Where is the future unicorn in the home industry? 4 big models have the best chance!

After combing through the history and exploring the intertwined relationship between capital and home, we are more interested in the "future." One of the points that most homeowners agree with is that the home industry has reached a new “turning point”. After this turning point, what kind of business has more development potential? From the perspective of investment, what are the characteristics of the “unicorn” in the future home industry?

In response to these problems, we have discussed the industry's brain-brain WeChat community, the home industry deep thinking group, and consulted experts and industry veterans in different fields. Based on this, we have summarized some opinions and opinions, although it may not be mature enough. And accurate, and also take the opportunity to discuss with readers and friends.

Starting from the pain point, how to break through the home industry?

Before discussing the future business opportunities of the home industry, the first thing to be clear is what is the pain point of the industry? What joints have not yet been opened, so that they can create great value?

From the perspective of the entire industry, the primary problem is to improve the efficiency of each link. From production to marketing, upstream and downstream collaboration and organizational efficiency. All business models must be built around “efficiency” – increasing productivity, reducing waste of resources, increasing per-capita productivity; improving channel efficiency, online, offline, retail department stores, hardcover houses, community stores, etc. Rich and efficient channels, reduce delivery costs; and the promotion of upstream and downstream and industrial division of labor, etc., otherwise the existing industry level will still be in place.

Not only efficiency, but also the ability to meet the mass consumption and quality needs - "high value and high cost performance" products are still very scarce. A large number of products in the market are products with similar design and lack of vitality. Behind this is the lack of product design capabilities and the slow response of manufacturing to changes in user demand.

If the pain points of the home industry are carefully counted, almost every link is not perfect. This has caused our overall level to stay at 60 or even fail, and this is the key breakthrough for the future growth of the home industry.

With more young, passionate and talented new generation of home buyers, with the spread of many new technologies and tools, and the stimulation of external factors such as real estate and environmental policies, cross-border looting The competitive pressure of food, etc., China's home furnishing industry is likely to usher in a new period of vitality in the next three to five years, and a number of truly outstanding enterprises will emerge, leading the industry.

So, what kind of characteristics should these enterprises representing the future of the industry have? How do they solve the existing pain points in the industry and better meet the needs of users?

We believe that the following models may change the entire home industry and create a number of influential companies or brands. Although they do not necessarily directly solve the above problems, they may eventually improve the overall efficiency of the home industry through the terminal's upstream or the improvement of the underlying technology.

First, seize the user from the product or service, reverse the channel and the transformation of production

Every industry has its long-standing "inertia". For the furniture industry, “inertia” means that after the factory launches a new product, it will first undergo a round of market trial sales (this process may be omitted), and then through the exhibition investment, dealers to distribute goods, and then gradually introduced to the market, this process may need One year.

In this process, not only is the product difficult to make timely improvements based on the feedback from the terminal, but the drawbacks of the channel are also exposed again.

For the home improvement industry, “inertia” means that the home improvement company acts as a “contractor” and makes as much money as possible from the owners through various additions, while designers, workers and owners are not satisfied. The new business model is not completely reversed C2B (consumer-to-business), but it must be the real pain point of returning to user demand.

On the one hand, what consumers need is always the “extreme” product – perhaps a product or service that is affordable or meets higher levels of demand. If independent designer brands can solve the problem of excessive price and experience less stores, they will also create new unique values.

In addition, Chun Ge, the founder of the Spring Festival, believes that the product direction based on better meeting the needs of users, such as the elderly furniture market brought about by aging, is also worthy of attention.

On the other hand, the design of products and services needs to jump out of the original inertia of the industry thinking, redesigning the production and sales processes from the very beginning of product and service creation. In the case that the old channel dividends have basically disappeared, tap more consumer-oriented ways to develop new “channel dividends”.

Whether it is to create a joint product with a global designer, or to raise money and sell products on the Xiaomi platform, it is a new attempt.

Second, enterprises with strong brand advantages and system combat capabilities

In the process of the home industry from decentralization to concentration, it is highly probable that “carrier-class” enterprises will emerge, and this trend is becoming more and more obvious.

The so-called aircraft carrier not only refers to its huge volume, but also has a complete "carrier battle group", which is to create a superior brand in each segment by satisfying the positioning of different user groups, and finally assembled under a group brand. This is completely different from the “big home” or “full house customization” of a brand that produces all products.

In the home industry of low-frequency consumption, it is extremely difficult to establish a “brand”. Consumers often think about finding a brand before the decoration, and the spread of social word-of-mouth is more difficult. Once such a brand is established through long-term marketing, it is equivalent to establishing a “moat” with deep barriers.

In fact, the process of building a strong brand is the process of effectively integrating industry resources and efficient internal management. In the home industry, we can see that some brands are forming such strong brand power, such as Qumei Home, Gujia Home, Zhihua Shi, etc. Of course, they are also starting from one segment and gradually growing. .

In the initial stage of the investment boom in the home furnishing industry, capital often only looks at the novelty of the model. In fact, most new-type companies lack customer access points and profitability difficulties. In contrast, a mature company with a well-established brand system that accurately covers the target user group will be more sought-after in the future.

Third, companies or individuals that can significantly improve the efficiency of existing supply chains

When it comes to the “supply chain”, the “packaged supply chain” including building materials, furniture, and soft clothing has become a hot topic in the industry. However, in this category, it is not easy to be excellent because of the many products, processes, and roles involved.

In the September issue of the Chinese version of Today's Furniture, we have discussed that the whole business as a business model is not new, the key is whether it can bring the efficiency of the entire supply chain of the home.

In fact, we are more inclined to believe that those companies that have the ability to design home furnishings and can organize the elements from the top-level design will have a higher integration success rate for such supply chains.

From the point of view of user needs, from the acquisition of model houses (or full-loading houses that occupy the mainstream trend in the future), from the design of the apartment to the hard-packing and soft-packing, it can provide efficient and cost-effective solutions. The enterprise is actually a successful home improvement supply chain integrator.

This integrated role may be a home brand that provides overall service, or a home store with integrated capabilities, or a strong home dealer with design, construction, soft and hard capabilities.

Fourth, to provide the industry with more advanced "infrastructure", especially the new underlying technology

One of the important reasons for the inefficiency of the home industry is the weakness of the “infrastructure”. When Germany began to enter Industry 4.0, our manufacturing 2.0 has not yet been fully completed.

For the home industry, which is close to 4 trillion in output value, providing a more advanced and efficient infrastructure, especially the new underlying technology, will also create a number of new outstanding enterprises. At this stage, the new technology is mainly used to improve the user experience, such as cloud design, VR (virtual reality), etc., to improve the order success rate of terminal stores, to achieve "what you see is what you get" in home consumption.

But this is only the application of new technology in terminal marketing, and the improvement of industrial efficiency is far from being achieved. New infrastructure or technology should start with a significant increase in the efficiency of the home furnishing industry, using industrial thinking to transform the home improvement industry.

As Gao Hongqing, managing partner of Lianchuang Yongxuan, said, “It’s not enough to just stay at the front end to get the technical changes in customer marketing. The future of the home improvement industry belongs to those companies with more vision and vision.”

The above limited inventory is far from summarizing or predicting new opportunities in the future home industry. With the continuous explosion of technology, new thinking and new ideas brought by cross-border, more importantly, the continuous innovation of a new generation of home people, the future home industry will have more imagination and space to make this traditional field glow. New life.