Stimulating consumer potential has been one of the main themes of China's economy in recent years. As one of the "big four" consumer sectors, alongside automobiles, appliances, and dining, home furnishing consumption has also become a key area of focus for policies aimed at restoring and expanding consumption this year. Innovations and trends showcased at the Shanghai Home Furnishing Expo highlight what are the current development characteristics of home furnishing consumption.

Projected to Exceed 5.3 Trillion Yuan by 2027

Pan-home furnishing consumption demonstrates strong growth elasticity The "2024 China Home Market Consumption Insights" report (hereinafter referred to as "the report") focuses on the Chinese home industry. Based on thorough research of the market background and current consumption status, it explores from both the supply side and the demand side of home consumption in the new era. The core touchpoints of home consumption and the current operational status and development paths at the industry supply level are deeply analyzed. Key insights from the Shanghai Home Furnishing Expo are included to forecast future trends in home consumption, thereby predicting development opportunities. The report's statistics on the home consumption market show that pan-home all-channel sales reached 4.6 trillion yuan in 2023 and are projected to exceed 5.3 trillion yuan by 2027, demonstrating strong growth elasticity driven by the release of existing housing demand and innovation in smart home categories.

This judgment is based on a reasonable forecast under the current background and status of home consumption insights: On the policy side, recent real estate incentives and pro-home consumption policies have jointly promoted the healthy development of the home industry; on the industrial side, growth in improvement needs in the existing market provides new momentum; on the demand side, the urbanization rate in regions with lower economic development levels shows a good growth trend, with some incremental housing demands yet to be released. Meanwhile, the growth in demand for second-hand homes and old home renovations is gradually leading the home decoration and furnishing market into an era of existing inventory. At the recent Shanghai Home Furnishing Expo, it was noted that consumers are increasingly willing to invest in a high-quality living environment. As users trend younger, channels are also diversifying. Additionally, one-stop services have become the choice of mainstream consumers in home decoration and furnishing, and the integrated decoration model has great potential, further stimulating the growth potential of the home consumption market.

Core Channel Merchants Lead Industry Innovation and Development

Based on changes in end-consumer demand, the home market demonstrates strong developmental resilience, and innovation on the supply side also needs to adapt accordingly. The report analyzes the home consumption supply side, noting that the home industry chain and consumer pathways are lengthy and complex, with highly fragmented traffic. At this point, channel merchants that are closer to consumers and have the ability to leverage traffic aggregation empower the entire industry chain, thus occupying a core position in the discourse.

On the home consumption demand side, the report analyzes from the user's perspective, covering consumer motivation, consumption and replacement demand, pre-sales channel understanding, consumption decision-making pathways, and the entire process of delivery and after-sales. The most obvious characteristics are: consumers access information through increasingly diverse channels, the decision-making period has lengthened, engagement is higher, and demands for products to be green, smart, personalized, and aesthetically pleasing are continuously increasing. Notably, although diversified products, humanized services, and smart real-life experiences gradually increase consumer satisfaction with home products, related pain points are still not well addressed, such as the complexity of information in the home decoration and furnishing industry, high professional barriers and potential rework costs, which greatly reduce consumer purchasing efficiency, and the industry's after-sales service urgently needs to evolve further towards standardization and long-term direction. From an operational perspective, professional and differentiated services have not fully met the growing consumer demand, highlighting the advantages of home furnishing stores that cover the entire process from purchasing to after-sales.

Looking to the future, the trends in home consumption are as follows:

· Consumption demands for quality, green, personalized, smart, and international home products will drive industry development;

· Home retailers extending product categories and service formats, with industry concentration expected to further increase;

· Home furnishing stores enhancing operations through value sharing and close merchant connections;

· Digital transformation of home retailers empowering the entire industry chain, leveraging operational capabilities to enhance retail value-added.

Source: Tencent News

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