1. Decoding the model of the global home furnishing giant
IKEA - a Swedish home furnishing giant that focuses on supply chain management and experiential consumption
.1 Operating performance continues to grow steadily
IKEA originated in Sweden in 1943. In 65 years, it has grown from a small retail store in the southern Swedish countryside. , gradually developed into a large-scale retail enterprise with shopping malls in 40 countries or regions around the world. The company's business involves all aspects of the home furnishing industry chain, with the core being outsourcing low value-added manufacturing links to enhance the competitiveness of home furnishing brands, product design, retail channels and supply chain management.
IKEA's development history can be divided into three stages:
The company's operating income and net profit have maintained steady growth in recent years. In fiscal year 2017, the total retail sales of the IKEA Group reached 34.1 billion euros. The sales revenue of supply chain and production companies was not calculated in 2017. From September 1, 2017, the revenue of these companies will no longer be included in the IKEA Group. If only the Retail sales, retail sales in 2016 were 32.9 billion euros, a year-on-year increase of 3.7% in 2017.
.2 IKEA’s key to success
● Seize the core profit links and outsource secondary links
IKEA’s low-price strategy runs through the entire process from product design to styling, material selection, OEM manufacturer selection and management, logistics design, and store management. process.
IKEA abandons the traditional "front store and back factory" business model and seizes product research and development and sales, the two most profitable links. The remaining links with lower profit returns, such as manufacturing, logistics and transportation, are outsourced. Complete the coordination of the entire industry chain.
●Global procurement model
IKEA's suppliers are distributed in 70 countries around the world, with approximately 1,400 suppliers. After IKEA products are purchased from various regions, they are shipped to various distribution centers around the world and then delivered to shopping malls.
●Extensive channel layout
As of 2017, IKEA has opened 355 stores in 29 countries and regions, has 149,000 employees, and has visited 817 million stores.
●Open a large store to provide one-stop service
The area of an IKEA store is usually about 30,000 square meters. The store generally has three floors and four major areas, namely, furniture showroom, home furnishings area, cashier and storage area. Furniture showrooms and homewares areas are the main browsing areas for consumers and are the places that influence purchasing decisions. IKEA divides the entire mall into super hot areas, hot areas, and cold areas, providing a full range of products and one-stop services.
●Optimize the supplier management system and ensure product quality
IKEA’s original purchasing code of conduct, namely The IKEA way of purchasing home furnishing products (“IWAY” for short), includes price improvement, supply service level, good quality products, environmental protection and Four aspects of social responsibility.
● Build high-frequency consumption scenarios and focus on experiential consumption
IKEA uses the "back-shaped" scenario superposition and concentrated display of single combinations to allow consumers to actively "check in" and restore the real scenes of home use, through experiential consumption, ultimately leading to purchase.
In addition, IKEA also attracts customer flow through high-frequency consumption scenarios such as catering. On the one hand, it extends the user's stay time and improves the user experience. On the other hand, it also drives overall revenue growth. In fiscal 2017, food revenue was 1.8 billion euros.
Hansen - the leader in the Korean home furnishing industry that started with cabinets
.1 Cabinet company transformation major home supplier
Korean Hansen Company was founded in 1970 and listed on the Korean Stock Exchange in 2006. It is one of the world's top five cabinet manufacturers. is one of the largest furniture manufacturers in South Korea, with a market share of nearly 20% in the Korean furniture field. The company's development can be divided into two stages:
As of the end of 2016, Hansen Korea achieved operating income of 1,934.547 billion won, with an average annual compound growth rate of 16.05% since its listing. In 2016, it achieved net profit of 127.531 billion won, with a compound growth rate of 16.05%. 27.81%. Since the company's transformation into the home furnishing business, operating income and net profit have maintained rapid growth. Especially from 2013 to 2017, the operating income growth rate was around 30%, and the net profit growth rate exceeded 30%.
.2 Category expansion creates core competitiveness
● It has the leading products of cabinets and continuously enriches the product line.
Cabinet decoration is in the forefront, which can guide the sales of other furniture and even home appliances. Cabinets are Hansen's flagship product. The company relies on the good sales foundation of the cabinet business to successfully enter the large home furnishing market. The company
will launch new brands in a timely manner to maintain sales in the kitchen cabinet sector. Since 2006, it has launched sub-brands such as Kitchen Bach, Interior Kitchen (IK) and Hi Bath. As the growth rate of household consumption levels in South Korea decreases, the company actively explores the market by launching the mid- to low-end cabinet brand IK, opening up a new growth point for the cabinet business. The most typical is that IK's sales revenue increased by 41.54%, 46.19%, and 49.55% respectively from 2013 to 2015, driving the high growth rate of the cabinet sector.
● All categories of large home furnishings increase revenue sources
The company has three departments: cabinets, indoor furniture and engineering sales. The income of the cabinet department includes the income of cabinet stores and IK. The income of the indoor furniture department includes flagship stores, furniture stores and online sales. Income, project sales are B2B project order sales income.
In 2016, indoor furniture accounted for 33.57% of the revenue, and the cabinet department accounted for 42.07% of the revenue, which also includes some bathroom products. Large home products other than cabinets have become an important part of the company's revenue.
● Excellent manufacturing and supply chain management capabilities
Hansen has the largest manufacturing factory in the Korean furniture industry. The company reduces production costs and improves production efficiency through large-scale production, setting up factories in Southeast Asia, and increasing investment in automation equipment. At the same time, focusing on cost-effective products, Hansen has gradually built its brand competitiveness with design capabilities, channel layout, manufacturing, supply chain management and customer service as its core. At present, the production and delivery cycle of cabinets is shortened to less than one week, the production and delivery cycle of furniture is within 3 days, and on-site installation can be completed within one day.
NITORI - "manufacturing-logistics-retailing" integrated Japanese full-category home furnishing supplier
.1 full-category affordable home furnishing chain store
NITORI (NITORI) was founded in 1972, formerly known as Akio Nitori Nitori Furniture Store, founded in , Hokkaido, Japan in 1967, has become Japan's largest furniture and home decoration chain store. Its business scope includes sofas, cabinets, beds and other large furniture, curtains, carpets, bedding and other home furnishings. supplies and interior decoration supplies, etc.
Yideli products are famous for their "high quality and low price". They target middle-class families and below, which account for 80% of Japan's population. They provide a large number of pillows, quilt covers, slippers, towels and other small household items. Household items account for more than 60%. Home products are high-frequency consumer goods, with a higher turnover rate than furniture, which can greatly promote traffic and repurchase rates.
In the market environment where Japan's economy continues to be sluggish, traditional retail companies continue to suffer heavy losses, and the furniture industry is shrinking, Yideli's operating income and net profit have maintained rapid and stable growth for nearly 30 years. In 2017, Yideli achieved operating income of 512.958 billion yen and net profit of 59.999 billion yen. From 2007 to 2017, Yideli's operating income CAGR was 10.49%, and its net profit CAGR was 16.14%.
.2 Create an integrated business model of "manufacturing-logistics-retailing"
Yideli's core competitiveness is the integration of "products + supply chain integration + terminal retail". As a home furnishing chain retail enterprise, Yideli participates in products and services and consumer experience, Yideli personally participates in every link from furniture design, procurement, production to channels, sales, and logistics to create a good user experience.
● Products: Strengthen independent design and increase the sales share of household products
Yideli’s products are of high quality and low price. The flagship store displays quilt covers, pillows, towels and other small household essentials on the first floor, which is called Home Fashion. The proportion of small household products in NITORI's total sales has increased year by year. In the financial year ending in February 2017, the sales of household products accounted for 60.8%.
Yideli invests heavily in the design of household products and introduces new products frequently. At the same time, through overseas procurement, it uses cheap labor in Southeast Asia to reduce production costs and implements strict management of foundries to ensure product quality. Currently, it purchases goods overseas. Accounting for 80%.
●Logistics: Establishing an efficient supply chain management system
Yideli reduces the transportation costs of overseas imported goods by establishing an efficient and sound logistics distribution network. In 1980, it built the industry's first automated three-dimensional warehouse and has 10 logistics centers in Japan. It has also established logistics bases in major procurement and production bases in China and Southeast Asia.
Yideli has integrated the supply chain and laid out the entire industry chain from furniture design, procurement, production to channels, sales, logistics and other links. After years of exploration, it has built a complete commodity supply chain system.
● Sales: multi-level channel layout
Yideli has more than 500 stores in Japan, the United States, and China, including home improvement stores, super large comprehensive stores, and Deco Home stores. At the same time, Yideli actively deploys online sales channels and develops B-end customers.
Teli Hele - a Taiwanese home furnishing brand focusing on small and medium-sized stores
Teli Hele from Taiwan belongs to the internationally renowned trading group - Teli Group, and provides products to well-known retail stores around the world. Tellus Group includes services such as home furnishings, home repairs, mattresses and bedding, and all-round home integration services.
At the end of 2004, Tellus Group announced that Tellus and Le had entered the mainland market. Compared with mainland China, which only has soft decoration business, Tellus Group has soft decoration, hard decoration, design, home decoration services and other businesses in Taiwan, and its development is much more mature.
Tellus Group's operating income in 2017 was NT$36.963 billion, with a CAGR of 1.36% over the past ten years. The net profit has been relatively stable in the past five years, maintaining around NT$700 million.
The performance growth rate of Tellus Group is relatively slow, mainly due to the relatively weak economic growth in Taiwan and the relatively low frequency of home furnishing updates. However, this does not prevent Tellus from attracting a large number of customers with its complete range of home furnishings categories and situational displays. , becoming the leader in Taiwan’s home furnishing industry.
The core competitiveness of Telihele includes the following points:
(1) The first in-store "home decoration consultant", which can provide consumers with free consulting services such as space use, color use, and layout matching, and based on individual consumers According to the needs, we provide a number of professional services such as tailor-made, flexible construction, professional construction and installation.
(2) adopts a differentiation strategy from other home furnishing giants.
① The product positioning is relatively high-end, with a distribution ratio of 60%.
Telihele has relatively few entry-level products, and its products are mainly divided into value-for-money and affordable luxury. Among them, private label products only account for 40%, and the remaining products are marketing agents of the "Walmart model", and their prices are generally higher than those of brands such as IKEA. At present, Tellex and Le represent more than 100 well-known brands. Except for a small number of counters, more than 85% of the brands entering the store are directly distributed by Tellix and Le. Unlike IKEA, which mainly sells furniture, Triwu’s small furnishings and decorations account for more than 80%.
②Accelerate the frequency of product updates
Telihele's fast moving consumer goods area will be updated once a year, and "safety" products such as furniture will also be updated by 50% every year. Compared with IKEA, which insists on a single style to guide consumption, Trinix adopts a multi-category and frequent replacement approach to create an image of rich product types.
③ Strong purchase channel
Telihele adopts a small batch and multi-batch approach in ordering to reduce inventory. Even if the trend prediction is wrong, losses can be reduced in time.
④For small and medium-sized stores, the location selection center is regionalized.
Telihele's stores in mainland China are different from Taiwan, which are mostly opened in the suburbs. Some stores have opened in core business districts, and the store area is about 1,000-2,000 square meters. Because the products are positioned relatively high-end, stores opened in shopping malls can quickly attract traffic and attract customers to spend.
2. Inspiration from the successful experience of global home furnishing giants
The leader in the home furnishing industry has the potential to be a bullish stock
South Korea's Hansen started with cabinets. Although it was affected by the decline in the growth rate of the Korean property market in some years, the company has the ability to ride through the real estate cycle. Hansen The stock price has experienced a maximum increase of more than 40 times since 2006. As of the end of April 2018, it was still up 15 times. During the same period, the KOSPI index even declined, with a decrease of about 30%. Since
was listed in 2002, Yideli's stock price has increased nearly 15 times, while the Nikkei Index has only increased 2 times during the same period, significantly outperforming the market. Since 2013, Yideli has got rid of the impact of the earthquake in Japan, and the growth rate of operating income and net profit has begun to rebound again. At the same time, it has begun the pace of overseas expansion, entering the U.S. and Chinese markets one after another. The company plans to open 1,000 stores worldwide by 2022. The goal of offline stores. Therefore, the company's valuation level, market capitalization and stock price began to increase significantly in 2013, with a cumulative increase of 3 to 4 times.
Keys to the success of home furnishing chain stores: products + large stores + consumer experience + supply chain system
Judging from the development trajectories of IKEA, Hansen, Yideli, Tellus and Le, there are some similarities in the success of global home furnishing leaders. It mainly includes four points, namely improving product design, providing one-stop shopping service, focusing on consumer experience and improving supply chain management system.
.1Focus on product design and quality
The cornerstone of the success of global home furnishing giants is to provide cost-effective products. Products with high quality, low price and rich design are the key to success. IKEA and Yideli both attach great importance to product design. Trimix even sends designers to European and American fashion outposts every quarter to capture inspiration. Home furnishing giants improve the quality of consumers' homes by improving product quality and advocating advanced life concepts.
.2 Opening a large store orientation, providing one-stop shopping service
Judging from the development history of global home furnishing giants, IKEA and Yideli have always adhered to the large store model. Hansen in South Korea started as a cabinet specialty store, but is also exploring large-scale stores. Store model, the area of new stores is more than 10,000 square meters. Telihele chooses a differentiated competition model. Although the store area is small, it also provides as many categories of products as possible.
opens a large store to create a one-stop shopping mall. The advantages are: (1) fully displaying products and providing diversified sample space to increase consumers’ shopping pleasure; (2) selling a full range of household products to expand consumer choices face to enhance the shopping experience.
.3 focuses on consumer experience and creates high-frequency consumption scenarios.
Furniture is a low-frequency consumer product. The replacement cycle is usually as long as five to ten years, and consumers’ shopping stickiness is relatively low. In order to increase the return rate and improve customer stickiness, IKEA, Yideli, Teli and Le all provide a large number of home furnishings and daily necessities to increase the frequency of shopping. At the same time, IKEA has also introduced food and catering consumption to improve user experience by creating high-frequency consumption scenarios.
.4 Improve the level of informatization and supply chain management
Home furnishing giants generally have a strong supply chain management system. They create an integrated supply chain and warehousing system through direct supply from manufacturers + centralized warehousing + unified distribution, and at the same time improve production and operation efficiency through information management systems. , thereby ensuring product quality and reducing production costs.
Taking IKEA as an example, it has deployed a supply chain management system on a global scale, and rationally allocates raw material supply and product production to complete orders based on market demand. At the same time, in order to reduce costs, IKEA uses flat packaging to save transportation space and reduce transportation losses.
3. Domestic home furnishing sales model: entering home furnishing stores VS independent home furnishing stores
Entering home furnishing stores and sharing brand synergy dividends
Most of the domestic one-stop shopping malls are building materials supermarkets. Merchants form industrial agglomerations by entering the building materials market, or dealers start from From acting as a single brand to gradually expanding brand categories, we gradually formed a centralized sales model with complete categories and diverse products. Consumers make centralized purchases through the building materials market to reduce shopping costs and improve purchasing efficiency.
Chain building materials and home furnishing stores usually concentrate a large number of furniture brands, which are reasonably laid out according to certain spaces and elements to achieve an integrated layout of upstream and downstream multi-categories. After entering the store, consumers can enter each area in order to complete furniture purchases. There are currently many home building materials stores of this type in our country, and this model requires a synergy between shopping malls and furniture brands.
Open independent stores, deep channel layout
In addition to entering stores, some home furnishing companies will choose to open independent large stores and establish their own sales channels to display goods. This model is somewhat similar to the model of Tellex, which opens independent stores in large shopping malls. , with an area of about 1,000 to 3,000 square meters, operates multiple categories of household items, including large furniture for low-frequency consumption and small household items for high-frequency consumption.
Offline stores supplemented by the "C2B+O2O" model are expected to break through
We believe that it will be difficult for the chain store model to develop into a home furnishing giant like IKEA. Stores usually do not have product design and production capabilities, and in the logistics and supply chain There is also a lack of experience in management. Its main profit point lies in mastering terminal sales channels, but it is difficult to expand the entire industry chain. However, if we stick to the retail sector and have strong channel control capabilities, we are still expected to make the company bigger.
The independent store model has higher requirements for manufacturing enterprises, which usually require enterprises to possess the following three qualities:
(1) The product categories are complete and the ability to provide consumers with one-stop services;
(2) The financial strength is strong and the ability to Bear the rent cost of opening a store and the cost of channel laying;
(3) has a certain brand influence and can have a certain appeal to consumers.
Judging from the current development of the home furnishing industry, some leading home furnishing companies have begun to develop a multi-category home furnishing development model, and are trying to explore the opening of offline independent stores. This model is expected to stand out after the initial financial pressure. Heavy siege.
We believe that in addition to owning offline stores, building a "C2B+O2O" model can help home furnishing companies make gains in the new retail battlefield. The "C2B+O2O" model helps traditional home building materials companies to carry out comprehensive innovations in business thinking, commerce and business models, meet individual needs at relatively low costs, and achieve standardized and large-scale production because of the strengths of home products. It is manufacturing itself. At the same time,
helps high-quality brands form a word-of-mouth effect through online and offline integrated experiences, and solves the pain points of opaque information and high prices in the industry.
4. Investment advice: Pay attention to home furnishing chain stores and pioneers in large home furnishing layouts
Macalline (601828): The leading home furnishing chain store, stores continue to expand
The company is the number one brand in domestic home decoration and furniture retail stores, and has connections with approximately 11,000 households. The brand factory has established close cooperative relationships with approximately 40,000 dealers. The company has vigorously expanded its channels, and its self-operated shopping malls have significant location advantages; its entrusted management shopping malls adopt an asset-light model and are expanding rapidly. As of the end of 2017, the company operated a total of 256 shopping malls (71 self-operated shopping malls and 185 entrusted management shopping malls), with store occupancy rates reaching 97.6%.
At the same time, the company builds an Internet retail platform, diverts traffic to offline through online customer operations, provides high-quality products offline, and provides a good one-stop shopping experience. In 2017, Macalline achieved operating income of 10.96 billion yuan, a year-on-year increase of 16.14%; net profit attributable to shareholders of listed companies was 4.078 billion yuan, a year-on-year increase of 20.04%
Shangpin Home Delivery (300616): Opening an offline "super store" , to develop new channels for offline traffic
Compared with other customized home furnishing companies, Shangpin Home Delivery has a higher proportion of direct sales, and its directly operated stores are mainly located in the core business districts of Beijing, Shanghai and Guangzhou. Company-operated stores include flagship stores (O stores) and standard stores. The flagship store has a usable area of about 2,000 square meters and is usually located in a commercial office building; the standard store has a usable area of about 300 square meters and is usually located in shopping malls and commercial street stores. and large building materials centers.
In April 2018, Shangpin Home Delivery’s world’s first “super store” (C store) advocating “slow life experience” opened in Shanghai, with an area of more than 3,000 square meters. In addition to selling its own home products, it also gathered 12HOURS COFFEE , PHOENIX, Taidi , Ubao, Yongle Life Appliances and other brands integrate the diverse life of eating, drinking, playing and having fun, using the "Collection" collection model to interpret "home, fashion, An offline store integrating art and social interaction. As the online dividends of O2O traffic are fading and the cost of online traffic continues to increase, the opening of C stores has opened up new channels for the company to attract traffic.
In 2017, the company achieved operating income of 5.323 billion yuan, a year-on-year increase of 32.23%; net profit attributable to the parent company was 380 million yuan, a year-on-year increase of 48.74%; net profit attributable to the parent company after deduction of non-profit items was 335 million yuan, a year-on-year increase of 31.04%.
Qumei Home Furnishing (603818): Accelerate the layout of offline stores and expand the customization business
Qumei Home Furnishing accelerates the layout of offline stores and actively improves the product series of finished furniture, customized furniture and home accessories, forming a "customized + finished products + soft furnishings" "Multi-category and multi-level product matrix, and formed a characteristic boutique lifestyle model at the terminal, including "You + Life Gallery", "Home + Life Gallery", etc. to meet different levels of market demand and consumer demand. Since 2017,
company has comprehensively deployed "You+Life Store" with an area of 800-2000 square meters. As of the end of 2017, 67 stores have been opened. The "Ju + Life Store" first launched in September 2017 has more than 100 contracted customers. By the end of 2017, 15 stores had been opened; at the same time, the company has expanded its customized home furnishing products, with 87 newly opened B8 custom stores and 13 independent stores. Currently, there are 227 B8 independent stores and more than 460 stores that can provide B8 customized services. Home.
In 2017, the company achieved operating income of 2.097 billion yuan, a year-on-year increase of 26.05%; the net profit attributable to the parent company was 246 million yuan, a year-on-year increase of 32.78%.
Risk reminder
The cost of opening a store has increased significantly
Opening large-scale offline stores will increase financial expenditures and put pressure on the company's cash flow
Offline traffic diversion is not as expected as expected
Offline traffic is not as expected, and the store opening effect will be compromised
Real estate sales are not as expected
Tighter real estate regulations will restrict household consumption demand
