More than 7 million orders, a year revenue of 1 billion! The large home service market is full of hope

Dacai Research, Chief Analyst: Deng Chaoming, Pan Home Furnishing Boss Business Internal Reference, Manager's Daily Reading, Business Staff of Front-line Personnel, to create an influential large home furnishing construction and decoration research institution, professional evaluation and communication center.

What is the current situation of the home service market based on installation, repair, maintenance, etc.? How much room is there for growth? How to seize the opportunity?

In response to these problems, recently, Deng Chaoming, founder and chief analyst of Dacai Research, made a preliminary analysis of the development and trend of the home service platform in an interview with the top news of Henan Daily.

Key takeaways include:

The first is to recognize the positive role of this industry, which is valuable to merchants, technicians, consumers and other parties, and has contributed to the gradual expansion and maturity of the home service industry.

Second, it is believed that the home service market based on installation, repair, maintenance, etc., has outstanding growth space. With the increase in old neighborhoods, the demand for this kind of home service will continue to increase.

On this basis, this article synthesizes more abundant information to interpret the home service market. Let's start with the specific company.

In this track, there are two companies that have attracted widespread attention since 2024:

One is Woodpecker Maintenance, which submitted an IPO listing application in early 2024, which can be called a stone that stirred up a thousand waves.

The other is Luban Daojia, which has raised a considerable amount of investment, injecting new momentum into the investment and financing of the entire home furnishing market, allowing people to see the potential of the platform and the imagination of the home service market segment.

In April, the company announced the completion of hundreds of millions of yuan in Series B financing, led by Sinovation Works, and the old shareholder Binfu Capital over-invested.

It is understood that Luban Daojia focuses on the business of the large home aftermarket service platform, integrating the technicians of the home building materials and household appliances industry at one end, and providing delivery and installation services for consumers; At one end, it integrates merchants and individual users, and selects suitable technicians on the platform of Luban Daojia to achieve the matching of supply and demand.

According to public information, Luban Daojia claims to have gathered more than 3 million professional blue-collar masters across the country to help home furnishing companies fulfill their contracts in more than 99% of the country, covering locks, lighting, drying racks, bathrooms, curtains, furniture, home appliances and many other categories, and the service has penetrated more than 30 kilometers into the county.

According to information from the official WeChat, Luban Daojia has become the head platform of the comprehensive track of the large home aftermarket, with a customer retention rate of up to 90%, an amount retention rate of more than 100%, and a compound growth rate of more than 60% for many years.

The partners are constantly expanding, and Luban Daojia has become a designated national after-sales service platform for Taobao, Tmall, JD.com, Pinduoduo, Douyin, SF, Debang, and Leap Express; It has established strategic cooperative relations with Kadis, Good Wife, Opai Home, Aiguole, Lin's Wood, Dongpeng Sanitary Ware, Opple Lighting and other enterprises.

This kind of strength foundation naturally constitutes the key reason why Luban Daojia has won the favor of investment institutions.

In an interview with the top news, Deng Chaoming, chief analyst of Dacai Research, believes that in the current home service platform, Luban Daojia is a relatively high visibility and market penetration, and a relatively mature operation system.

It is very important that Luban Daojia has successfully raised funds before, and has the blessing of well-known investment institutions, which has created conditions for continuing to obtain new investment.

For example, in 2021, there was public information mentioning that Luban Daojia announced the completion of nearly 100 million yuan in Series A financing, led by Binfu Capital, with Cloudway Capital as the exclusive financial advisor.

It cannot be ignored that the value of the home service platform in the three major groups of merchants, technicians and users is emerging, the market is gradually maturing, and the growth space is worth looking forward to. As a head platform, it is relatively easy to be favored.

Speaking of woodpecker maintenance, in 2023, Dazai Research noticed that a large number of woodpecker maintenance advertisements appeared in elevator advertisements in many communities.

More notably, in January 2024, Woodpecker Maintenance International Co., Ltd. submitted an application for listing on the main board of the Hong Kong Stock Exchange, with CICC and Zhongtai International as its joint sponsors.

This move has pushed woodpecker maintenance to the forefront of the industry, allowing people to see the potential of the home service platform, and also allowing the outside world to realize that the original home maintenance field can actually run out of the potential players of the market

According to the prospectus information, the outside world initially learned about the performance of woodpecker maintenance, which to a certain extent also reflects the strength and scale of the head home service platform.

It is understood that in 2021, 2022 and the first nine months of 2023, the company's total revenue will be 401 million yuan, 595 million yuan and 735 million yuan respectively, with a pretty growth rate.

The gross profit margin was also very impressive, with gross profit of 3.23 yuan, 484 million yuan and 623 million yuan respectively, and gross profit margin of 80.5%, 81.4% and 84.8% respectively.

The company's home furnishing services are also wider, mainly home repair, including home appliance maintenance, home appliance cleaning, home appliance installation, water and electricity maintenance, pipe dredging, lock picking and replacement, waterproof leakage repair, wall renovation, etc., it is said that there are more than 300 categories.

It is worth noting that Woodpecker Maintenance has disclosed a variety of business measures, such as:

1. Developed the "Tiangong" system, which integrates the online and offline operations of hundreds of service categories in the entire service process to form a unique SaaP model; Standardize service delivery.

2. Provide regular skill training and knowledge update by training and establishing a team of engineers in the field of home maintenance. More than 400 engineer stations have been established nationwide for professional training, technical and supply chain support.

3. Provide career development opportunities for engineers and attract more outstanding talents to join by improving the dispatch algorithm, optimizing the engineer skill rating system, and refining the service fee structure.

After years of hard work, the number of users and engineers on the Woodpecker platform has formed a positive cycle and continues to expand, with the average monthly active engineers increasing by 62.8% from 7,092 in 2021 to 11,500 in 2022. In the first nine months of 2023, there were 18,400 monthly active engineers.

The number of service orders increased from approximately 4.3 million in 2021 to approximately 6 million in 2022 and continued to grow in 2023, with the number of platform orders exceeding 7 million for the nine months ended September 30, 2023, with a total transaction value of approximately RMB1.8 billion, representing an increase of 57.8% and 65.5% respectively over the same period in 2022.

In addition, the average transaction value per order also increased from $231.8 in 2021 to $243.5 in 2022, and further increased to $254.4 in the first nine months of 2023.

Judging from the data of woodpecker maintenance alone, the results are undoubtedly quite significant, from 4.3 million orders per year to 7 million orders in three quarters, which is a big leap.

What's more, the activity of engineers is very high, which ensures that the needs of users are met in a timely manner.

Looking at the entire home service market, the above two platforms only occupy a certain share.

According to the observation of Dacai Research, there are several domestic home service platforms, which are active in the front line of the market, and strive to lead in terms of business scale, technician scale, order volume, service quality, etc., including Master Wan, Qibing Daojia, Anbangke, Craftsman Duoduo, etc.

There is little difference between the modes between the platforms, and they all connect the master and the user, providing installation, maintenance, measurement, distribution and other related services.

Among them, Qibing Daojia, positioning the national home after-sales service platform, providing installation, distribution, maintenance, measurement and other services, claiming to have 3 million + masters, covering 99% of the country's areas to villages and towns, serving 1.4 million +, covering furniture, bathrooms, lamps, locks, curtains, wallpaper murals, water purifiers, drying racks, doors and windows, home appliances, TV projection, shower rooms, water heaters, fitness equipment, commercial kitchen appliances and other categories.

Its cooperative merchants show Faenza Sanitary Ware, Good Wife, Hengjie, Hunter Window Decorations, Wrigley Bathroom Tiles, Jiumu, NVC Lighting, Rome Wallpaper, Meixin, Opple Lighting, Samsung Smart Lock, TATA Wooden Door, TOTO, etc.

Jiang Duoduo has received investment from Alibaba, positioning itself as an Internet home after-sales life service platform, covering furniture, bathroom, lamps, drying racks, smart locks, decorative paintings, bath bombs, flooring and other categories.

The platform will provide services such as guarantee, master certification assessment, skill training, etc., and the cooperative brands include Xintli Lighting, Panasonic, Langjing Sanitary Ware, Kabei, Orusa, Changhong, Emperor Sanitary Ware, Beauty, Midea, Kingdom Lighting, Moon Shadow Lighting, etc.

Dazai Research believes that the emergence of these home service platforms has had at least three impacts on the industry:

(1) It provides convenience for merchants and users to hire technicians, and promotes the ability of technicians to improve their abilities through training, user evaluation, etc., and further improves the user experience of installation and maintenance.

(2) It opens up a new channel for technicians to obtain orders, helping the blue-collar class to upgrade their skills and increase their income.

(3) It has contributed to the gradual expansion and maturity of the sub-industry of home service.

It is the existence and release of the above values that make the consumption foundation of the home service industry solid, and its growth prospects are highly anticipated.

1. Benefiting from the scale advantage effect and the siphon effect of the Internet, the head platform will absorb users, engineers and other resources on the largest scale, boost the expansion of the platform, and then enhance the attractiveness of merchants.

2. With the help of digital tools, we will continuously optimize the efficiency of dispatching orders, empower engineers, and create a better experience for customers, which will help establish a growth model and promote high frequency consumption.

3. From the perspective of the consumer side, the rigid demand attribute of home furnishing services is still relatively strong, with a variety of services, stable demand, and a promising growth space.

4. As the e-commerce penetration rate of home furnishing, building materials and home appliances continues to increase, the demand for large home furnishing services will increase.

However, the home service platform still faces some difficulties, and there is still a lot of room for improvement in market penetration:

On the one hand, the popularity rate of the user side is not very high, and many users have not yet registered as members of the platform, nor have they developed the habit of looking for technicians on the platform, and they are still in their infancy.

Second, the stickiness of cooperation with merchants needs to be enhanced, there are still a large number of enterprises and stores that have not found technicians through the home service platform, and it is necessary to further increase market development efforts and improve the cooperation mechanism to enhance the value of cooperation.

So, how big is the market space for large home services?

Some institutions believe that 600 billion or 700 billion, accurate data is naturally difficult to deduce, but through the current platform order volume and growth, the 100 billion market should be no problem, the key is that there is still a broad growth space in the future.

The current home service model is still in a relatively fragmented stage, and if the platform wants to seize the opportunity, Dazai Research believes that it needs to start in at least two aspects:

The first is to attract enough excellent technicians to settle in and enhance their activity, which requires an incentive mechanism and order resources to attract.

Second, it is not only necessary to expand and enhance the cooperation of merchants and attract more merchants to screen technicians through the platform, but also to gain popularity at the retail end, gain the favor of owners, and cultivate the habit of owners looking for technicians through the platform.

The increase in retail orders from owners, coupled with the fact that a large number of masters have gathered on the platform, will drive the activity of excellent masters, and can also enhance the use intention of owners, thus forming a virtuous circle.