Zeng Zhenyu, Chairman of Shengjia Home (China Chain Agency), President of China Furniture Sellers Association
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“The furniture industry is now in the 'worry' situation.†As the rotating president of the China Furniture Sellers Association, Mr. Zeng Zhenyu, chairman of the Shengjia Home Chain Group, said that in the face of the current situation of the home market in first- and second-tier cities, Shengjia Home has begun to lay out third-tier cities and district and county cities to expand new markets.
As a southerner in the country, Zeng Zhenyu chose to start a business in the north; as the chairman of the Shengjia Home (China) chain (hereinafter referred to as Shengjia Home), his home brand has created many industries in China, but at 19 In the development of the year, he deliberately kept a low profile; the teacher was born, facing the shortcomings of the current home store, he could also take the case and swear; and as the rotating president of the China Furniture Sellers Association, his dream is to break the morbidity of the furniture industry hypermarket. The status quo has realized the transformation of the home store from the “manufacturing promotion†development model to the “commercial driving†development model.
Market expansion speed "outperforms" market growth rate
Just after the Spring Festival of 2012, Zeng Zhenyu flew from his hometown in the south to Tianjin. Subsequently, the head of the North China Region of Shengjia Home was rushed to Tianjin County.
Shengjia Home has an independent store with an area of ​​1,000 square meters in Jixian County. It opened at the end of 2010 and now has a stable source of customers.
“(Shengjia Home) has taken the market down, and the furniture industry is expanding its market to third-tier cities and below.†Zeng Zhenyu said that for Shengjia Home, profits have fallen to the lowest point, and transformation and upgrading have become the biggest task at present. In his planning, he has been transforming from southern cities such as Meizhou, Guangzhou, and Shenzhen, and gradually copied to the northern and western cities. The integration of home decoration, advanced and independent logistics distribution system and other upgrade engineering projects have also been put on the agenda.
In his analysis, since 2008, due to factors such as the financial crisis, the furniture industry has ended its previous moisturizing days. In 2011, it began to perform the most concentrated, but when it ushered in the "second spring" and "third spring" Also depends on the direction of domestic economic policy.
The same is true. Since 2011, the sound of home stores has been withdrawn and even closed down.
"There are many excuses for decoration, rectification, etc., which are in a state of suspension and suspension of business," said Zeng.
In 2010, the size of the Tianjin home furnishing store was 300,000 square meters, and by 2011 it had reached 1 million square meters. Originally, the size of the cake in the market was certain, but the number of people who came to grab the cake increased sharply, and there were bound to be people who could not eat enough or even starve to death. Even so, in 2012, home stores are still expanding rapidly, such as Red Star Macalline, Real Home and other leading stores still lead the way to expansion.
Zeng Zhenyu said that in recent years, domestic commercial real estate has become more popular, building houses for rent, and renting home stores is the most cost-effective. Home stores have been rapidly developed in this process. Different from the self-operated model of Shengjia Home, according to industry rules, if other home stores including the above-mentioned home stores are to open new stores, their dealers must follow the store to open new stores, and the expansion of the store expands and controls the sales channels. It is equal to the kidnapping of the furniture factory and the seller. "If there is no reasonable planning or policy intervention, the store will continue to expand rapidly." Zeng Zhenyu worried.
“manufacturing push†to “commercial pullâ€
On December 26, 2011, at the "China Furniture Industry Development Summit Forum" held in Sakaguchi, Suzhou, Zeng Zhenyu, who has always been low-key, suddenly fired at home stores: "In 2011, more than 80% of dealers nationwide were at a loss", and early At the Guangdong Furniture Annual Meeting a week ago, Zeng Zhenyu was also suffering from the current big store drawbacks. At this time, his other identity is the rotating president of the China Home Sales Association.
On February 10, Zeng Zhenyu said in an interview with reporters that the industry is an industrial chain, and the merchants in the stores are under pressure to increase rents. In 2012, the wave of dealers’ withdrawals and store closures will continue.
In his view, the rapid expansion of hypermarkets is the main reason for the “distributor†to become “distribution ,â€. The back reflects the drawbacks of the current channel and terminal problems in the furniture industry. The traditional business circulation model is too singular. According to the information provided by the China Furniture Sellers Association, before 2007, dealers' net profit was above 20%, and now only 5% or lower, 15% of which was taken away by circulation terminals. Even if artificial wages rise and raw materials rise, furniture manufacturers are not willing to raise prices at will, but furniture prices at retail terminals may rise by 30%-40%, a large part of which comes from channel costs.
"The ultimate victim will be the people." Zeng Zhenyu said that some stores rely on the rapid development of the furniture industry, relying on rent to accumulate wealth, and more is to appreciate the land and shops.
The China Furniture Sellers Association was established in September 2010. As the president of the rotation, he believes that the establishment of the federation is not a "landlord", but a struggle for the right to speak, so that the entire industrial chain will be harmonious and win-win, and sustainable development. The seller is the main link in the entire industry chain. It has always played the role of promoting the development of home stores and accumulating profits, but it has been marginalized and its basic demands have not been met.
The biggest problem with circulation is that the commercial channels are too narrow and are crowded on a runway, which brings a lot of confusion and pressure to the dealers. “Get rid of the self-made channels of hypermarketsâ€, build independent stores, community stores, develop online channels, and directly support real estate sales and other modes will be tried. It has been argued that from the perspective of the development of the same industry in Europe and the United States, the hypermarket is not a long-term solution. Chinese furniture has entered the brand era. The autonomy of the operation and the pricing power of the products are becoming more and more important, but this is not available in the big sales places.
Wish: Breaking the deadlock in the era of China's furniture industry hypermarket
"China is now entering the real estate era," said Zeng Zhenyu. "It is the most cost-effective way to rent a house and rent it to a home store. It costs tens of thousands of square meters. So several domestic home stores have developed rapidly in this process, like Red Star. , Ou Yada, etc., as well as local stores, such as Jimei in Beijing, outside the city, and Ginza in Shandong, all of which are very lively in the local area.†Zeng Zhenyu believes that the expansion of the store’s large-scale expansion controls the sales channels. The furniture factory and the seller were kidnapped at the same time. "Good shop gives you the factory, give you the brand, and you have to follow up the bad shop. If you don't follow the good store, you have to give it to me." This overlord regulation of the hypermarket, the furniture factory and the seller Forced into a dead end.
Zeng Zhenyu proposed that to solve this problem, the furniture industry must create more channels and not rely too much on hypermarkets. According to Zeng Zhenyu, the model of China's hypermarkets has disappeared in Europe and the United States decades ago. "This model is obviously unreasonable. Home is a specialized product. It is not bought every day. Although it has a cultural face, it is not something like consumables, daily necessities, clothing, food, shelter, and so on. It is bought every day. The hypermarkets are getting bigger and bigger, from 10,000 square meters to tens of thousands of square meters, hundreds of thousands of square meters, now to hundreds of thousands of square meters, and there are many stores in a city with 100,000 square meters. How is this possible? It is against the laws of the economy. There are usually few guests who go shopping in the market, and there are very few people on weekends because they are diverted."
"Directly facing consumers, you can make small profits and more sales." Zeng Zhenyu said, while other home store models are faced with furniture sellers, renting out stores, collecting funds to earn profits, and only providing "a sales platform."
Zeng Zhenyu is studying the IKEA (Ikea Home) model and the Ashley model. He believes that although the two models are different, they are the same consumer-centric business model. IKEA is committed to turning home into a culture and even a lifestyle. Compared to the Chinese furniture store, which is empty all the year round, IKEA is always popular because it meets the needs of people for a diverse life. Ashley focuses on making large pieces of furniture, using its own channel model, its own brand, and its own design philosophy to provide convenient and simple furniture purchase services. Zeng Zhenyu believes that the IKEA (Ikea Home) model and the Ashley model are the direction of China's furniture industry reform: "The same as the Chinese who used to drink Coke, there was no one to drink at first, and they felt bitter, like drinking medicine. Later, they tasted it. Now, some people say that drinking cola feels bitter? What is it now? Sweet juice."
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