Although the business world is fickle, there are few highly dramatic cases like the Oriental Home. Recently, some Jinan citizens broke the news that the roof of the Qixian store of the Oriental Home Building Materials Supermarket suddenly hangs on the investment advertisement of Jinan Hualian Supermarket. Surprisingly, the situation of this once-popular and the largest chain building supermarket in China will be forbidden. A lot of curiosity and doubts.

The Economic Reporter’s investigation found that the Oriental Homeland is now not only in the Jinan, but also in the country’s more than 20 chain stores. Behind it, it not only shows the impact of the continuous regulation of the property market on the home building materials industry, but also reflects the objective problems of blind expansion of the domestic building materials and home stores in recent years, poor management and management.

Good view no longer

On the morning of the 22nd, the reporter came to the north side of the West Campus of Jinan University in Nanxinzhuang West Road. Next to a large-scale Hualian Supermarket, a huge red building appeared cold and clear. This is the former Oriental Homeland Jinan Seven. Xiandian. The top of the building is prominently positioned, and the two large banners are eye-catching: “Jinan Hualian Supermarket is strong, please stay tuned”, “Investment: Gold Jewelry, Clothing Glasses, Video Game City, Cinema...”

The reporter found that a supermarket door was not locked, but it was empty, and the original decoration layout was dismantled. “This store was closed in August last year. It is said that the stores in the country are basically closed. Hualian’s investment has recently started. We are renovating Hualian, and it is estimated that it will open in August next year.” The worker of the supermarket work card said. The reporter of the Herald then verified with Mr. Fu, the manager of Hualian Supermarket, and Zhang Dongzheng, the manager of the procurement department, confirming that the above-mentioned workers were vocal.

It is understood that the Oriental Home Qixian Store opened in 2002, and another store near Honglou opened in 2010. At the beginning of its opening, the momentum was not small, but it only closed after two years. At present, although the Oriental Homes Qixian Store does not sell furniture and building materials, the property is built by them. It coincides with the need for Hualian Supermarket to expand the storefront, and the two sides have reached an agreement.

"When we first moved in, we were also booming for a while. Later, the business became worse and worse, and even started to lose money. It is estimated that there are not many people who are willing to stay there," Jinan Yilifu Furniture Co., Ltd. Jinan Sales Department Ding Aiju, the person in charge, said, "My furniture in the Oriental Home has now moved to the East Asia Mall."

According to public information, Dongfang Jiayuan Building Materials Home Chain Supermarket is a national supermarket with large chain storage building materials invested by Dongfang Group (6.23, -0.01, -0.16%). Founded in 1999, Oriental Homeland has played the role of unified procurement, unified management, daily parity, one-stop shopping, free purchase, free return, to distinguish it from the traditional building materials market, just a few years in Beijing, Chongqing, In 17 cities including Changchun, Shenyang, Harbin, Chengdu, Hefei, Jinan and Dalian, 26 stores were opened. However, just as the peers followed the development of this “building super giant”, the Oriental homeland gradually lost in the round after market reshuffle. The performance was reduced from 70 million yuan in 2008 to The loss has exceeded 100 million yuan in successive years.

To make matters worse, when you were struggling to survive in the homeland of the East, you were faced with a national store closure. First, its only Xi'an store closed in September 2012. Later, on December 28, 2012, its two stores in Chengdu were suddenly suspended. Just entering 2013, in the base of the Oriental Homestead in Beijing, only five stores suddenly suspended business, and were angered by employees, suppliers and consumers, the company instantly fell into the "crash" rumors.

Reshuffle

For the defeat of the Oriental Homeland in Jinan, Ding Aiju bluntly said that "the climate is a big climate, and there are more porridge." In her view, from the end of the last century to the beginning of this century, China's real estate industry developed at a high speed, and the demand for building materials and furniture continued to rise. The building materials and furniture market, large and small, were able to flourish. However, after the international financial crisis in 2008, the market situation turned sharply. As the state regulates the real estate industry and the income growth of the people slows down, many building materials and furniture markets have greatly exceeded people's actual needs, and the homogenization is serious. It’s inevitable to shuffle the cards."

“The East Asia Mall is located in Beiyuan Road, where building materials and furniture are piled up in Jinan. From what I have learned, there are not many operators who do not lose money, let alone the oriental homes in the remote areas.” Ding Aiju estimates that the market The situation is not good and the various costs have risen, resulting in about 70% of the entire furniture industry sellers losing money. “We used to have several sales outlets in Jinan, but there is only one left. There is an important reason why manufacturers with relatively large scales subsidize part of the sales deficit, and those who do things for others. The days of small and medium-sized sellers are even more difficult."

Statistics from the Shandong Furniture Association show that the main business income of the province's entire industry last year was about 120 billion yuan, although the growth rate reached about 13%, but it has slowed down significantly compared with the growth rate of more than 20% in previous years. Niu Guangxia, president of Shandong Furniture Association, said frankly: "Competition is fierce, overall profits are falling, and pressure is high."

In Niu Guangxia's view, in recent years, foreign furniture manufacturers such as IKEA have accelerated into the domestic market. Domestic well-known group companies have also acquired large enterprises in large numbers, but there are also well-known enterprise stores that have closed more than 50% within one year, indicating that the market competition is becoming more and more fierce. In addition, the rise of e-commerce and the increasing demands of local governments for clean production of furniture have also brought new challenges. To this end, relevant enterprises should seize the business opportunities brought about by the new urbanization, accelerate the pace of transformation and upgrading, in order to overcome this difficulty.

"The state's regulation of the real estate industry is only an external reason, and the internal reasons of the enterprise cannot be ignored." Wang Zheng, director of the Economic Research Institute of the Jinan Academy of Social Sciences, said that the location of the Oriental Homeland is relatively remote, and there are problems with market positioning and management. Wang Zheng once visited the Oriental Home. He felt that his market position was in a state of “high and low,” and the product richness could not be compared with Beiyuan Street. It was impossible to shop around, causing most of the surrounding residents to run far to the road. Beiyuan Street buys furniture.

It is worth mentioning that, unlike the rental models of other local stores, Oriental Homes has mainly built self-built stores. Not only does it cost a lot of money, but the profit cycle is relatively long. Once there is a rush, the capital chain is easily broken. “Oriental Homeland has experienced many rounds of equity, the interests of shareholders have been entangled, and the default payment of suppliers’ payments has indicated that there are loopholes in its management. It is a matter of time before the problem arises. Other companies should be convinced that Jian." Wang Zheng said.

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