At present, China’s home decoration demand is still concentrated at the C-end to a large extent.

According to the opening data of hardbound houses released by Ovi cloud, China’s hardbound houses opened 3.255 million units in 2020.

We divided the number of hardbound houses opened by Ovi cloud by the number of residential sales in that year, and concluded that the proportion of hardbound houses delivered in China’s annual sales of new houses continued to increase.

During the 35 years from 1986 to 2020, China has sold 18.771 billion square meters of residential commercial housing.

Since the relevant departments of the CPC Central Committee first put forward the concept of hardbound house in 1998, China’s hardbound house market has gradually developed.

The successive promulgation of the central government’s policy on fully decorated houses has also promoted local provinces and cities to attach great importance to fully decorated houses, and various provinces have also successively introduced local policies adapted to local conditions to promote the popularization of fully decorated houses to a higher degree.

The housing with 10-35 years of age mainly contributes to the demand for renovation and reinstallation, At present, about 13million new houses are sold every year in China.

The main group of furniture consumption in China is still huge.

The demand is still concentrated at the C-end to a large extent.

In the future, leading enterprises will emerge, such as the current precast decoration.

The large-scale and standardized production of the home decoration industry in the field of new houses will become a general trend, and the field of precast decoration is expected to be a big leader.

China’s urbanization is moving towards the process of big urbanization.

It is expected to continue to become the main force of China’s furniture consumption in the next decade, that is, the number of potential furniture consumers in China will maintain a high level in the next decade.

Among the new housing, the proportion of hardbound houses continued to increase.

In 2011, the 12th Five Year Plan for the development of the construction industry proposed to encourage and promote the menu style full decoration delivery of new indemnificatory housing and commercial housing.

（1） Tianshi: China’s urbanization is moving towards the process of big urbanization.

If we add the renovation needs of existing houses before 1986, the annual contribution of new houses to the decoration of existing houses is lower..

Assuming that about 25% of them are delivered by hardbound, about 10million new houses are actually delivered by rough houses with decoration needs, which is less than 1/6 of the existing houses with 10-35 years of age.

According to the data of the National Bureau of statistics and the world bank, China’s population density and urbanization rate are still in the stage of gradual increase.

Enterprises that can accurately improve customer acquisition efficiency and refine standardized delivery processes are likely to grow into giant enterprises with the help of digital means.

It can be concluded that the average household demand for furniture in China will be higher than that in Japan, South Korea and other countries in the future.

The continuous promotion of hardbound housing policy helps to increase the proportion of hardbound delivery.

From the experience of Japan and South Korea, this is an important macro background for the emergence of home decoration leaders.

Based on the data released by the National Bureau of statistics, we make a rough calculation.

There has been no decline in the average household area in Japan.

On the trend, the average household area of newly sold houses in China has increased in the past five years, from 104 square meters in 2014 to 114 square meters in 2019.

In 2020, the average sales area of new houses in the capital circle of Japan was only 66 square meters.

In 2017, the 13th five year plan for the development of the construction industry proposed that by 2020, the newly constructed fully decorated residential area should reach 30%, further putting forward higher requirements for fully decorated houses.

At present, multiple demand logics are driving the reform of China’s home decoration industry in parallel.

（3） Renhe: the real estate market in China’s first and second tier cities is becoming a market dominated by stock houses.

According to the birth population data published by the National Bureau of statistics over the years, between 1981 and 1997, China’s annual number of new births was more than 20million, and this group is currently between the ages of 24-40.

We believe that with the increase of the proportion of new houses delivered with fine decoration and the decline of house types, the large-scale and standardized production of the home decoration industry in the field of new houses will become a general trend.

From the perspective of average household area, the average household area in China is increasing, and the demand for follow-up home decoration is higher than that in Japan.

The use of full decoration in new housing has quickly become an industry consensus.

Precast decoration refers to a “decoration method of combining and installing factory produced interior parts on site by using dry construction method”, which can be roughly divided into several modules, such as wall system, ground system, ceiling system, overall bathroom, integrated kitchen, water and electricity system and others.

From the experience of Japan and South Korea, this is an important macro background for the emergence of home decoration leaders.

There is a rigid new housing pull brought about by population density and urbanization.

The assembly decoration disassembles the house decoration into multiple modules, and effectively solves the pain points of traditional decoration with the manufacturing mode of “factory production + on-site installation”.

Tianshi: China’s urbanization is moving towards the process of big urbanization.

In the period after this level of Urbanization rate, Japan and South Korea also had a situation of simultaneous rise in real estate sales and urbanization rate.

Lifting Socket

（2） Geographical advantage: the large-scale and standardized production of the home decoration industry in the field of new houses will become a general trend.

If the average household area is 100 square meters, about 188million units of housing will be sold, of which about 126million units will be sold within 10 years (2011 and later), and about 62million units will be sold within 10-35 years.

Geographical advantage: with the increase of the proportion of fine decoration in the delivery of new houses and the decline of house types, the large-scale and standardized production of the home decoration industry in the field of new houses will become a general trend, and leading enterprises will emerge in the future, such as the current precast decoration.

In 2019, China’s urbanization rate was 60.31%, which is equivalent to that of Japan in 1961 and South Korea in 1984.

At present, the average sales area of new houses in China is more than 100 square meters, while that in Japan is less than 80 square meters.

Renhe: the real estate market in China’s first and second tier cities is becoming a market dominated by stock houses.