Capital entry is a boost and a challenge

The big home industry is undergoing a major change. New species have seized the highlands, outdated production capacity has withdrawn from the market, living homes, smart homes, and custom homes have become popular. The industrial upgrading results triggered by consumption upgrades have begun to appear. When capital began to pay attention to this virgin land, new technologies, new models, and new products instantly flooded into the market. Capital incorporation accelerated the pace of upgrading the big home industry, but it also induced the so-called “innovation” of barbaric growth, which was unstable and determined. Insufficient companies may be caught in the whirlpool of capital games.

   From 2005, MUJI entered the Chinese market, and the concept of living and home began to be accepted by domestic consumers. As the most intuitive result of the consumption upgrade, the living home has been in the limelight for nearly two years. Not only has a number of living and home brands that emphasize the quality of home and life aesthetics quickly take root, Netease strictly selects, Xiaomi has products, Taobao heart selection and other giants join, There are Zara, HM and other clothing brands across the border to grab food, living and home enterprises are enjoying huge challenges while enjoying the consumption bonus.

  Innovation helps industry upgrade, capital game induces melee risk
   “Why is the profitable company worthless, and the unprofitable company is highly valued?” When Wei Junyi raised this question in an industry forum, it caused many people in the industry to resonate. This is a strange phenomenon that has been formed since capital entered the home industry, and it has also plagued a group of business managers. Many companies that have been deeply involved in the household sector for more than ten or twenty years, with complete profit models and stable sales channels, are considered to be lagging behind. Emerging companies that emphasize model innovation, technological innovation, and management innovation have attracted a lot of capital attention without their profitability.
   Like all industries, the Internet and informationization of the huge home industry is an inevitable era, and any industry will have such problems during the transition period. Wei Junyi believes that embracing change Keeping pace is what every business must do. But change does not mean abandoning the fundamentals. Whether it is new consumption, new retail or smart home, you should not forget the attributes of the home itself, heavy products, heavy operations, heavy service, and heavy supply chain, because its essence is the industry that serves people. Only by closely following the needs of people, on this basis, new technologies and new models will be grafted into them, and the righteousness will be eliminated. At this stage, capital has just paid attention to the blue ocean of home. There may be some institutions that have a gambling mentality and pay too much attention to various innovations. However, investors have been very good at how to find good investment targets. When they have a good understanding of the home industry, those balloons that are big by capital will gradually shrink. Capital entry will help transform and upgrade the home furnishing industry, but it will also bring some problems to the unfounded enterprises:
  1. The pace of consumption upgrade conversion in the home industry is overestimated. Home is a slow industry that accumulates. No matter what new technologies or new models are applied, it is impossible to achieve double profit growth within one year. Short-term arbitrage is not high in this industry. Play capital games. Aggravate the speed of the disappearance of new businesses.
  2. Excessive belief in innovative models. There is no model in the market that can subvert everything. It should not be overly obsessed with new technologies, new models, etc. They are not the essence of the home industry, but a way of diversifying the development of the home industry.
  3. Some companies overestimate the ability to expand in the future. There are a lot of behaviors in the home industry to harvest franchisees and harvest weak suppliers. This way allows companies to grow rapidly in a short period of time, but the future is unsustainable. Enterprises should not use innovation as a tool for money.
   “The valuation of unprofitable companies is very high. In fact, it reveals a dangerous signal. The unrealistic confidence given by capital may cause those companies without foundations to fall into crisis.” Wei Junyi thinks The home industry is unlikely to undergo fissile growth like the sharing economy, social e-commerce and other industries. Its transformation and upgrading will be a continuous process, which will steadily increase with the step-by-step pace of consumption upgrading. In the future, consumption as a family scene will become more and more subdivided and more comprehensive. Living home enterprises like natural waking homes will become more and stronger as consumers demand, and continue to harvest household consumption dividends. This process will not be as fast as the market expects, but it will last longer than expected, and the ability to continue to meet market demand is not a simple mode replication, which requires a more solid and stable integrated output capability.
  The future of living and home will grow hundreds of billions of unicorn
   the information asymmetry between supply and demand in the home industry has a long history, many companies use this asymmetric acquisition interest. However, a generation born on the Internet has become the main force in the market. This asymmetry effect is rapidly weakening. The new generation of consumers are more aware of their own demands, and there are more channels to obtain information. The era of making money is over. In addition, domestic living homes started late. After MUJI entered China in 2005, some people noticed the potential of this market. In countries such as Europe, the United States and Japan, where the living and home market has matured, home furnishing companies rely on the integration of global quality products to meet the needs of upgraded consumers. At present, China’s consumption upgrading momentum is obvious, but the local living home has not yet formed the awareness of introducing the world’s high-quality production capacity to China. Most of them are trapped in integrating local supply chains and using low-end excess capacity to fight the world. This is obviously related to consumption upgrading. The overall trend does not match.
  Wei Junyi believes that a good life home business should be based on the local, against the world.
   First of all, living home will be a big enough market in the future, and thisThe enterprises in a market should also be large enough to grow a lot of billions and billions of companies in China’s living and home market.
  Secondly, the unicorn company in the living and home industry must have been immersed in the industry for many years, accumulated for a long time, with a complete profit model, product development and iteration capabilities, supply chain integration capabilities and home retail experience.
   Again, living and living are on the one hand the product of consumption upgrading, on the other hand, it is also a concentrated expression of the national way of life, so it has obvious national boundaries, has a strong nationality and regionality, so copy and copy The strategy of successful foreign companies is not feasible. It is necessary to conduct in-depth research on the domestic market, be good at insight into market demand, and grasp consumer preferences.
   Finally, we can configure the highest quality product matrix, which can integrate global supply chain, configure high-quality resources, and have original IP to meet individualized market demand. Product matrix configuration capability is the real hard power of an enterprise. The more accurate, efficient, and gradual the configuration, the better the user experience, and the lower the cost of the enterprise.
(provided by Shenyang Building Materials Network) <


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