From the "golden age" to the "Silver Age", customized home enterprises must complete three major transformation!
In the first three quarters of 2018, the growth of customization industry decreased significantly. The average growth rate of the top six listed customized furniture enterprises decreased to 20.5%, down 40%; Since the fourth quarter of 2018, the downward trend has become more and more intense. In the first quarter of 2019, the average growth rate of the nine listed customized enterprises has dropped sharply to 9.33%.
The P / E ratio of listed customized enterprises has been falling along with the overall downward trend of China's capital market. On February 1, 2019, the average p / E ratio of listed customized enterprises is 20 times, which is only 44.44% before 2018. What are the main reasons for the decline of growth rate and P / E ratio of listed customized enterprises? Is it a cyclical fluctuation accompanied by the overall decline of macro-economy and capital market?
The fundamental reason is the great changes in the market
Our analysis shows that the decline is certainly related to the downward cycle of macro-economy and capital market, but the deep-seated reason is that the industrial structural factors such as supply-demand relationship, entry threshold and consumer demand have changed from quantitative to qualitative, and the industry has entered the "Silver Age" in an all-round way. Specifically:
The fundamental change on the supply side is "blue ocean to Red Sea".
Under the background of rapid diffusion of customized technology, downward learning curve of the industry as a whole, and lower entry threshold, industries such as real estate, home decoration, finished furniture, sanitary ware, ceramics and other industries have expanded product lines, business lines or set up subsidiaries to lay out customized furniture business. Meanwhile, customized home furnishing enterprises have been listed in recent years, with concentrated release of production capacity and intensified competition.
The fundamental changes on the demand side are "consumption upgrading, stratification" and "real estate slowdown + hardbound housing policy".
After ten years of rapid growth, the core demands of consumers have been upgraded from functional satisfaction to multi-level, high-level and comprehensive value-oriented demands, such as time-saving, worry saving, labor-saving and taste saving. At the same time, as the climax of China's real estate construction has passed (the year-on-year growth rate of commercial housing sales area decreased from 24.3% in 2016 to 7.9% in 2017 to 1.4% in 2018), as well as the accelerated promotion of hardbound housing policy (in May 2017, the 13th five year plan for the construction industry of the Ministry of housing and urban rural development pointed out that the newly started fully decorated residential area will reach 30% by 2020), The traditional "incremental market" is turning to "structured market".
“ The arrival of "Silver Age" not only means that the growth rate of customization industry will be difficult to maintain more than 20%, but also means that the advantages of traditional business model of customized enterprises are disintegrating and the traditional growth mode is invalid. The reason why furniture enterprises can win the "golden decade" is that they share the manufacturing dividend under the background of rapid growth of real estate. Although customized furniture enterprises are different from traditional finished furniture enterprises because of their information driven pull supply chain, which provides services to meet customers' personalized customization needs, it can not cover up the fact that most customized furniture enterprises have "pull" value chain on the surface but "push type" value chain in the past decade, On the surface, the "service" orientation is actually the "product" orientation, as well as the channel driven growth of horse racing and enclosure.
When the industrial factors that rely on rapid growth are weakened or even disappeared, the disadvantages of this homogeneous and extensive growth mode are exposed: product homogeneity, no viscosity to customers, low-frequency consumption, high drainage costs, no strategic moat, etc.
Three transformations of winning in the second half
Facing the "Silver Age", the customized furniture industry is entering the competition in the second half, which is quite different from the competition in the first half
From "homogenization" to "differentiation".
The competition in the first half was homogeneous. With the help of the industrial outlet, customized enterprises compete for capacity layout, channel expansion and advertising investment. However, in the second half of the year, customized enterprises should innovate business models according to their own endowment, resources and capabilities, and replace homogeneous competition with differentiation.
Transformation from "product logic" to "customer value logic"
In the first half of the year, most customized enterprises followed the product logic. Under the product logic, the "whole house" was to "put more potatoes in the sack" to realize tie-in sale; In the second half, enterprises must transform into the logic of "customer value". Under the logic of customer value, enterprises can become the solution based on lifestyle by doing "whole house". It looks like the same playing method, but under different logic, the effect is quite different.
The transformation from "Opportunity Driven" to "capability driven".
The success of customization enterprises in the first half is not only related to their own efforts, but also benefited from accidental opportunities. However, the success of the second half requires the transformation of accidental opportunities into inevitable capabilities. For those enterprises that can create core competencies that are difficult to copy and imitate by competitors in the short term, and form their own strategic moat, Capital markets must value it well above its competitors.