Home Observation | “Old for New” extends to the home improvement field, what new opportunities does it bring to the industry?
2024-08-17
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The policy of exchanging old items for new items has been implemented again, and the home improvement industry has ushered in a new round of benefits. Recently, the Beijing Municipal Housing and Urban-Rural Development Commission and other 8 departments issued the "Work Plan for Actively Promoting the Exchange of Old Products for Home Improvement", which mentioned that by building an integrated home improvement platform and other means, it will guide home improvement companies to provide diversified products and personalized services to meet the diverse home improvement consumption needs, stimulate consumption potential in the home improvement field, and promote the exchange of old home improvement consumer goods.
In March this year, the "Action Plan to Promote Large-Scale Equipment Renewal and Consumer Goods Trade-in" and "Action Plan to Promote Consumer Goods Trade-in" and other policies were implemented one after another. After that, many home furnishing companies such as Red Star Macalline, Easyhome, and Xilinmen took quick action and continued to carry out trade-in through the issuance of subsidies and consumer coupons. This favorable policy extends to the home improvement field, bringing new development opportunities to the industry.
Experts believe that the replacement of old home decoration with new ones has a significant driving effect on the development of existing real estate. At the same time, home decoration itself is an industrial chain of the "big home" concept. The chain is very long and will also drive the development of multiple industrial chains.
Promote the replacement of old for new in home decoration
At the end of July this year, Beijing Municipal Housing and Urban-Rural Development Commission and eight other departments issued a notice on the issuance of the "Work Plan for Actively Promoting the Replacement of Old Home Furnishings for New" (hereinafter referred to as the "Plan").
The "Plan" proposes that the Beijing Municipal Housing and Urban-Rural Development Commission take the lead in formulating a work plan to actively promote the replacement of old home decoration with new ones, and clarify the division of responsibilities of each unit.
The Beijing Municipal Bureau of Commerce, in conjunction with the subsidy policy to encourage the replacement of old green smart consumer products with new ones, has included green smart products such as home improvement building materials, home appliances, and home furnishings that meet energy efficiency (water efficiency) standards into the scope of policy subsidies. Enterprises are encouraged to innovate and create experiential exchange home consumption scenarios, launch online home improvement model rooms, and promote model rooms to enter the platform.
District governments will increase publicity and guidance on home decoration policies for residents, and guide residents to choose environmentally friendly, low-carbon, and energy-saving products and services, thereby expanding green and smart consumption. Residents are encouraged to carry out partial renovations such as renovation of old houses, kitchens, bathrooms, doors and windows when renovating old residential areas. Support communities to integrate community resources and provide venues for model rooms. Strengthen decoration service management, supervise property service personnel to fulfill their decoration management responsibilities, speed up the registration procedures for decoration, and provide convenience for decoration vehicles and waste material recycling vehicles to enter and exit the community.
The Residential Industry Branch of the China Construction Association and the Beijing Building Decoration Association have built an integrated home decoration platform with the help of the association's website, WeChat public account and other media, and selected excellent home decoration companies for reference by residents. Carry out activities such as the Home Decoration and Home Appliances Consumption Festival and Love Home Decoration, and guide companies to take discount promotions, replacement subsidies and other methods to actively promote home decoration consumption. Form a team of industry experts to provide free home decoration renovation plans for consumers with home decoration needs, explain home decoration precautions, and solve the worries of decorators. Formulate industry standards based on the scale, products, services and other aspects of the enterprise, and guide enterprises to strengthen internal training and improve product and service quality based on the standards. Establish a diversified and innovative mechanism for mediating consumer disputes and contradictions in the home decoration field, correctly guide consumers to protect their rights, and effectively improve the resolution rate of home decoration claims. The Residential Industry Branch of the China Construction Association has issued a series of "Guidelines for the Renovation and Reconstruction of Old Houses", which will be distributed to consumers by streets (townships) and communities to enhance consumers' awareness of the necessity of renovating old houses and increase their enthusiasm for renovating their own houses.
Home improvement companies should launch home improvement solutions suitable for different families and housing types, and provide affordable products and services. Strengthen cooperation with financial institutions, jointly carry out "home improvement festival" activities, and jointly launch low-interest installment promotion activities. Innovate and upgrade the integration of home improvement, home furnishing, home appliances and whole-house smart formats, and integrate diversified product display, personalized design services, decoration and construction services and after-sales services into one consumer scenario, and launch a complete set of whole-house smart home products to meet the diverse home fashion consumption needs.
The old-for-new policy continues to be implemented, which is good for the home furnishing industry
Over the past year, favorable policies for old-for-new exchange have continued to be implemented in the home furnishing sector.
In July 2023, the "Notice on Several Measures to Promote Home Consumption by the Ministry of Commerce and 13 Other Departments" was issued, which mentioned that it is necessary to organize home renewal activities, encourage regions with conditions to introduce targeted policies and measures, guide enterprises to improve the quality and level of home consumption supply, provide more high-quality, personalized and customized home products, increase preferential policies, and support residents to replace or purchase green smart home products and carry out old house renovation.
In March this year, the State Council issued the "Action Plan for Promoting Large-Scale Equipment Renewal and Consumer Goods Trade-in", proposing "carrying out trade-in of household appliances" and "promoting trade-in of home decoration consumer goods". In terms of trade-in of home decoration consumer goods, the government supports residents to carry out partial renovation of old houses, kitchens and bathrooms, and continuously promotes home-based aging-friendly renovation, and actively cultivates new consumption such as smart homes. Promote home decoration model rooms to enter shopping malls, communities, and platforms, encourage enterprises to create online model rooms, provide affordable products and services, and meet diversified consumer needs.
Subsequently, the Ministry of Commerce and 14 other departments issued a notice on the issuance of the "Action Plan for Promoting the Replacement of Old Consumer Goods for New Consumer Goods", and carried out the replacement of old automobiles and home appliances and the "renewal" of home kitchens and bathrooms across the country. In terms of promoting the "renewal" of home kitchens and bathrooms, we will expand the renovation and transformation of existing houses as a starting point to promote the replacement of home kitchen and bathroom consumer goods, promote smart home consumption, and continuously release the potential of home consumption. It is mentioned that new growth points for home furnishings should be cultivated. Promote the implementation of smart homes in more life scenarios such as smart kitchens, healthy bathrooms, home security, and elderly care. Continue to carry out pilot projects for digital home construction. Accelerate the production, certification, promotion and application of green building materials, and comprehensively carry out green building materials going to the countryside activities. Encourage enterprises to innovate and create experiential interactive home consumption scenarios, launch online and offline home decoration model rooms, and promote model rooms into shopping malls, communities, and platforms.
The industry believes that home furnishing consumption involves many fields, long upstream and downstream chains, and a large scale. Trade-in is an important part of achieving high-quality development of the home furnishing industry, and is also conducive to driving residents' consumption growth and economic recovery.
Qin Zhanxue, president of the China Building Materials Distribution Association, said in an interview with the Beijing News that the Third Plenary Session of the 20th CPC Central Committee made important arrangements for further deepening reform and promoting Chinese-style modernization. The CPC Central Committee and the State Council issued the "Opinions on Accelerating the Comprehensive Green Transformation of Economic and Social Development", and the Beijing Municipal Housing and Urban-Rural Development Commission and other 8 departments jointly issued the "Work Plan for Actively Promoting the Replacement of Old Home Improvement for New Home Improvement". It happened against such a big background, "Replacement of old home improvement for new home improvement is a specific implementation plan of the grand strategy, which not only promotes consumption, but also realizes circular economy and green and sustainable development."
The market for renovation of old houses and partial renovation is promising
Amid a series of favorable policies, home furnishing companies are taking active action.
In May this year, Beijing Red Star Macalline launched the "Green Chaoyang·Trade-in and 51 Promotion"; Qumei Home Furnishing launched the "2024 Qumei Home Furnishing Renewal Event"; JuRan Home stated that in 2024, it will fully promote the three major IPs of "Trade-in of Furniture and Appliances", "New Look for Old Houses" and "Look for JuRan if You Have Difficulties at Home", driving the rapid growth of the main home furnishing business sales. In June, Red Star Macalline and Xilinmen jointly launched a national 100-city soft bed mattress trade-in campaign, aiming to serve 20,000 households across the country within the year. As a joint action partner, Xilinmen announced the launch of three major measures for trade-in, with 1 billion yuan of "renewal" consumer coupons, focusing on free collection of old items, no restrictions on brands, and no restrictions on years. The two sides jointly launched a combination of trade-in to open up the stock market.
The Internet home improvement platform Tubatu has made efforts in implementing the old-for-new policy for home appliances. Based on the actual situation of the platform and the participation of home appliance partners, Tubatu has researched and issued a set of implementation plans for the old-for-new policy for home appliances on the platform. It will rely on the platform's "Home Furnishing and Building Materials Mall" system to open this function for users, and has now entered the feasibility implementation stage.
Zhang Dong, marketing director of Fanke Group, mentioned in an interview with the Beijing News that home improvement companies, as providers of overall solutions for decoration, do not sell single products, and the narrow sense of old-for-new is more for home products, so the direct impact of the policy on decoration companies is limited. The broad sense of old-for-new can include the renovation of old houses, which is where decoration companies can make efforts. With the help of relevant national policies, consumers can be actively guided to renovate old houses and improve the living environment.
Zhang Dong revealed that Fanke Group has always focused on the renovation of old houses. Currently, the renovation of old houses accounts for 80% of Fanke Home Furnishing. Fanke Home Furnishing mainly promotes consumption through cost-effective whole-house products and joint profit-sharing promotions with manufacturers. For example, it has newly launched the F1 Premium Edition and F3 Smart Edition whole-house products, which allow customers to easily move in with just their luggage.
In response to the renovation needs of old houses, Fanke's sub-brand Fanke Micro Decoration specializes in providing partial renovation services for kitchens and bathrooms as well as wall renovation services, which can allow consumers to improve their home living environment with less expenditure and cater to the consumption trend of replacing old with new. Zhang Dong said that the demand for partial renovation is relatively strong at present.
How can home improvement companies seize the opportunity?
Qin Zhanxue, president of the China Building Materials Distribution Association, believes that the old-for-new home improvement program has a significant driving effect on the development of existing real estate. At the same time, home improvement itself is an industrial chain of the "big home" concept, with a very long chain, which will also drive the development of multiple industrial chains.
How should relevant enterprises seize this opportunity? Qin Zhanxue said that first, they should deeply understand the strategic intentions of the CPC Central Committee and the State Council; second, they should work hard to come up with green development plans that can be accepted by consumers, so as to lead green consumption; they should actively contact local governments to obtain support, and also tap the inherent potential of enterprises, benefit the people, and try first to seize the opportunity.
Zhang Dong mentioned that the industry should improve the living environment and drive the development of related industries through home furnishing consumption under the impetus of policies such as old-for-new. "The current urgent task is to deeply stimulate consumer willingness and form a broader consumer consensus through policy support, corporate response, and public opinion guidance. At the same time, it is necessary for decoration companies to grasp the trend, follow the trend, solve consumer pain points, and provide targeted "replacement" solutions for consumers. If the concept of replacement can be more deeply rooted in people's hearts, the home improvement industry is also expected to usher in new development opportunities."
Beijing News reporter Zhang Jie
Editor: Wang Lin
Proofread by Mu Xiangtong
