The barrier to entry is low, the market has loopholes, and the decoration company has closed the consumer’s back pot.

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Recent Years Come, the Internet home improvement is prevalent, and behind all kinds of low-cost competition means, the potential risks are not small. The industry has sufficient cash flow to operate the decoration company as a financial institution. If the company is not honest, the owner faces double loss of decoration. Even if the company itself wants to operate in good faith, this model requires funds to continuously roll quickly, and accidentally there will be a problem of broken capital chains. This article interviewed the person in charge of the decoration company, the leaders of the industry association and the decoration customers and other aspects of the crowd, in-depth discussion of the Internet decoration problems?

& ldquo; just finished the wall, the project manager told me The company married …… Mr. Lin signed a contract with Guangzhou Green Decoration Design Engineering Co., Ltd. (hereinafter referred to as “greens decoration”), paid 80,000 yuan, did not expect workers to enter the venue less than 1 month, met When it comes to such a thing, it is understood that there are nearly 100 consumers with the same experience as Mr. Lin.

The person in charge of the Green Decoration Company said in an interview with the media that the company could not continue to operate because of the break of its parent company’s apple decoration capital chain. At present, apart from consumers, project managers, suppliers and company employees have suffered different degrees of loss. According to estimates, the total loss of consumers is roughly 5 million yuan. Mr. He was the project manager of Mr. Lin’s home decoration. At the same time, he undertook the other four projects of green decoration. The five construction sites were started at the same time, and lost more than 300,000 yuan. Mr. Liu, the head of Guangzhou, a supplier of cabinets for green decoration, said that they have been in arrears for five months.

The closure of the decoration company is not a case.

In recent years, the news of the closure of the decoration company is not uncommon. Not long ago, many stores on the No. 1 home network closed, and the single store owed a million yuan. According to the report of Hubei Daily News, there are currently more than 4,000 registered decoration and decoration companies in Wuhan. Each year, there are nearly a thousand closed down due to poor management, and the elimination rate is as high as 30%.

“The decoration industry should not be a high failure rate industry. Ni Ankui, executive director of the Guangzhou Building Decoration Industry Association, said, “In the decoration industry, consumers will pay a deposit, and will pay a certain amount of advance payment according to the progress of the project. The construction team must get the project from the decoration company, but also pay a certain amount. The quality deposit does not require the renovation company to have too much of its own funds. The closure of the decoration company is not because of the strength, or even because of the technology and technology, but the issue of integrity. The decoration company has a broken capital chain. The main reason is that the boss has a problem, for example, the volume is running.

The entry barrier is low and the market has loopholes

Senior industry insider Mr. Liu believes that there are certain market reasons for the closure of the decoration company. “The entry barrier for the decoration industry is too low. A few people can join together to set up a decoration company. Now the cost of applying for a business license is low. The rent is slightly higher, but rent a small shop and spend tens of thousands of yuan for simple decoration. It is possible to open a store, which may be less than the startup funds of many consumers to the decoration company. Due to the lack of supervision, it is easy for people to fish in troubled waters. Moreover, many consumers choose to decorate the company simply by price. It is easy to fall into the trap of low price. Therefore, the phenomenon of fraud in the name of the decoration company has occurred.

Mr. Li, who runs a small construction team, said that in order to receive the project, the construction team needs to pay a certain quality deposit for the decoration company in addition to the material and labor costs required for the construction. Generally, a business must be given a few thousand yuan. After receiving the business, the decoration company can collect money from both the consumer and the construction team. The financial pressure is not great.

Pattern marketing, there are risks behind it

In recent years, the Internet home improvement is prevalent, and the potential risks behind various low-cost competition methods are not small.

There are some decoration companies that have launched a marketing model of “renovation rebates”. The so-called “renovation rebate is actually a one-time full payment when the contract is signed by the consumer. After completion, a certain percentage of the rebate can be obtained. If the payment can be realized, it is indeed cheaper than many mainstream home improvement products on the market.

But for the decoration company, because the profit of the decoration industry is already thin, and the decoration is returned to the consumer in a certain proportion, which means that the home improvement company has to bear the financial risk. It is understood that from last year to now, the country has a real decoration, Jiu Niu decoration and other decoration companies experienced a “closed storm,” the creation of decoration is to take this “decoration rebate mode.”

For consumers, the risk of renovation rebates is obvious. Because once the payment is made in full, the consumer basically loses the initiative, and it is difficult to grasp when the construction, construction quality and materials are good or bad. If the completion of the project is nowhere in sight or if the decoration company goes bankrupt, not only will the money be returned, but even the decoration will be ruined.

Some emerging home improvement companies or Internet companies have also launched the banner of “free decoration” and launched a fund pool game similar to the financial industry. The owner pays about twice the price before the renovation. After the completion of the project, the construction funds will be returned on schedule, and will be returned in about 5 years.

Mr. Liu said: “Their profit model is not based on earning the difference itself, but on the sufficient cash flow in the industry, and the decoration company as a financial institution to operate. If the company is not honest, the owner Faced with double loss of decoration. Even if the company itself wants to operate in good faith, this model requires funds to continuously roll quickly, and accidentally there will be a problem of broken capital chains.

Internet decoration, easy to go problem

How toAvoiding the dilemma of home improvement company closures and renovations? Ni Ankui said that in fact, the local decoration enterprises in Guangzhou are generally good, such as Guangzhou Star Arts, Chinatown, Samsung, and Home Furnishings, etc., the possibility of a capital chain break is small. “When consumers choose a decoration company, they try to choose a well-known local brand, knowing the roots and having a sense of security. Probably well-known and unknown decoration companies are looking for construction teams outside, but the contract is for well-known decoration companies. Once quality problems occur, you can find people in well-known decoration companies.

Ni Ankui believes that many consumers are now eager to get cheap, and the Internet home improvement company that they are looking for has no stores in the local area. The two sides do not fully understand, but the projects undertaken by Internet companies are also subcontracted. In some cases, the supervision of subcontractors is not enough. Generally, the construction unit gives the Internet company a guarantee of 50,000-100,000 yuan, and then there is no more management. Even if the company does not fail, once there is a quality problem, you have to The cost of claiming off-site is too high.

In addition to finding a relatively reliable decoration company, Ni Ankui suggested that it must sign a contract with the decoration company instead of signing a contract with the construction team. The local well-known company headquarters in Guangzhou, can not run, the cost of rights protection is low. Moreover, the project money must be paid in batches according to the progress. Do not pay for the project in a lump sum, so as to avoid problems such as difficult to monitor the quality of the project.

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