Home building materials store popular cross-border large home model will face the test

On September 6th, the home chain brand actually announced that it would change the name of “Ouhua Shangmei Hotel Supplies Market”, which was taken over from the Oriental Homeland, to “Current Shangwu Hotel Supplies City”, which is operated by Shangwu Company management. It is understood that the hotel supplies the city mainly engaged in kitchen equipment, ceramic tableware, bedding, lobby supplies, cleaning supplies, hotel furniture and other hotel supplies.

The Real House announced that its involvement in the hotel supplies market is uncovering its future “big home” strategy. Coincidentally, in April this year, another home chain brand, Red Star Macalline Group, announced its entry into commercial real estate, creating a comprehensive shopping mall brand called “Aegean Sea” that integrates shopping, dining, entertainment and leisure.

The two domestic home building materials brands play the "cross-border" and extend the business beyond the home, reflecting the bleak market prospects of China's home building materials industry. Under the background of the withdrawal of foreign building materials market and the bleak operation of local stores, transformation and development is becoming the only way out for home building materials.

However, whether the “big home” model that extends the business beyond the home can gain market recognition is a big question mark hanging in the minds of corporate decision makers.

Transformation is imminent

A few years ago, one-third of home building materials malls were profitable, one-third were capital-guaranteed, and one-third were loss-making. This year, an estimated nine out of ten was a loss. In this context, the transformation of home stores is imperative.

"At the moment, the golden period of 'Golden September and Silver 10' has arrived, but the sales in September are in line with the sales in July as the off-season, which indicates that the market situation is very bad this year. Changzhou is like this, and the country is also the same." Expert and Changzhou Municipal Government procurement review expert Liu Wei told the "China Business News" reporter.

From the national building materials and household prosperity index (BHI), due to the impact of real estate control policies, China's BHI index fell to the lowest point in three years in February. Since March, the downturn of BHI has gradually eased, and it has rebounded sharply in April. However, compared with the same period last year, BHI is still in a state of decline.

From the enterprise level, Home Depot, a home-based building materials giant from the United States, left the Chinese market at the end of last year after six years of hard work in China. B&Q, a subsidiary of the British Kingfisher Group, was recently challenged by labor disputes. According to a household industry statistics, since August 2011, 12 home building materials stores in Beijing have officially closed, and in the past six months, there have been eight closed doors. In addition, there are five malls that are preparing to move or withdraw.

The dilemma of the home building materials industry is closely related to the current economic environment. “The main reasons for the decline in home building materials are three aspects: the domestic macroeconomic trend is still sluggish, the purchasing power of consumers is shrinking, the market demand is weakening; the real estate is strictly regulated by the state, and the home building materials industry is the downstream industry of real estate, which is subject to greater impact; And the continuous improvement of labor costs has greatly squeezed its profit margin. In the second half of this year, the trend of furniture and building materials industry needs to be determined according to the macroeconomic trend, and the recovery may be small." Chen Zhangli, a researcher in the building materials industry of CIC, told reporters.

"In fact, since 2008, China's home building materials market has shown a downward trend. From the total amount, the demand for household building materials is slowly rising. However, due to over-investment in the past few years, overcapacity and disorderly competition, In the end, every individual enterprise is affected. Take the wallpaper as an example, according to the market demand, there are no more than ten new production lines every year, but the most crazy production line is two or three hundred in a year.” Liu Wei Said.

At present, some upstream small and medium-sized building materials manufacturers have already experienced bankruptcy due to lack of expectations of the market and weak anti-risk ability. The dealers of home building materials are also facing the risk of bankruptcy. If two-thirds of the merchants in the home building materials store face bankruptcy, the entire home furnishing industry will face a wave of bankruptcy from upstream to downstream.

From the perspective of the development of the industry, professional home building chain stores also seem to have never entered the main options of consumers. “While the building materials and home furnishing industry has entered the chain business model early, the market is still dominated by the traditional building materials market. Consumers have not cultivated the habit of buying in chain stores like supermarkets and other formats. Even if there are, some of them go to these. The store checked the model and asked the price, and eventually returned to the traditional channels such as the building materials market, agency stores and other purchases." Chain industry observer Chen Yuefeng told reporters.

On the other hand, the impact of e-commerce has a huge impact on traditional home building materials stores. "In the Internet age, the original channel barriers have been broken, and traditional enterprises must learn to transform. Today, if you don't change yourself, tomorrow will be replaced." On September 17th, the "2013 China Top Ten Economic Trends" event was held. Deng Qingxu, deputy editor-in-chief of Sina.com.

“A few years ago, one-third of home building materials malls were profitable, one-third were capital-guaranteed, and one-third were loss-making. This year, an estimated nine out of ten is a loss. In this context, The transformation of home stores is imperative." Liu Wei told reporters.

Mode doubt

Although the concept of "big home" has been heated up at the moment, in the eyes of some insiders, whether it can become a successful transformation path for future home stores has to be tested.

For the traditional home building materials store, the home business as the core to extend outward, the development of the "big home" model is the main way out for the transformation of home building materials stores.

"The establishment of the Shangwu Hotel Supplies City is a further embodiment of the company's 'big home' plan." The relevant person in charge of the home said that in the context of the Beijing home building materials market and the homogenization competition, the hotel supplies market It will be a good complement to the original home business of the company.

"In recent years, with the economic development, the number of businesses and tourists has soared, stimulating the demand for hotel supplies market is growing, but the whole industry is still in its infancy, and we are very optimistic about the prospects of the hotel supplies market." Shang Shuyan, general manager of Supplies Co., Ltd. said that at the beginning of next year, Shangwu will carry out a comprehensive renovation and upgrade of the entire store.

At that time, Shangwu will re-plan the area of ​​more than 30,000 square meters and introduce famous domestic and international hotel products brands. The business scope covers kitchen equipment, ceramic tableware, bedding, lobby supplies, cleaning products, hotel furniture and other hotels. Supplies to meet the needs of hotels, hotels, restaurants, clubs, institutions, and home use.

The Red Star Macalline breaks the single category of the original home building materials and develops a comprehensive shopping mall integrating shopping, dining, entertainment and leisure.

In addition, good luck from Guangzhou, Hongshuwan, Baishi home and other home improvement, home furnishings products, rich product lines, also played the concept of "big home."

Although the concept of "big home" has been heated up at the moment, in the eyes of some insiders, whether it can become a successful transformation path for future home stores has to be tested.

“'Large home' is just a concept, not a business model. Like Red Star Macalline, doing a comprehensive shopping mall is a concept of 'big home', such as the home of the hotel. 'Large home'. Although they belong to the category of 'big homes', the business models of the two are far apart," an industry observer said.

In addition, from the perspective of site selection, the transformation of the traditional home store “big home” will certainly rely on the original network resources. The home building materials market is generally located in the suburbs of the city, and such a geographical location may not be suitable for the development of new businesses.

Liu Wei said that a mature home building materials store should be transformed into a new format that consumers do not understand, which requires a process of consumer habits and cognition. Once there is any problem with this process, it will definitely affect its brand image.