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Shell 8 billion opened a new wind mouth

Date: 2021-07-09

Casuallya move, shell created the largest merger case of Chinese home outfit industry. On July 6, shell announcement says, prepare to acquire with 8 billion yuan Sheng all home outfit 100% equity. Swallow a traditional home decoration company, shell can change the home decoration of this mixed trillion-level industry? Shell will give big brand real estate enterprises, Internet companies and ordinary consumers to bring what stimulation?

Opening tuyere

Home decoration is a trillion-level market, but the industry concentration is very low.

According to the market research data of Euromonitor, Shengdu Home Decoration has ranked first in the total decoration sales in China in 2020. But with annual sales of about $4 billion, Sundo's market share is only 0.4% at full capacity.

In this era that even community selling vegetables can become tuyere, home decoration seems to be the industry lost by Internet giants, or as mixed as before, without the birth of any giant.

Home decoration is a potential tuyere. Now, shell with an 8 billion yuan acquisition case, this potential tuyere to open. The significance of Shell lies not in its future success, but in the fact that the acquisition itself will inspire more capital and platform companies to enter the arena.

To use an inappropriate analogy: the significance of Evergrande building a car does not lie in whether Evergrande can succeed, but in the fact that even an ordinary real estate enterprise like Evergrande can build a car. Who can't build a car? So, new energy vehicles once again become a tuyere.

Of course, the shell is not the kind of enterprise with ordinary aptitude, the successful probability that shell is installed in the home domain is still worth looking forward to. Of course, this is not so important, more important or: shells played a leading role in the demonstration of capital and platform companies to truly home decoration as a tuyere.

Potential tuyere will become dominant tuyere. The whole home outfit industry changes, it is the thing that can count the day by breaking fingers.

To ordinary consumer, the more transparent, more standard home that can enjoy shell to offer later outfit service, did not have so important actually. Important is shell can cause the depth change of home outfit industry, let whole industry compare now a little more transparent, a little more standard.

Future strategic standard

The road of shell's home outfit, already walked a few days.

In 2015, HOME LINK and Vanke jointly established "Wanchain", the original idea is both "to B" and "to C", not only for developers to do decoration delivery, but also directly for ordinary consumers to do decoration. But "Wan Lian" eventually failed to get off the ground.

Zuo Hui, the founder of Shell, once said, "It is very difficult to make a great son by adding a father from heaven and a father from earth." Therefore, Shell launched its "Bedding Home Decoration" in 2019. But it wasn't a full attack. It was just a trial, or a basic exercise.

Now, shell spends 8 billion yuan to acquire holy all home outfit, be to blow the bugle that rang attack. It is, in the words of Peng Yongdong, Shell's new chairman and chief executive, "climbing the second mountain".

Once the shell to make a little bit of a good trend, big brand housing enterprises, Internet factories and some strange companies, will enter the market.

As far as the real estate industry is concerned, home decoration will soon become the strategic standard of big real estate enterprises, or at least the standard of material enterprises, just like long-term rental apartments. So many property companies listed in Hong Kong, its profit model is still primitive and weak, they just can give the capital market to tell a story of home decoration is a piece of fat meat - shell with 8 billion yuan to this fat endorsement.

It's just that most companies don't have the capacity to eat the fat.

Home improvement is a more difficult job than renting an apartment for a long time: it is often difficult for the housing companies (including its property companies) to do the kind of drudgery and drudgery that need to be kept low.

A shell derived from HOME LINK has this gene.

Now the shell is facing a test, raw swallowed a traditional home decoration company, how to digest well.

How to digest

In those days HOME LINK can be big, but also rely on the national horse merger ah. Still different: before the four mergers and acquisitions of HOME LINK, its system construction was already strong, with a strong process output capacity; But now, the main platform of shell home decoration is not strong -- if the "quilt home decoration" is already strong, there is no big problem to swallow the traditional home decoration company of Shengdu.

But now the test is: shell's own "bed home decoration" is still a small pond, but now it has to undertake the Shengdu home decoration of the reservoir.

On the contrary, once the shell chunmeng has digested this traditional home decoration company without trace, it will be a wonderful business school case again.

Shengdu home decoration is only a market coverage mainly in the East China region of the company. So, the shell can go on to play in two ways --

● One is to transform Shengdu Home Decoration into a capacity platform, with this capacity platform to expand to the country ● The other is to make Shengdu Home Decoration into a model of annexation, continue to acquire large-scale home decoration companies in other regions of the country

No matter what kind of shell ultimately choose to play, the ability system of complete home decoration companies will increase the average valuation -- even if the shell does not buy, all kinds of capital and platform companies will be eyeing.


At last, I will tell you a new story. At that time, Vanke and HOME LINK did not work together on "Wan Chain", but the decision makers of Vanke resisted public opinion and became a shareholder of HOME LINK. Later, HOME LINK's equity was automatically converted into Shell's equity; Later, the shell went public and Vanke made billions from it. Therefore, we should stay with the enterprises that are on the rise and people who are on the rise. The so-called tuyere, are the creation of the people who rise. People are not rising because of tuyere, tuyere is open because of rising people.