Home improvement enterprises "explosion thunder" to draw attention to the various links on the home improvement chain to bring what enlightenment?

From many branches being called "run away", to being issued a letter of concern by the Shenzhen Stock Exchange, and then to reply to the Shenzhen Stock Exchange's letter of concern explaining the closure, closure, cancellation, bankruptcy and other issues, in recent years, East Yisheng has continued to receive attention.

On May 31, Dongyisheng said in its announcement in response to the Shenzhen Stock Exchange's letter of concern that 28 stores have been closed since 2023 and the amount of non-performance has exceeded 160 million. Affected by the recent public opinion, some other stores have halted operations, and are actively taking measures to resume work and production. So closed shop work in the dynamic process. On June 4, Dong Yisheng's share price closed at 2.79 yuan/share, down 6.06%.

How do senior executives, industry practitioners, and association experts view the current situation of some home improvement companies "exploding thunder"? What does it teach the industry? Decoration customers, decoration enterprises, material suppliers and construction teams, regulatory authorities and other aspects should do next

Encourage and support the development of new decoration enterprises

Qin Zhanxue, president of the China Building Materials Circulation Association, said in an interview with a reporter from the New Beijing News that, first, a series of situations occurred in Dongyi Risheng is the result of the transformation and upgrading of enterprises in the home industry and the elimination of the old model. Second, the real estate industry has learned from the past, management departments at all levels and consumers should be vigilant, and pay special attention to some seemingly huge pure decoration teams. Third, it is necessary to encourage the development of some new enterprises engaged in decoration, especially for enterprises with perfect after-sales service measures to give greater support.

Qin Zhanxue said that the China Building Materials Circulation Association is currently promoting the transformation of low-energy homes, these enterprises have production, technology and service behind the strong support, the association will also call on the relevant government to give greater support in this regard, and even financial support, so that low carbon, low energy consumption, environmental protection, green home really into the people's homes.

Keep your eyes open for home improvement companies

Recently, Wang Linpeng, chairman of the board of directors of the house, also expressed his views on the "explosion thunder" of the home improvement company in the video number.

Wang Linpeng said, first, from now on decoration customers to open their eyes, carefully choose the home improvement company, this year and next year the home improvement company explosion may be a common phenomenon, because the business model of the home improvement company is the same as the real estate company, they rely on the advance collection of customers' decoration money and overdraft material suppliers, construction team construction costs to maintain operation. If the home improvement company takes the money to focus on customer service and special funds, the problem is not big, it is recommended that customers choose such a home improvement company. However, many home improvement companies take the money received in advance from customers, expand everywhere, and even engage in diversified investment, in the case of rapid market growth in the past few years, the problem has not been exposed, but now the market is down, this model can no longer be maintained, so it is a matter of time.

Second, please open your eyes to the relevant government departments, from now on home improvement companies to receive customer decoration money to implement supervision. Because the advance payment of each customer is not a small number, but as little as tens of thousands, and as large as hundreds of thousands or even millions, once the home improvement company runs away or the explosion of thunder, it will be like the explosion of real estate, involving thousands of families, and finally the government will pay the bill. It is recommended that the advance payment of the decoration money of customers be deposited in the supervision bank or law firm, which will supervise the payment. Make sure the money is earmarked.

Third, remind the material supplier and the construction team to keep their eyes open, be sure to control the credit account of the home improvement company within the controllable range, and provide bank acceptance bills beyond the scope. At present, banks have strong support for supply chain finance services, if the bank does not provide acceptance services to the home improvement company, it means that the home improvement company has no credit in the eyes of the bank, and then it is dangerous to get credit. The explosion of real estate companies such as Evergrande has dragged down a large number of factories in the home industry. I do not want to see a large number of material suppliers and construction teams in the home industry drag down because of the explosion of the home improvement company.

Home improvement companies examine the real demand and create a multi-win value chain

In addition, some industry practitioners believe that the crisis of Dongyi Sheng has brought three Revelations to the home improvement industry, the most important thing to do is cash flow, home improvement companies should examine what they want, and create a multi-win value chain.

First, the most important thing in business is cash flow. Cash flow is king, if the enterprise does not have cash flow, then the survival of the enterprise will encounter a crisis. In the current new cycle of the market, the new stage of the industry, including all home improvement companies and even all building materials or home companies should re-examine the cash flow of the entire operation, because the cash flow determines the life and death of the enterprise, all companies must raise the cash flow to the highest dimension of the entire business.

Second, home improvement companies need to look at what they want. In fact, the overall profitability of the home improvement company is general, the core of the home improvement company is good cash flow, because you can receive full payment from customers, while suppliers, material suppliers can occupy the supplier's payment, there is an account period. This brings an important revelation to home improvement companies, to maintain good cash flow, business rotation. But with less and less traffic now, the cost of traffic is getting higher and higher, home improvement companies want to operate, cash flow up, business can not stop, so many home improvement companies began crazy marketing, customer, traffic and marketing expenses accounted for much more than the normal quality of business scope, many companies to get traffic costs, marketing costs have exceeded 10 points. Some companies even exaggerated to 20%, this desperate like playing method also to home improvement companies buried the foreshadowed crisis. Even if the high cost of marketing investment can not bring performance growth, or even performance decline to a certain extent, it will certainly produce a cash flow crisis, if this time the supplier run, then the home improvement company explosion may not be a two things. This revelation home improvement companies to examine their own business, can not be for performance and performance, can not take life-style marketing to maintain cash flow, maintain operation, if this business can not go on, then the whole company is facing a crisis of survival.

Third, home improvement companies to think about the value chain to create what? Today's package is the consensus of the whole industry, has become the mainstream business model, but at present many package companies are in a bad state of development, summed up is the inefficient cycle of the industrial chain and value chain. For example, the gross profit of the packaging company and the package company is very low, the home improvement company has no money to earn, suppliers and material suppliers are forced to fight, the price is particularly low, and material suppliers and suppliers have no profit space. Consumers want better quality and service, but home improvement companies due to the price war, the price fell again and again, so there will inevitably be some problems in quality and service assurance, then the value of customers has not been realized, there is a "three-lose" situation, that is, home improvement companies are not profitable, material suppliers do not make money, customers are not satisfied, the entire home improvement industry is in the cycle of inefficient chain. Home improvement industry is a trillion-level market, who can really "kill" out in this industry, or to create a multi-win value chain, only the value chain will have a future.

Beijing News reporter Zhang Jie

Editor Wang Lin

Proofread Liu Baoqing