demand for second-hand housing and renovation of old houses has promoted the home improvement and home furnishing market to gradually enter the era of stock.
Today's consumers are increasingly willing to pay for a high-quality living environment. When users tend to be younger, the channels are also diversified. In addition, one-stop service has become the choice of mainstream consumers of home decoration and home furnishing, and the whole decoration model is promising, and the growth potential of the home consumption market has been further stimulated.
Core channel providers lead the industry to innovate and develop the business reform behind the "hole".
Based on the changes in terminal consumer demand, the home furnishing market has shown strong development resilience, and the innovation of the supply side also needs to change according to the situation. The report analyzes the supply side of household consumption and shows that the home industry chain and consumption link are long and complex, and the traffic fragmentation is very prominent. At this time, channel providers that are closer to consumers and have more ability to leverage traffic aggregation to empower the whole industry chain occupy the core right to speak.
Taking the national chain stores represented by the home as an example, it is leading the industry's operational capabilities and digital capabilities to better adapt to the new "online + offline" consumption model, improve the overall operational efficiency of the store, and bring greater empowerment to merchants and promote market share increase. The advantage of the home is that it is committed to transforming and upgrading itself into a digital home improvement and home furnishing industry service platform, and continues to consolidate its leading position in the industry through the expansion of shopping malls, international layout, etc., and builds an organic industrial ecology to cover the complete consumption chain of home furnishing.
On the one hand, from the perspective of users, the report analyzes the whole process of consumption motivation, consumption and stock replacement demand, pre-sales channel understanding, consumption decision-making path, delivery and after-sales from the perspective of users. The most obvious performance characteristics are: consumers have more and more diversified channels to obtain information, the decision-making cycle has become longer, the participation is getting higher and higher, and the requirements for product green, intelligent, personalized and beautiful products are also constantly improving. It is worth noting that although diversified products, humanized services, and intelligent real-world experience have gradually improved consumers' satisfaction with home furnishing products, the corresponding pain points have not been well solved, such as the complex information of the home improvement and home furnishing industry, professional barriers and potential rework costs, which have led to a great reduction in consumer purchase efficiency, and the industry's after-sales service needs to further evolve in the direction of standardization and long cycle.
From the perspective of operation, professional and differentiated services do not fully meet the growing consumer demand, and home furnishing stores covering the whole process from purchase to after-sales highlight their advantages. The home improvement and home furnishing digital industry service platform built by the home furnishing - Dongwo provides a typical benchmark for the industry.
Dongwo was officially launched in June 2021, and by the end of 2023, it has covered 900 stores in 190 cities, including Chongqing, Chengdu, Wuhan, Xi'an, Zhengzhou, etc., with a cumulative number of registered users exceeding 25 million and 100,000 stores. With the widespread penetration, the Dongwo platform has made great efforts to integrate online and offline scenarios, and its net sales have increased significantly, from 34.6 billion yuan in 2022 to 97.4 billion yuan in 2023, an increase of 182%. Behind the accelerated development, it reflects the reshaping of the new business model of the house.
The rapid development of Dongwo has the significance of the new era, it is a digital product created by the house, and it is also an important support for the digital transformation of the house, which provides a solid foundation for the company to build a new model of home furnishing retail integrating "sky net" and "ground network". In addition, on the supply side, Dongwo can enhance the core capabilities of the whole marketing link and the whole cycle of members in the pan-home industry, and on the demand side, Dongwo provides consumer customers with a full-link pan-home consumption closed-loop of online consultation, in-store experience, out-of-store decision-making, payment transactions, and after-sales service. On the user side, Dongwo has opened up the data of the whole industry chain of factories, dealers, stores, customers, logistics, and home services, built a traffic platform for the home furnishing industry, realized the digitization of the whole process of operation and management of physical home furnishing stores, and provided "multi-port, multi-scene, and customized" services, comprehensively improving the efficiency of the industry, and finally greatly optimizing the consumer shopping experience.
It is worth mentioning that in March 2024, the first step of the internationalization strategy of the home will be implemented in Phnom Penh, the capital of Cambodia, and Dongwo will also go abroad to penetrate into the field of home furnishing cross-border e-commerce, helping home furnishing companies to rapidly expand overseas markets, demonstrating the strong vitality of the digital upgrading of China's home furnishing industry.
The four major trends of home consumption are highlighted Actually Home: Efficiently link supply and demand to create a benchmark for industry innovation
In the context of diversified market competition and increasingly strong demand drives, the home furnishing industry service platform participated in the compilation of the "2024 China Home Furnishing Market Consumption Insights" on behalf of the company, and the Circulation Industry Promotion Center of the Ministry of Commerce and the All-Union Furniture Decoration Industry Chamber of Commerce provided professional guidance. It has new reference significance to promote the healthy development and transformation and upgrading of the home furnishing industry.
Looking forward to the future trend of household consumption, the report concludes with four relevant interpretations:
●Promote the development of the industry with high-quality, green, personalized, intelligent and international household products under the advanced consumer demand;
●Home furnishing retailers extend product categories and service formats, and industry concentration is expected to be further improved;
●Home furnishing stores are closely connected with merchants through value sharing to improve the operation capacity of the whole business;
●The digital and intelligent transformation of home furnishing retailers empowers the entire industry chain and improves the added value of retail by relying on operational capabilities.
Based on the macro insight into China's home furnishing consumer market, as one of the co-editors, the company showed the business results and development status of the Dongwo service platform in the report, which made a demonstration for the further exploration of the home furnishing industry. Consumer-centric, through the combination of platform services and linear services, as well as the combination of online and offline, the integration of "big home" and "big consumption", optimize the link between the industry and users, make the delivery of products and services more high-quality and efficient, and continue to highlight the advantages and responsibilities in the competition in the same industry, so as to guide more enterprises in the home furnishing industry to think deeply in the direction of systematization and digital intelligence.
In the future, the long-term sustainable development of the home furnishing industry will focus on optimizing the business model, providing high-quality products and services, and strengthening the industrial foundation to meet the personalized pursuit of consumers with different needs for a better lifestyle. With the Ministry of Commerce and other government departments actively guiding and promoting the release of household consumption policies, this will further break through the transaction barriers between supply and demand, and the further release of the consumption potential of the home market is worth looking forward to.