Flooring market or will usher in resource restructuring

Recently, the Red Star Meikailong wholly-owned acquisition of the industry's third-largest JSWB event has attracted the full winds and storms, to a certain extent, this is also a strong and powerful case. This incident is also considered to be the largest industry consolidation in the history of China's home furnishing industry, and it also brings some new thinking to flooring companies.

Powerful joint reorganization of resources Redstar Meikailong stressed that this acquisition and future A-share listing are all based on the long-term strategic development needs of the group. Acquisition is a normal behavior of the company's operations and is not directly related to the listing. As we all know, the positions of Red Star Macalline and Jisheng Weibang are not the same. The Red Star Macalline has 125 stores in more than 90 cities across the country and is the single largest home shopping mall.

The Jishengweibang positioning high-end, settled businesses are almost all the first step of the home industry ladder brand. In addition, JSWB’s expansion was slow. When all home chain stores expanded, JSWB’s speed of opening stores did not increase. The main stores were still located in major cities such as Guangzhou and Shanghai.

Red Star’s acquisition of Jisheng will, on the one hand, improve the corporate layout and expand its market share; on the other hand, Jisheng’s “Furniture Village” model will also greatly increase the profitability of Red Star. In terms of consumer goods in China, the level of logistics costs is the main factor affecting the prices of consumer goods. The Jisheng model greatly narrows the distance between factories and sales, and can significantly reduce logistics costs. The flooring industry must also have some unique enterprises in production, logistics, operations, etc. If they can effectively cooperate with other companies in the industry, they may also open up new situations.

M&A Resource Integration Expansion Under the background of sluggish consumption and excess industry, the entire home industry began frequent mergers and acquisitions, and the degree of concentration will increase. Although the home industry has not seen major merger cases so far, the competitive landscape of the entire home industry has become increasingly fierce since last year. In particular, the industry reshuffle has increased in the second half of last year, and many stores and distributors have gradually begun to cooperate and complement each other. It can be foreseen that the case of strong alliances in the future will inevitably appear in the market.

It is understood that there have been a few cases of bankruptcy restructuring and mergers and acquisitions in the home industry. The scale effect of Red Star Macalline and JSWB will squeeze the living space of other home building materials channel providers, and the follow-up home industry competition will be concentrated among domestic brands. The development of the Red Star Macalline has jumped out of the previous idea of ​​the expansion of the staking area. After the completion of the acquisition, in addition to increasing the product line and increasing the bargaining power of the suppliers, it is also possible to increase the value of commercial real estate through the improvement of operational capabilities.

For the flooring industry, you can also see some development implications. With the intensification of competition in the industry, some small and medium-sized floor companies can also try affiliate marketing, or mergers and acquisitions, or integration to gain more room for development.