Faced with rising rental costs in home stores, self-built channels in the building materials industry

 

On December 4, the home building materials distribution company Hua Nai Home Furnishing initiated and cooperated with more than 20 ceramic manufacturers including Mona Lisa, Jiu Mu, New Pearl Group, Aesthetic Group, Lehua Group, Dongpeng Ceramics, etc. Investment Development Co., Ltd. develops a new model home furnishing market. In the face of the strength of the home furnishing market and the continuous rise in rental costs, or even the risk of being dismissed at any time, the ceramics owners in the home building materials market decided to take the lead in heating up against home furnishing. Store. If you want to build your own investment channel, break through the way of self-owned property.

 

 

Self-built channels

 

China Tao Investment & Development Co., Ltd. has raised 200 million yuan, and currently has 20 shareholders, each of whom does not hold more than 5% of the shares. The first chairman is Jia Feng, president of Hua Nai Furniture Group.

 

Unlike most shareholders who are ceramic manufacturers, Hua Nai Home itself is not a manufacturer, but a retailer. At present, he represents Marco Polo, Mona Lisa, Wrigley, Faenza Sanitary Ware and other ceramic tile sanitary ware brands, and has more than 800 chain stores across the country, as well as Huali Lijia, a home store platform, which is currently in operation and under construction. 9 projects have been built, mainly concentrated in the third and fourth tier cities. "Huanai, as a retailer, is more likely to unite companies, avoiding other companies from convincing others, and ultimately it is difficult to form a group. At present, China Ceramics is mainly the industry's 20 leading companies, first in the ceramic industry, and it will develop more in the future. Many companies, and many other industries such as sanitary ware come in. "As the promoter behind the establishment of China Ceramics, Miao Bin, secretary general of China Building Sanitary Ceramics Association, said.

 

"China Tao itself does not have much operating capital, in fact, it is more of a symbolic meaning, which means that everyone must join forces to fight against the home hypermarket." At the establishment of China Tao Investment and Development Co., Ltd., a person from the brilliant plumbing group Said.

 

The first project after the establishment of Sino-Tao Investment was to invest in Huali Group, a platform of Huanai Group. Although it is also a home building materials retailer, in the home furnishing hypermarkets such as Red Star Macalline and Actual Home, various Brand stores are signing contracts with the former by rent, and at Huamei Lijia, "all brands that are stationed are self-owned properties, we do not rent, we sell all properties to merchants." Jia Feng said.

 

As a latecomer, in order to avoid head-to-head battles with Red Star Macalline and Actual Home, Huamei Lijia is still concentrated in third- and fourth-tier cities. And for Huamei Lijia, there are only two projects in operation. Compared with Xingmei Kailong and Actual Home, which currently have hundreds of stores, its ability to control large-scale home retail platforms still has a gap.

 

A marketing director of Red Star Macalline in Beijing believes that "they are essentially commercial real estate, but compared with us, they still have a certain gap in their ability to control the commercial real estate such as location selection and store management. Now the overall home building materials market is in a period of adjustment. At this time, it is also a problem whether the layout of the third and fourth tier cities can bring sales, and whether the settled merchants are willing to spend so much money to buy out the property at once. It is also a problem. If you ca n’t attract enough merchants to settle in, then it does n’t make sense for this sales platform to reach the ground. "

 

A shareholder who joined Zhongtao Investment said, "I hope there are more channel models in the industry to choose from, but I definitely cannot give up the channels of Red Star Macalline and Actual Home. After all, the latter basically monopolizes the home circulation in the first and second tier markets. Market, sales are still very large. "

 

Avoid being choked

 

Consistent with the ideas of the above shareholders, the owners of home building materials companies are too happy to see more rivals such as Red Star Macalline and Actual Home, launching changes in the channel model in the industry to avoid upstream manufacturing like the home appliance industry. The enterprise was tightly choked by the downstream store.

 

The self-owned property is used to fight against the Red Star and the actual rental hypermarket model, which reflects the biggest dissatisfaction of the home furnishing materials merchants with the current home mall model. "We joined and listened to the opinions of many dealers. The dealers have too much views on the current hypermarket rental model. They either raise rents frequently or are forced to withdraw from the store without answering the request of the responding party. This industry needs a healthy Channel. "As one of the shareholders of China Tao Investment, Ye Delin, chairman of the New Pearl Ceramics Group, said. "The current pattern of the home building materials circulation market is that the lease contract is signed once a year, and the rents increase year by year. At present, the rental cost accounts for about 80% of our sales cost, which is reflected in the sales price to consumers, which has accounted for three points. One. "Wen Jun, Director of Integration and Communication Department of Guangdong Huamei Lijia Investment Holding Co., Ltd., who has worked in the field of home building materials sales for many years. In the same industry abroad, the rental cost only accounts for about 10% of the sales price.

 

Such a channel model continues to increase the circulation costs of home furnishing enterprises, on the one hand pass high prices to consumers, on the other hand squeeze the sales profits of home building materials companies. What makes brand companies even more depressed is that the strong position of hypermarkets makes it difficult to protect their interests. "It is even difficult to guarantee a stable business place." Jia Feng said.

 

Around 2010, due to the popularity of the real estate market, Red Star Macalline, Actual Home, Jimei and other big-name home furnishing stores all spontaneously accelerated their expansion. Speeding up expansion on the one hand makes the brand power of these home furnishing stores continuously improve, on the other hand it makes the brand merchants miserable. "The rapid expansion of home stores has also kidnapped manufacturers to a certain extent. Wherever the home store is opened, it requires home building materials vendors to follow, even if some stores lose money, they must follow up, otherwise they will cancel their chains in their national hypermarkets. The right to enter the system. After the government began to regulate the real estate industry around 2011, some fast-expanding home furnishing stores have also shrunk sharply in the early period, and they have closed down some stores with poor sales. In this case, the store is closed. No consideration is given to whether the lease term with the merchant is over, etc. "said an industry source.

 

In the home building materials circle, in the face of the strength of home hypermarkets, an example of home furnishing materials manufacturers most frustrating is that, in September 2010, due to the competition for a commercial building in Beijing's North Fifth Ring Road, Red Star Macalline and actually The family began a public decisive battle, requiring brands to choose between the two, otherwise they would stop cooperation after the contract expires. Subsequently, the China Building Sanitation Association participated in the mediation, but in the face of this situation of fighting in the store and the suffering of the enterprise, "none of the dozens of companies participating dared to speak out." Liao Bin, Secretary General of the China Building Sanitation Ceramics Association .

 

It is a good attempt to lay out channels before the home hypermarkets have not completely choked the throats of home building materials manufacturers, but the lesson is that in the past 20 years, although home appliance manufacturers have launched various measures to fight against retailers, including enterprises Grouping, self-built channels, etc., but still unable to get rid of dependence on retail channels such as Suning and Gome. As the initiator of China Tao Investment, Hua Nai's efforts in the home building materials industry still need time to test. (Editor: Peter)

 

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