Decoration like building blocks is actually a 600 billion business

Text| Blue Shark Consumption, Author| Jian An, Editor| Lu Xucheng

Whether it is going home during the Chinese New Year or on vacation, if you are staying in a brand hotel chain , maybe you will experience a simple, clean and modern room. In fact, what is little known is that a room like this is \”prefabricated\”, the decoration parts are completed in the factory, and the site is quickly spliced ​​and decorated like building blocks—a 180 rooms in a family. The brand hotel of the guest room is completed in 80 days and is decorated in 2 weeks and is open for business.

This decoration method is specially called prefabricated decoration. According to a report released by Zhiyan Consulting: The domestic prefabricated decoration market size has increased from 17.5 billion yuan in 2018 to 344 billion yuan in 2022. It is expected that the market size will reach 639 billion yuan in 2025, with a compound growth rate over the past 7 years Up to 67.19%.

The rapid growth market has also attracted the entry of capital. In early January 2025, the leading domestic prefabricated decoration company Deformed Building Blocks completed a new round of strategic financing, exclusively invested by Shanghai Shanda. Previously, the Transformed Building Blocks have received multiple rounds of financing from many well-known investment institutions such as Buhu Venture Capital, Zhongding Capital, Jiyuan Capital, Jinshajiang Venture Capital and Meituan Dragon Ball, with a total financing scale of over 300 million yuan.

Affected by the deep adjustment of the real estate market (national commercial housing sales fell from 18.2 trillion yuan in 2021 to 9.68 trillion yuan in 2024), traditional decoration companies have stormed and prefabricated decoration has been corrected. The amazing speed tear opens the cracks in traditional decoration and enters the early stage of explosive growth.

From real estate to \”new battlefield\”

The traditional decoration industry has long relied on new house delivery, but as the real estate market cools down, The transaction volume of new houses has declined, and the decoration industry has also entered a deep reshuffle stage – traditional decoration players have quickly cleared out, and \”new forces\” such as prefabricated decoration have entered the market, and have been used in hotels, homestays, long-term rental apartments, rental housing, affordable housing and other application scenarios Accelerate rise with the support of strong demand.

Prefactory decoration is to split the decoration of a house into modules such as top, wall, floor, kitchen and bathroom, doors and windows, and wiring systems. Each module contains different decoration parts, and all parts are first in the factory. The prefabricated is completed and then transported to the decoration site. The assembly workers only need to combine and assemble all the components like building blocks according to the standardized operating process, so that the unfinished house can be transformed into a fine decoration house.

This model completely breaks away from the logic of traditional decoration \”water, electricity, wood, shingle and oil\”. It not only greatly shortens the construction cycle and reduces labor costs, but also greatly reduces the level of artificial technology. The decoration quality issues, and the use of environmentally friendly materials can basically achieve zero formaldehyde, making it more environmentally friendlySafety.

These characteristics make prefabricated decoration and hotels and long-term rental apartments with \”high space repeatability, strong replicability, and high requirements for decoration construction period\”, The application scenarios such as rental housing are highly consistent. Therefore, in the case of a decline in the real estate market and the urgent need to find a new incremental market, some prefabricated decoration companies have shifted their attention and opened up a \”new battlefield\” in the fields of hotels, long-term rental apartments, affordable housing, etc.

The domestic manufacturer of digital and intelligent prefabricated decoration products transformed building blocks, and its founder Zhang Yiran was one of the earliest people in China to come into contact with prefabricated decoration. When he founded the transformed building blocks in 2018, he also started with mid-to-high-end prefabricated boutique residential buildings and reached cooperation with more than a dozen leading real estate companies. In 2021, feeling the coldness of the real estate industry, the business of deformed building blocks has gradually shifted to hotels, old-town renovation and other scenarios, and fully entered the hotel market in 2022. At present, hotels have become its largest business.

The logical core of this route transfer is that the inefficient traditional decoration model will definitely be replaced by the efficient decoration model.

The hotel industry has the characteristics of \”high frequency renovation\”. Basic economical hotels need to be replaced in 5-7 years and high-end hotels in 10 years. Due to the consideration of operating efficiency and time cost, \”decoration is required. The time is short and the check-in time is fast, and most hotels are classified by room type, and the same room type has strong replicability and high standardization.

This feature of \”high frequency renovation, fast installation and fast accommodation, standardized demand\” is very suitable for efficient and environmentally friendly prefabricated decoration.

Standard SKU parts of deformed building blocks account for 80% of all products. The standard version of the base is produced and put into the factory early. When there is an order, it is die-casted into imitation marble, imitation leather, imitation wallpaper, etc. according to the requirements. Cut the surface layer into the required size and send it to the site to assemble directly.

Taking a well-known hotel brand that cooperates with deformation building blocks as an example, \”180 rooms, traditional decoration takes about 6-7 months, we only need about 80 days, and the construction period can be shortened by more than 60%. After completion, it will take a week to run and it will officially open in one week. \”Zhang Yiran told Lansha Consumer, \”The traditional decoration method is about 75,000 yuan for a room, and we have reduced it to 60,000 yuan.\”

Against the backdrop of consumption downgrades, hotel and tourism consumption tends to be economical. A well-known local life service platform has also launched a new hotel brand. By renovating and integrating urban economic hotels, it has implemented theme products such as e-sports rooms, audio and video rooms, etc. , provide new accommodation experience for new youths, and quickly seize market share.

This requires that the renovation of the hotel must be \”fast\”. The prefabricated decoration model of deformed building blocks can complete the comprehensive renovation of a room in as soon as 7 days. It is reported that the hotel brand has more than 1,000 stores.

Behind the explosion of prefabricated decoration

Policy drive is an important background and direct driving force for the development of prefabricated decoration.

In 2016, the State Council\’s \”Several Opinions on Further Strengthening Urban Planning, Construction and Management\” and the \”Guiding Opinions on Vigorously Developing Prefabricated Buildings\” both proposed: In 10 years, prefabricated buildings accounted for The proportion of new buildings reached 30%. Since then, the Ministry of Housing and Urban-Rural Development’s many policy documents and development plans for the construction industry have also mentioned that “we must vigorously develop prefabricated building requirements and actively promote prefabricated decoration methods.”

(The Ministry of Housing and Urban-Rural Development mentioned prefabricated buildings and prefabricated decoration many times)

Prefactory decoration is a concept that accompanies prefabricated buildings and is also an important part of judging prefabricated buildings.

According to the \”Evaluation Standards for Prefabricated Buildings\” (GB/T51129-2017) issued by the Ministry of Housing and Urban-Rural Development in 2017, 4 conditions are required to determine whether a building is a prefabricated building: 1. Is the main structure part scored? Less than 20 points; 2. The scores of the enclosure wall and inner partition walls shall not be less than 10 points; 3. Full decoration shall be adopted; 4. The assembly rate shall not be less than 50%.

(Photo source: Ministry of Housing and Urban-Rural Development \”\” Prefabricated Building Evaluation Standards\”)

Because the main structure faces two major problems of technology and cost, the minimum requirement of 20 points is often only met in all 50 points. This also means that to achieve the minimum score line for prefabricated buildings, the interior needs to contribute at least 30 points.

The prefabricated decoration basically matches the scores of the above-mentioned interior parts, making it easier to get points. In addition, the emphasis on the \”full decoration\” requirements of one-time molding is also consistent with the characteristics of prefabricated decoration. Prefabricated decoration has become the way to achieve the highest cost-effectiveness of prefabricated buildings.

In the medium and long term, objective situations such as the decline of green building demand, demographic dividend, and the changes in consumption generations are also important factors that promote the rapid development of prefabricated decoration.

In March 2022, the Ministry of Housing and Urban-Rural Development issued the \”14th Five-Year Plan for Building Energy Saving and Green Building Development\” required that green buildings and ultra-low energy consumption buildings will be fully built by 2025, and prefabricated buildings will account for The ratio reaches 30%, laying the foundation for carbon peak before 2030. The construction industry has always been a major energy-consuming and carbon emission operator. According to the \”2024 China Urban and Rural Construction Research Report\” jointly released by the China Construction Energy Conservation Association and Chongqing University, 2022Among the carbon emissions of construction and housing construction in the year, building materials production and transportation emit 1.78 billion tCO2, of which 67% are steel and cement alone.

(Photo source: \”2024 China Urban and Rural Construction Research Report\”)

In traditional wet decoration, the large-scale use of cement, mortar and other materials also causes huge energy consumption; the secondary transformation faced by the average 5-10-year life cycle of interior decoration also leads to serious waste of material resources; in addition, the secondary Smashing and chiseling during transformation will also produce a large amount of construction waste and environmental pollution.

相比之下，装配式装修采用硅酸钙复合板、岩棉等环保材料，将对人体有害的甲醛和VOC几乎降低到零；且基础材料可回收再利用，也Greatly reduces waste of consumables.从低碳、环保等角度看，装配式装修更符合绿色建筑理念及要求。

There are fewer migrant workers. According to a report released by the National Bureau of Statistics, as of the end of 2023, the number of migrant workers engaged in the construction industry nationwide was about 45.81 million, a decrease of more than 15 million from more than 61 million at the end of 2014, and the proportion of employed people has increased from more than 22%. Reduced to 15.4%.

（数据来源：国家统计局《2023年农民工监测调查报告》）

Middle workers have grown old. 据国家统计局数据，2008年，我国农民工平均年龄为34岁，2018年增长至40.3岁，2023年达43.1岁，且50岁以上农民工占比最高。

（数据来源：国家统计局《2023年农民工监测调查报告》）

Middle workers have become more expensive. 2013年，我国建筑业农民工平均月收入为2965元，到2023年增长至5488元。

(Data source: National Bureau of Statistics \”2023 Migrant Workers Monitoring Survey Report\”)

The reduction in the number of employees, the technical period of \”aging\” migrant workers after retirement, and employment The increase in costs has led to greater labor pressure in the traditional decoration industry and is unsustainable. The labor volume and labor cost of prefabricated decoration have been greatly reduced, which is more suitable for future decoration market demand.

In addition, \” >Light and hard decoration, heavy soft decoration\” has become a common consensus among young people when decorating. They reduce complex shapes and fancy decorations on basic hard decoration, and leave soft decorations through \”hard decoration standardization\” More space for free use, and use soft decoration to achieve personalization of home. This also promotes the rapid development of prefabricated decoration.

C-end is bigger Market

Although the trend of prefabricated decoration development is unstoppable, the B-end is still the main market for prefabricated decoration. In the long run, with the breakthrough and popularization of prefabricated technology , and consumers\’ acceptance of prefabricated decoration will further improve the C-end consumption attributes of prefabricated decoration and will become a new growth point in the industry.

Especially at present Real estate has entered the era of stock, and the market will gradually change to the operation and maintenance of existing residential buildings. The demand for large-scale renovation and renovation based on the stock market will release a huge market increase and will also promote prefabricated decoration. Accelerate penetration and usher in broader growth space.

According to statistics, as of the end of 2022, the number of houses in the country has exceeded 450 million, accounting for nearly 60% of the total housing volume in China. And the current cities in my country Among family housing, there are about 270 million houses with a house age of more than 20 years, and there is a strong demand for renovation and renovation.

In addition, according to research data from Beike Research Institute, consumers are decorating in 2023 When it comes to housing, the proportion of second-hand houses in first-tier cities, new first-tier cities and second-tier cities reached 75.56%, 60.95%, and 56.9%, respectively, and the overall national average reached 57.83%.

(Photo source: Beike Research Institute)

This means that the renovation and renovation of second-hand houses have become the main trend. /p>

It is worth noting that the market demand brought by renovation is reincarnation and sustainable. The decoration cycle of Chinese families is generally 6-12 years, which is calculated based on the average, that is, renovation every 8 years. Based on this calculation , in 2025, what we face is the need to renovate existing housing in 2017, 2009 and 2001.Please, and so on, decoration will enter the era of circular consumption.

The potential demand on the consumer side under this circular consumption trend will become one of the important driving forces for the explosive development of prefabricated decoration in the future. Therefore, the C-end is also the future development goal of many prefabricated decoration companies. Zhang Yiran told Blue Shark Consumer, \”We must do to C in the future.\”

And then, the scale effect Enterprises will have obvious competitive advantages.

The operation model of prefabricated decoration \”heavy factories and light on the site\” makes the factory an important part of the quality control of decoration. The core of industrialized products is scale-only – only by forming a scale effect can we establish cost advantages at the procurement and production ends, reduce costs, thus forming competitive barriers and building enterprise moats.

So we also noticed that the transformed building blocks have completed a new round of strategic financing. The main purpose of the funds is to build a Shandong production base, further enhance the production and R&D capabilities of the enterprise, improve product quality, reduce production costs, and improve Supply chain layout for all categories of prefabricated decoration.

In short, prefabricated decoration that has fission and forced growth from the cold winter of real estate is reconstructing the game rules of the trillion-dollar home decoration market. Under the triple resonance of policies, technology and demand, the development of prefabricated decoration will be an irreversible industrial upgrading.