The blind expansion of the home furnishing industry encounters a bottleneck period, and huge profits will become the past tense!

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Author : xk
Update time : 2020-11-23 14:04:00

 
A simple decorative earthenware pot with more than 100 yuan, an antique phone with more than 1,000 yuan... For home accessories, many citizens still give the impression of "sky price", and often hear some businesses reveal that home furnishing profits can reach up to 500%. "Even if there is such a huge profit, it is before." Industry insiders said. According to reports, in the past two years, the home furnishing industry has expanded rapidly, some giants have entered, and other home furnishing stores have expanded. This blind expansion has finally caused the furnishing industry to encounter a development bottleneck period and a decline in business volume. "Under such circumstances, low-profit operations have become The trend of the home market."


A: The huge profits of the home furnishing industry will become "past tense".

"The cost of decorating the house is really huge. An ordinary ornament costs five to six hundred yuan, and a soft cushion for a sofa costs more than 100 yuan. For those large items, let alone, they are quite a few. Thousand yuan." Xiao Huang, who was about to prepare for the renovation, heard such an answer when he asked his colleague for advice.

As for the home furnishing industry, if there is no new house decoration, citizens will generally not pay attention. When they pay attention, they are often instilled with the concept of profiteering. "I heard that the home furnishing industry is very dark and belongs to the profiteering industry."

Recently, a reporter visited several home furnishing stores and found that there are indeed many home furnishing products whose prices are on the high side. In a home furnishing store, the reporter saw that the price of a seemingly ordinary bed curtain reached more than 6,000 yuan.

In the revelations of some home furnishing shop owners, it is not difficult to find that many claim that home furnishing is very profitable. In an interview, a home furnishing shop owner said that the market price of many clay pots is around 150 yuan, and the true cost is less than 30 yuan. ! The cost of resin jewelry is even lower, and some 1 to 2 yuan is enough. Therefore, the profits of many retail stores are as high as 300% or even 500%.

The profit of up to 500% really makes consumers suspicious.

Regarding the impression of huge profits in the home furnishing industry, the relevant person in charge of a home furnishing network said that in fact, with the increase in the number of people engaged in the home furnishing industry in the past two years, the huge profits in the home furnishing industry do not exist on a large scale.

"I don't deny that in the past, including now, many home furnishing stores made more than 200% or even 500% profit. However, judging from the development of the home furnishing market in the past two years, this kind of profiteering situation has been rare." said the person in charge of Sunshine Home.com. , Sunshine Home Furnishing is engaged in the group buying business of home furnishings, and the prices of home furnishings purchased through group buying are relatively low.

According to reports, in the past, consumers like to compare, on the one hand, the products must be exquisite, and on the other hand, they have to save face when shopping. This consumption mentality has contributed to the wind of profiteering in the jewelry retail industry. At present, consumers have more choices when buying home furnishings, and they are all very rational, and businesses have no loopholes to exploit.



B: The expansion of the home furnishing industry encounters development bottlenecks.

Citizens busy with decoration will find that there are more and more home furnishing stores, whether they are new faces or old faces, and citizens have more and more choices. "Pick and choose, I don't know which one to choose," said Zhao Qiang, a citizen who is busy decorating.

The profit scale of the home furnishing industry continued to expand, and the growth rate of net profit remained high, forming a theoretical basis for the rapid expansion of the home furnishing industry. For a time, home furnishing stores also entered a period of rapid expansion.

According to data, in 2019, the profitability of the top 100 companies continued to maintain rapid growth. Among them, the average net profit of the top 100 home furnishing manufacturers reached 86 million yuan, a year-on-year increase of 59.84%. Although the growth rate has declined compared with the previous year, it is still at a high level in recent years; the average net profit of the top 100 home decoration companies exceeded 100 million yuan for the first time The mark reached 114 million yuan, a year-on-year increase of 70.62%, and the growth rate was 17 percentage points higher than the previous year. The rapid growth of the profit scale of the top 100 companies has laid a good foundation for the companies to continue to expand their business scale, improve their technical level, and achieve sustainable development in the future.

But at the same time, the home furnishing industry also has a negative undercurrent of generally lower operating efficiency and lower return on net assets. As we know from the interview, the core indicator for judging corporate profitability is the return on net assets. The return on net assets is based on the net profit rate, and comprehensively considers the impact of the company's operating efficiency and capital structure, and more reflects the company's overall profitability.

In 2019, the average return on net assets of the top 100 home furnishing companies declined. Among them, the return on net assets of the top 100 home manufacturing companies dropped from 11.46% in 2019 to 10.93%; the average net assets of the top 100 home decoration companies The rate of return dropped from 27.64% in the previous year to 22.44%, a drop of nearly 5 percentage points.

The comprehensive indicator of return on net assets is directly proportional to the net profit rate, asset turnover rate, and equity multiplier. In 2019, due to the rapid growth of the capital scale of the top 100 home manufacturing companies, the average asset turnover rate fell from 0.99 in 2019 to 0.89 in 2019, and the equity multiplier fell from 1.91 to 1.79. The average net profit margin did not rise. Changing the trend of declining return on net assets, the return on net assets fell by 0.53% year-on-year; for the top 100 home decoration companies, the average asset turnover rate fell from 1.94 in 2019 to 1.64, and the equity multiplier fell from 2.69 to 2.32. At the same time, the net profit margin also declined slightly, resulting in a sharp decline in the return on equity of 5.2 percentage points year-on-year.

The magnificence of the external profit landscape and the decline in the internal net rate of return have caused the fast-expanding home furnishing industry and newly opened home furnishing stores to also encounter development bottlenecks. The decline in real estate sales is bound to further see the demand for the home furnishing market. Market demand is expected to decline in varying degrees. The opening of a large number of new stores may not bring the same proportion of operating returns to the industry. These bottlenecks will be more obvious in the home furnishing market in the first quarter of 2020.



C: Low-profit operation becomes a development trend


There are more and more home furnishing stores, but at the same time, citizens will also find that the increase in home furnishing stores has also ignited the preferential strength of home furnishing sales. Many home furnishing stores will carry out some promotional activities, "especially during holidays, the promotion is even stronger. Big." Zhao Qiang said.

The interview learned that, in addition to the increase in the expansion of home furnishing stores, the increase in competition, the decline in transaction volume in the real estate industry affected by policies such as the "purchase restriction order" is also one of the reasons affecting the home furnishing industry. The development momentum of the home furnishing industry in China is still advancing with leaps and bounds, but while encountering these, the home furnishing industry is developing at a high speed while also reducing profits significantly."

Small profits but quick turnover is a keyword in the home furnishing industry in 2020. Both building materials companies and furniture companies are constantly expanding their business scale. At the same time, with the increase in operating costs of raw materials, logistics, and labor, home furnishings The industry has entered the era of the high cost of operating channels. In the era of high cost, lowering profits and increasing transaction volume is the most important.

According to reports, in the past two years, the rents of home furnishing stores have shown a continuous upward trend, and rents will increase every year. "Not only are rents rising, but there will also be some additional costs in stores that need to be shared by merchants, such as location fees and venue fees, Opening sponsorship fees, etc., all of which need to be borne by yourself." said the owner of a home furnishing store.

At the same time as the era of high cost is coming, it is not difficult to find that many home furnishing stores originally only have one brand, but suddenly they have added a few more. Under such circumstances, home furnishing stores have only one choice, which is to reduce profits to a minimum and increase sales.

"Consumers also understand that it's impossible to make wild demands. As long as we can make some money, we can sell it." said the owner of a home furnishing store.
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