Customized wardrobes are an emerging segment of the traditional furniture industry. They have accelerated growth in the past five years, and have achieved nearly 20% growth in 2012, when the home industry is not doing well. In the past three years, the proportion of custom closets in the wardrobe industry has increased from 15% to 29%.
With the aura of the first listed company in the custom furniture industry, Sophia has raised funds for 1.143 billion yuan in two years. In the first half of this year, Sofia’s revenue has exceeded 600 million yuan, compared with only 420 million yuan in the same period last year. The agency recently rated Sophia for the first time, saying that the brand, capacity layout and channel advantages will support the company to continue to lead the industry. Analyst Hu Wei believes that the sinking of consumption will become the main growth driver of the custom wardrobe industry, and the good leading real estate indicators indicate that the industry has sufficient short-term growth momentum.
Customized wardrobes, red home market consumption sinks into industry drivers
The high growth foundation of “custom homeâ€
The relevant agencies believe that as the pioneer of domestic custom wardrobes, Sofia has a competitive first mover advantage. First, the brand advantage. Sophia is the earliest custom wardrobe brand in China. After more than ten years of accumulation, the brand awareness ranks first in the industry. Research shows that the Sofia brand's daily average search volume is far ahead, which is five times that of the second (Hou Laike); the media attention counted by the media's annual news is also ranked first. Second, the advantages of capacity layout. Sofia's nationwide capacity layout and flexible production capacity enable it to respond quickly to consumer orders, and the entire process can be completed in 20 days, which is quite competitive compared to the response time of more than 45 days for most other brands. In addition, the company began to popularize the application of information technology in 2005 to achieve large-scale production of customized products. Third, the channel advantage. Sophia has developed about 500 dealers, and the number of specialty stores is about 1,100. The radiation range is the first in the sub-sector, and the dealer replacement rate is less than 2%. The sustainable expansion is guaranteed.
Hu Wei stressed that furniture companies usually focus on manufacturing and neglect brand marketing, while Sofia is the first company in the industry to focus on brand marketing, adhere to the marketing strategy of high-end brands and mid-end consumption, and the proportion of advertising expenses to revenue in 2010-2012. It has been maintained between 5% and 6%.
In 2010, Sophia adopted the celebrity endorsement marketing method, and in the same period launched the "customized wardrobe, is Sofia" slogan. At this year's International Building Decoration Expo, Sofia released a new slogan "Customer, Sophia" to expand the brand.
In addition to the traditional dealer channels, Sofia also has a large business service department, which provides customized wardrobe support services for large-scale real estate decoration projects. According to Hu Wei, Sophia has established cooperative relationships with well-known developers such as Poly, R&F, Vanke and Jindi, mainly providing matching wardrobes for high-end real estate. In this context, Sophia's bulk business income has rapidly increased from 7.3 million yuan in 2008 to 46 million yuan in 2012, and is expected to double this year. Hu Wei said: "Sofia's product line extension will enhance its growing 'ceiling', and the continued development of large customers may accelerate its revenue growth."
Consumption sinks into industry drivers
For the attractiveness of the custom wardrobe industry, Hu Yan bluntly said: "Long-term consumption upgrades, short-term look at real estate recovery."
According to the survey, consumers' purchase support rate for custom wardrobes is 40%, which is higher than 32% and 28% of finished wardrobes and wardrobes. “China’s first-time home buyers are in a low age group, mostly in the age of 26-30 years old. Therefore, the main furniture purchase groups are mostly '80s' and '90s'.†Hu Wei pointed out in the research report that “25— The 35-year-old population accounts for 59% of home buyers. These consumers tend to focus on their unique personality and taste, and custom-made wardrobes are well-suited for their needs, so they are very popular."
In Hu Wei's view, the segment of the custom wardrobe is able to surpass the industry growth rate because its space-saving and personalized features are more in line with the new needs of consumers.
“Because of the strong purchasing power and the fashionable concept of consumption, the first-tier cities have recognized and accepted the custom wardrobe brand. The growth of the industry in these years has mainly been driven by these regions. According to the survey of the Home Research Center, the acceptance of custom wardrobes in Beijing and Shanghai. The highest degree.†Hu Wei said, “But the demand for custom wardrobes in some second-tier cities and third- and fourth-tier cities has not been fully explored. It is expected that low-line cities will become important incremental markets in the future driven by consumption upgrades. ."
The competitive landscape is not fixed. However, China's custom wardrobe industry has only developed for more than a decade, and the internal competition in the industry is still in its infancy. The research report pointed out that the rapid growth of the custom wardrobe industry has attracted a large number of competitors to enter the market, resulting in a large number of SMEs, especially in the low-end market, product homogeneity is serious, the added value is not high, the competition is fierce, The competitive environment for high-end products is relatively loose. At present, the main custom wardrobe enterprises are concentrated in the four major regions of Guangdong, Beijing, Shanghai and Chengdu.
The first-line brands represented by Sophia, Hollywood and Europe are more well-known and the prices of products are relatively high. The second-line brands are mainly top-solid, Stanley and Federal Gordon; the third-line brands are mostly established after 2003, the price war It is a commonly used competitive strategy.
Hu Wei believes that with the maturity of consumer consumption concept, brand quality has become an important consideration for purchasing furniture. The future competition of the industry will no longer be limited to products and prices, but will be transferred to brand influence, R&D design. Capabilities and comprehensive service capabilities (including installation quality, delivery efficiency, etc.).
“In the short term, the growth rate of furniture sales is easily affected by the delivery of new buildings.†Hu Wei said, “As a durable consumer goods, furniture consumption is mainly driven by the demand for moving, so it is closely related to real estate sales, but furniture also has general consumer goods. Attributes, the purchase of furniture has increased with the increase of per capita income. Since 2010, real estate regulation has depressed the valuation of furniture companies, but since the second half of last year, real estate related indicators have improved. The macro policy will be maintained in the coming year. Stable, good growth in real estate sales may be a strong support for furniture sales."
“Sofia has fully enjoyed the rapid growth of the segmented industry. Based on the industry's first brand, fast-responding capacity layout and extensive dealer channel advantages, the company has gradually expanded its brand connotation from 'customized wardrobes' to 'customized homes'. Leading the industry, the performance in the next three years is expected to grow at an average annual rate of 33%." Hu Wei concluded.
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