Overview and Development Trends of the Whole-House Customization Home Furnishing Industry

Whole-house custom home furnishing refers to a customized service that designs, measures, produces, and installs home spaces based on the personalized needs of consumers. It covers furniture customization for various living spaces, from bedrooms and living rooms to kitchens and studies, including wardrobes, bookcases, cabinets, beds, sofas, and other furniture, as well as wall decorations, curtains, and other soft furnishings, striving to achieve a unified style and personalized needs in the home space.

(I) Overview of the Whole-House Custom Home Furnishing Industry

With the improvement of the customized home furnishing supply chain and the continuous maturity of information technology and design concepts, the whole-house custom home furnishing industry has emerged. Whole-house custom home furnishing provides customers with a complete set of personalized home customization through unified style design, space layout, function selection, and material selection. Compared with the traditional furniture industry, whole-house custom home furnishing is customer-centric, using all-inclusive service as its product concept, providing customers with a complete set of space configuration solutions. The whole-house customization business has just emerged in China, and its development has been very rapid, benefiting from factors such as the younger customer structure and internet home decoration.

Currently, the main participants in the whole-house custom home furnishing industry include three types of entities: internet home decoration companies, traditional home decoration companies, and customized home furnishing companies. Internet home decoration companies rely on internet platforms for self-operation, creating one-stop decoration platforms. However, due to their weak control over offline products and construction, they currently mainly operate as platform models; traditional home decoration companies rely on strong furniture manufacturing capabilities to launch integrated models, but due to the complexity of the entire process of whole-house customization and the high uncertainty in the construction process, their current development scale is relatively small; customized home furnishing companies rely on their complete product lines and customization experience in the customized home furnishing industry, and are developing the fastest in the whole-house custom home furnishing market, and are most likely to stand out from numerous market participants.

(II) Development Trends of the Whole-House Custom Home Furnishing Industry

1. Increasingly Higher Requirements for the Health and Environmental Protection of Interior Decoration Materials

With the improvement of people's living standards and the strengthening of health awareness, consumers' requirements for products are becoming more comprehensive. They not only need home products to be beautiful and durable, but also require them to be healthy and environmentally friendly. The concept of green homes is deeply rooted in people's hearts, and it is inevitable that the future of China's home furnishing industry will move towards green development and green consumption.

Decoration panels, as the main raw materials for home products, are continuously attracting the attention of consumers. The most important indicator for measuring the health and environmental protection level of decoration panels is the formaldehyde release amount, which is also one of the most important environmental protection indicators for home products. The environmental protection standard currently used in the industry is the national environmental protection standard E1 level, with a formaldehyde release amount of less than 0.124 mg/m³. Some companies have developed and optimized their production processes, and have developed their products towards the national environmental protection standards E0 level and even ENF level, with formaldehyde release amounts of less than 0.05 mg/m³ and 0.025 mg/m³, respectively.

In April 2014, the Ministry of Housing and Urban-Rural Development approved the release of the new version of the "Green Building Evaluation Standard." The new standard further regulates the market rules and competitive order of the green building industry and drives the entire industrial chain to achieve design and technological innovation. When consumers choose home products, health and environmental protection are gradually becoming the primary standard. Health and environmentally friendly materials determine a company's competitiveness in the market. Therefore, more and more interior decoration material companies have increased their R&D investment in the green and environmental protection aspects of their products, which has become an important development trend in the industry.

2. The Traditional Retail Market for Decoration Panels is Gradually Diversifying

In the past, furniture manufacturing relied on manual production or purchasing finished products from furniture factories, and decoration mainly relied on hiring small construction teams. This resulted in the retail market being the main source of income for decoration panel companies, which established brands and channels through exclusive store models or dealer models. With the rise of refined decoration and customized home furnishing models, the industry landscape has begun to change. The refined decoration model has transformed some of the retail market into the engineering market, allowing decoration panel companies to directly sign procurement contracts with real estate developers; the rise of the customized home furnishing model allows consumers to directly sign customized home furnishing procurement contracts with customized home furnishing companies, who then purchase raw materials from decoration panel companies. Therefore, the decoration panel market is gradually expanding from the traditional retail market to the real estate engineering market and the customized home furnishing market, and the industry is entering a stage of diversified development.

3. Increasing Popularity of Customized Home Furnishing Market

With the continuous deepening of China's urbanization process, the number of middle-class people is constantly increasing, and a growing number of high-end consumer groups are emerging. Residents' artistic aesthetic abilities are also constantly improving. More and more residents are beginning to pay attention to the overall living art of their homes. Because finished furniture is relatively mass-produced in terms of style and cannot achieve a unified style, it cannot meet the increasingly high aesthetic standards of residents. Therefore, when choosing furniture for home decoration, people are more willing to choose home products with a unified style, while also adding more independent creativity and characteristics. This has led to an upward trend in the demand for customized home furnishings.

As the post-90s generation gradually enters marriageable age, the main consumer group is gradually becoming younger, and their choices of home products are also becoming younger. Customized home furnishings have a great degree of freedom in terms of furniture style, material selection, and size, fully meeting consumers' individual and fashionable needs while ensuring the practicality and space utilization efficiency of the house, which has led to a continuous increase in the popularity of customized home furnishings.

4. Whole-House Customization Becomes the Mainstream Trend of Industry Development

Whole-house custom home furnishing provides customers with a complete set of space configuration solutions through unified style design, space layout, function selection, and material selection.

Compared with customized home furnishings, whole-house custom home furnishings emphasize a one-stop solution to all home decoration problems, making home consumption more convenient. As the pace of life in cities is becoming faster and faster, and the division of labor in various industries is becoming more and more refined, people do not have much time to purchase decoration and home furnishings separately. Whole-house custom home furnishings solve this problem well. Consumers only need to choose their favorite brand and style, and the rest of the process will be handled by the whole-house custom home furnishing company. At the same time, the whole-house custom home furnishing industry has achieved on-demand production. After consumers place an order, the company produces according to the order, effectively avoiding the problem of overcapacity in the industry, reducing wood waste, and benefiting environmental protection. Whole-house customization is gradually becoming the mainstream trend of industry development.

5. Rise of Advantageous Brands, Increased Industry Concentration

Currently, there are many decoration material and furniture manufacturing companies in China, and the industry concentration is relatively low. In the future, with the continuous development of the decoration material and furniture industry, the industry concentration will gradually increase. Advantageous brands with advantages in R&D, brands, and channels will occupy a dominant position. First, advantageous brands expand to the upstream and downstream of the industrial chain, ensuring the environmental protection and health of raw materials, thereby reducing enterprise costs; second, advantageous brands increase product quality through large-scale R&D investment to ensure the company's market competitiveness; in addition, advantageous brands establish efficient marketing networks to quickly bring high-quality products to the market to increase market share.

Therefore, brand companies will have advantages in products, costs, and marketing. At the same time, consumers are more inclined to choose brand products with a certain degree of reputation when consuming, which will lead to the elimination of more low-end companies, and high-quality resources will be concentrated in a few large companies and large brands, resulting in an increasingly high degree of brand concentration in the industry. With the continuous advancement of China's supply-side structural reform, the continuous improvement of environmental protection standards, and increasingly strict supervision and inspection, China's man-made board industry is adapting to the development trend, seeking endogenous growth momentum, and gradually shifting from total volume expansion to high-quality development with structural optimization.

6. Digitalization deeply transforms the industry, and informatization empowers the entire chain

Against the backdrop of the continuous deepening of digital transformation in the home decoration industry, leading enterprises are no longer satisfied with strengthening customer precision reach and design visualization marketing digitalization. They are gradually evolving to the integrated stage of construction quantity calculation, optimizing internal processes based on the integration of BIM, cloud computing, and Internet of Things technologies, and achieving collaborative development and efficiency improvement of the industrial chain. Digitalization has gradually covered the entire business chain of home decoration enterprises from customer acquisition and design to construction and after-sales service. Full-process digital construction with data + service closed-loop has become an inevitable trend.