A few days ago, Ali moved the equity of 7 listed companies in one go, causing an uproar in the market. Among the 7 companies, including the "former first brother" and "current first brother" of the home furnishing store, Red Star Macalline and Actually Home.
If it weren't for the equity transfer of the Ali system, it would be difficult for the outside world to find that the Ali department, as a major online Internet manufacturer, used to be so fond of the home furnishing companies that did the business of offline home furnishing stores.
Some analysts believe that this aspect is intended to split the main business such as e-commerce and investment business more finelyOn the other hand, it may also be estimated that the current home furnishing store track is beginning to face pains and has to be laid out in advance.
Fan Xueyou, founder of Haojia.com and an expert in home furnishing store marketing empowerment, pointed out that the root cause of the decline in home furnishing store revenue is not only the impact of the economic environment and the evolution of the peripheral traffic ecology, but also the convergence of the nature of the store and the excess number of stores and the excess area of single stores.
Behind the excess, there is the pull of the real estate bubble, and at the same time, there is also the blind expansion of the head stores fueled by capital. Therefore, if you want to break the situation, the entire industry will inevitably experience pains. Fan Xueyou said.
Bet on the five trillion home consumer market.
The layout of Ali's department in the home furnishing track can be traced back to 2010 - * launched the vertical platform home improvement hall. After that, in order to rapidly expand the home furnishing business, Ali began to gradually deepen its layout in home decoration and home furnishing tracks. It has successively invested in the installation service platform "Shengong 007", the lighting service provider Jiangduoduo, the software technology provider of the home improvement industry, Sanweijia, and the home furnishing store Actually Home and Red Star Macalline.
However, judging from the final results, Ali's investment vision for the home improvement track is not accurate. For example, in the installation of the service platform, Ali missed "Luban to Home" and "Master Wan". At the same time, in the home improvement software track, the more high-quality investment target "Kujiale" was not included in Ali's pocket.
Around 2021, while building a complete design and home improvement ecology, Alibaba launched its own home installation brand "Lie Ping" (later renamed "Every Flat Every House"), and directly operated the selected home furnishing brand HomeArch. "Lying flat" has been tepid, and the HomeArch Chongqing Starlight 68 Square store, which was built with a lot of money, announced the end of the HomeArch business line with the embarrassing ending of "one year of renovation and half a year of opening".
In the eyes of industry analysts, the root cause of Ali's many failures in investing in the home furnishing track is that Ali does not understand the home furnishing industry.
The underlying logic of Alibaba's investment in Red Star Macalline and Actually Home is that home furnishing stores, which rely heavily on experience, are the best scenario for landing new retail.
Ali hopes that while taking a stake in the leading home furnishing stores, it can promote the digital transformation of offline stores, and then open up online and offline, use online traffic to empower offline home furnishing stores, and at the same time can rely on the dominant position of the leading home furnishing stores to obtain accurate traffic under the **, and feed back Ali's online home furnishing business, and then help Ali face the huge potential home consumption market of 5 trillion yuan, and can quickly build a dominant position at the entrance level.
But what Ali didn't see was the uniqueness of home consumption. At the same time, it did not predict the evolution of the online traffic ecological pattern after 2018-2019, as well as the earth-shaking changes that will occur in the entire pan-home industry.
The complete household consumption chain includes design, material selection, construction, distribution, installation and after-sales, which must be a combination of products and services, not simply "buying" and "selling". Ali does not have the right to speak to lead the direction of accurate traffic, and the right to speak is still in the hands of home improvement companies and offline store shopping guides who have the leading power of design and experience. At this level, Alibaba's original efficiency model has failed. This means that it is difficult for Ali's online home improvement traffic to be used as an increment to empower offline.
At the same time, in the past five years, Ali's ** traffic grabbing has been encroached upon by Douyin, JD.com, Pingduoduo, Meituan, Vipshop, as well as Tuba Rabbit, Qijia.com and other multiple lines, and the absolute dominance of online traffic entrances has also been unprecedentedly challenged. After joining hands with Alibaba, the online business of Actually Home once skyrocketed at special nodes such as Double 11, but the upward online traffic from Ali was not enough to hedge the rapid decline in offline traffic of home furnishing stores and the overall decline in the profitability of the entire store.
After 2018, with the transformation of the upper and lower halves of the industry, as well as the rise of whole-packing, handbags and whole-home customization, traditional home furnishing stores have been intercepted by whole companies, real estate developers, full-case designers and head custom home furnishing companies, etc., and the offline traffic ecology of the entire home furnishing store has suffered a heavy blow, and triggered a cliff-like decline in the overall performance of home furnishing stores.
According to the financial report data, in the first three quarters of 2023, Macalline's revenue will be 867.5 billion yuan, down 17 percent year-on-year25%, net profit -5600 million yuan, down 142 percent year-on-year53%。The operating income of the house in the first three quarters of 2023 is about 97400 million yuan, a year-on-year increase of 333%, but net profit attributable to shareholders of listed companies 11500 million yuan, down 2499%。
Investing in two major home furnishing stores has suffered heavy losses.
In the context of betting on the failure of the 5 trillion potential home consumption market, the "blood loss" of investing in the two leading stores has become the most "eye-catching" of its many investments.
In 2018 and 2019, Ali successively obtained contracts from Home and Macalline through investment and subscription of exchangeable bonds7% of the shares, with a total consideration of more than 11 billion yuan.
Five years have passed, and the Ali system has not only failed to achieve its original wish, but also a loss-making transaction from the perspective of floating profits.
In the past five years, the Ali network in the Ali system has invested a total of 356.5 billion, and the total consideration for the transfer of Ali's shares in the house to Hangzhou Haoyue is 204.8 billion yuan, even with the addition of the 27.7 billion dividends, the return amount of Ali is also far from its principal.
Comparable to the home of the Actually Family, Ali was originally 43600 million yuan of **, subscribed to Macalline's exchangeable bonds, and owned the latter 137% of the shares, but today only 105.2 billion yuan of **, the transfer of Macalline's 57% equity, transfer** significantly shrunk.
According to incomplete statistics from relevant institutions, Ali is the equity of 7 listed companies that have been vacated this time, and the losses are huge. Among them, in particular, the investment in the two major home furnishing stores suffered the most losses.
It is understandable to divest the loss-making investment business from its main business, but five years have passed, why did Ali change its mind about the home and Macalline and no longer regard them as "Britney"?
Some veterans who have been tracking the furniture market for a long time believe that after being stripped from the main business, as a non-core asset, whether it can still get the blessing of online traffic from Ali will be marked with a question markAt the same time, superimposed on the current market conditions of home furnishing stores, Ali's investment in the two leading home furnishing stores may still shrink.
Even if there are unfavorable factors, Ali still chooses to move at a loss, or it is not unrelated to the dismal fundamentals of the current home furnishing market.
The excess pain of home furnishing stores may just start.
According to incomplete statistics from Blue Whale Finance, since the beginning of 2023, at least 50 home furnishing stores have closed down across the country. At the same time, from time to time, news of brand dealers running away has been exposed, involving well-known brands such as Gold Medal, Gujia, and Rabbit Baby.
At the same time, Blue Whale Finance visited the offline furniture market in Guangzhou and found that more than one home furnishing store was exposed to the monthly revenue of some dealers with a single store of less than 10,000 yuan, and the store may be abandoned at any time. Some merchants said, "The longer you open, the more you lose." ”
In the three years of the epidemic, many home furnishing dealers have been in a state of loss. Originally, it was expected that the spring of home consumption recovery would be ushered in after the epidemic, but in the end, most dealers found that this year's business was not only not as good as before the epidemic, but even during the epidemic.
In addition to the suffering home furnishing dealers, large and small home furnishing stores are also looking for self-help and a way out. Red Star Macalline and Actually Home have successively introduced state-owned assets in the form of equity transfer. The home has recently officially announced that it will replace rent collection with dividends, which has aroused heated discussions in the industry. In the eyes of industry analysts, this move is not like a broken arm to survive, but more like a battle against the water.
Compared with the head home furnishing stores, the life of some regional home furnishing stores may be more difficult.
The person in charge of a home furnishing store in Guangzhou revealed that the store he operated was only 4-5 shops away from breaking the break-even point. To put it simply, at the end of this year or after the end of next year, if 5 dealers abandon or withdraw from the store, the store will close after the lease expires. Because in the current market environment, if the old dealer withdraws the store, it is difficult to find a new dealer.
In 2023, closed stores, dealers who ran away, and senior professional managers who frequently left their jobs are the epitome of the bleakness of the home furnishing industry. However, there are signs that a new pain may be just beginning for home furnishing stores.