Tubatu, China's No.1 online home renovation platform may seek listing in Hong Kong soon upon Qeeka Home's IPO
June 20 2018 - 11:27PM
JCN Newswire
Hong Kong stock market may welcome two online home renovation
en-terprises which are booming in China's Internet home renovation
in-dustry, a blue-sea market now worth RMB4 trillion (c.USD620
billion): Qeeka Home, which has commenced global roadshow from this
Tues-day, and the other one is Tubatu, the No.1 player of the
industry.
Having passed the hearing of the HKEX on 15 June, Qeeka Home will
be officially listed in the Hong Kong capital market next month at
the earli-est. Market news indicates that Tubatu intends to seek
IPO on the HKEX soon. In just a few months, the two industrial
leaders in China's online home renovation market are seeking
listings in Hong Kong where the two giants will compete directly in
the capital market.
According to the industrial statistics from various third parties,
for in-stance, the "2018 China Household and Health Consumption
White Pa-per" by ebrun.com suggests that in terms of online home
renovation, a sector developing with strong momentum in China's
enormous home renovation market, Tubatu has the largest user base
followed by Qeeka Home. According to statistics from Analysys.com,
a consultant providing big data analysis, Tubatu and Qeeka Home
ranked first and second re-spectively in terms of market share.
While Qeeka Home started its busi-ness on the basis of home expo
and collective purchase of construction materials and subsequently
made a move to the internet interior design and construction
sector, Tubatu was born with internet development gene from the
very beginning.
Since 2008 till now, Tubatu has been committed to building its
platform model, from an information service platform to trading
service platform in the early phase and has evolved into today's
empowerment plat-form.
In the information service platform stage, Tubatu bridge the
information gap by matching trades. With the launch of Yun Kou Bei
evalua-tion system, Tubatu revolutionized the traditional marketing
and client acquisition method of interior design and construction
companies as well as ways to find renovation companies for property
owners. "Zhuang Xiu Bao" marks another milestone made by Tubatu,
upon which Tubatu partnered with third party financial institutions
to launch supply chain financing services in order to resolve the
cash flow prob-lems encountered in the operation of renovation
companies.
At present, Tubatu plays an empowerment role. On one hand, it
contin-uously improves users' decision making scenarios and trading
scenari-os through renovation Q&A, renovation tips and
renovation insurance products etc., so as to offer users a sense of
trust and security in their renovation process; on the other hand,
through big data analysis, Tuba-tu accurately matches property
owners with 80,000 quality renovation companies and assists
renovation companies in implementing accurate marketing strategy.
Meanwhile, the establishment of Yun Kou Bei eval-uation system
enables renovation companies to accumulate reputation and to make
breakthroughs with their reputation while further lowering their
costs in client acquisition.
Is Tubatu, the online home renovation platform with the largest
user base and market share and valued at over US$2bn in its C round
financ-ing, a much better investment target?
Home renovation market in China, a RMB4 trillion (USD620 billion)
blue sea
There is no giants in home renovation industry.
According to the official data of China Building Decoration
Decorate As-sociation (CBDDA), China's construction and decoration
industry amounted to 3 trillion in total in 2014, with nearly
150,000 participants. In 2015, with the expansion of the "new
middle class", the total scale of the home renovation industry had
exceeded trillion.
However, in such a typically "scattered" market, hundreds of
thousands of small and medium-sized renovation companies and
construction teams, which are the main force providing home
decoration services, competing for that multi trillion Renminbi
market. According to the data of CBDDA , there were approximately
132,000 companies in the con-struction, decoration and renovation
industry in 2016, and Dong Yi Ri Sheng, an established company in
traditional renovation market, rec-orded an operating revenue of
approximately RMB3 billion in 2016, ac-counting for only 0.2% of
the entire domestic renovation market.
In face of the scattered industrial landscape, it is easy to
understand why BAT, though launched business covering almost all
aspects of our daily life in the past decade, still hesitates to
get a toehold in the interior ren-ovation field.
Currently, the growth in the online home renovation market is
accelerat-ing. Its expansion is not only facilitated by the current
new renovation market volume, but is also driven by second
renovation and even reno-vation for rented houses. According to the
Frost & Sullivan Report, it is expected that in the next four
years the CAGR of China's online home renovation market will reach
58.4% and the penetration rate of internet domestic renovation in
the entire home renovation industry can reach 38.1%.
Throughout the development of internet, Tencent and Baidu dominated
the market, but now Alibaba and JD.com are taking the lead. As the
whirlwind storming from "light model" to "heavy industry", online
home design and construction market will embrace a blossom since
2018.
The internet dividend benefits the home renovation industry in the
year 2015 which marks the "birth of internet home renovation"
market. Yet, it is also regarded as the watershed for the industry.
According to the data from iResearch, the fund raising projects in
the internet home reno-vation industry in 2015 increased to 123
from 41 in the prior year. The self-operation model ushered in by
iKongjian has become a new fashion followed by a flock of internet
home renovation companies. However, in the end of 2015, only half
of over 200 internet home renovation plat-forms survived.
The growing pains last. In 2017, there were only 19 fund raising
projects launched by internet home renovation platforms, accounting
for just one-fifteen of that in 2015. Nevertheless, the market has
been growing bigger and bigger under the combined effect of
political policy sup-ports and rising market demand. Many
enterprises, in the mean time, stand out in industry reshuffle,
such as Tubatu and Qeeka Home, enjoy-ing another wave of internet
dividend in the industry. .
Industry transformation in 3620 days by Tubatu
Reviewing the development progress of the home renovation industry,
the history of Tubatu reflects how the internet has been
influencing and revolutionizing home renovation industry.
In its progress of becoming a nationwide online one-stop home
renova-tion platform, first of its kind, Tubatu has undergone three
major trans-formations, from matching information to trades, from
building mutual trust to supervising the use of fund subsequently
(including quality in-spection and supervision services), from
focusing on product manage-ment service of supply chain to
providing one-stop interior design and construction services.
Tubatu provides solutions to all demands related to home
renovation.
Tubatu, in the beginning, tried to improve how the industry
connects, in order to re-balance the information asymmetry. At that
time, Tubatu was very similar to 58.com, a information sharing
website. Tubatu was the first company that rolled out the platform
model, establishing Yun Kou Bei based on trade matching services.
By breaching the information gap, the original method of marketing
and client acquisition of renova-tion companies and the traditional
ways of property owners to find renovation companies thus
transformed.
In 2012, the launch of "Zhuang Xiu Bao" is the second milestone
achieved by Tubatu, the Alibaba of the home renovation industry.
Zhuang Xiu Bao also earned the name of "Alipay-like system for Home
Renovation Sector", on which users can entrust their funds and
Tubatu will transfer the money to renovation companies
batch-by-batch based on the construction progress. After solving
the safety issue of renova-tion funds, Tubatu partnered with third
party financial institutions to launch supply chain finance, such
as financial loan products, renovation loan products at consumption
end and insurance extension products co-launched with insurance
companies, so as to resolve the cash flow prob-lems encountered in
the operation of renovation companies.
Tubatu now serves as the infrastructure service provider of the
industry, and supply chain-related services have also evolved at
this stage. On one hand, it continuously improves users' decision
making scenarios and trading scenarios through renovation Q&A,
renovation tips, renova-tion insurance products etc., so as to
offer users a sense of trust and se-curity in their renovation
process; on the other hand, through big data analysis, Tubatu
accurately matches property owners with 80,000 quality renovation
companies and assists renovation companies in implement-ing
accurate marketing strategy.
From this perspective, Tubatu is more than a data platform but a
Tecent-like open platform on which both upstream and downstream
partici-pants are able to integrate and achieve win-win
situation.
That is how Tubatu differs from other internet home renovation
plat-forms. When other interior renovation industry participants
are still op-erating in form of direct-sale stores, Tubatu is ready
to develop from a whole industrial chain angle to establish
infrastructure for the home ren-ovation industry.
Tubatu defines future and transformation
The development of mobile internet has redefined many industries in
more than a decade. Information asymmetry and unsatisfactory
services are regarded as "growing pains" by the "pioneers" who
ushered in a new era. During this period, WeChat, Toutiao and DiDi
emerged, revo-lutionizing traditional industries.
While the internet was undergoing re-organization, two important
data platforms, Alibaba and Tencent, were born. Meanwhile, Tubatu
was do-ing the same thing -- focusing on constructing a platform
ecosystem. It took Tubatu ten years to explore the chain in the
"deep water area" and construct infrastructure in the "deep water
area". After the com-pletion of the platform infrastructure, the
new direction and strategy of Tubatu have been transformed into
online, data intelligence and net-work synergy.
The "Hundred Million Plan", proposed by Wang Guobin, the chairman
and CEO of Tubatu, targets to "nurture 1000 enterprises with annual
revenue exceeding RMB100 million and 10,000 enterprises with annual
revenue exceeding RMB10 million" in the next five years. As an
industry empowerment plan proposed after the upgrade of its
platform strategy, Tubatu will enable all market participants gain
the ac-cess to resources on the platform and create an empowerment
pan-home renovation platform with all the service providers in the
home renovation industry, and further re-construct the relationship
between enterprises and consumers.
"Empowerment" is the key to realize the plan, which is also the
platform value reaffirmed by Alibaba, Tencent and JD.com on various
occasions. In order to realize the "Hundred Million Plan", Tubatu
has upgraded the three major systems of the empowerment platform,
including a new credit system, a new efficiency system and a new
organ-ization system.
In these three major systems, Tubatu will gather a large amount of
UGC through this platform for content accumulation and social
interaction and will effectively match the supply of enterprises
with the demand of consumers by changing the connection of home
renovation, and enter-prises with good reputation will be
recommended to and known by more customers. Moreover, through the
Tumax3D cloud design system, Tubatu will be deeply engaged in each
of every phase of design, prod-ucts and construction, consolidate
the construction and operation sys-tem, and forward the demand
feedback data to B end and F end via big data analysis and
consumption behavior data of users, thus enhancing operating
efficiency. After the empowerment in aspects of credit and
ef-ficiency Tubatu will provide marketing, IT technology, quality
inspection, procurement, logistics and installation services,
further improve the service capability and renovation quality of
enterprises by facilitating en-terprises to concentrate on design
and construction only.
In the future, the online home renovation platform will become an
eco-system that empowers outstanding designers and renovation
companies in the industry. At this stage, Tubatu will serve as a
platform to assist business startups and innovation in the
industry. Independent IPs such as some famous designers will emerge
from the platform when VR, AR and other technologies will be widely
used.
With such an ecosystem, Tubatu will become a hub and engine
connect-ing multiple ends while expanding the boundary and
capability of the platform and eventually achieving network
synergy. The future of net-work synergy will be relocation costs
growing without a ceiling. In the same case as WeChat, when user
group is large enough, the platform can hardly be replaced by other
instant communication tools.
China's online home renovation market reveals a huge potential, and
therefore giving rise to unlimited possibilities in the future.
Today, Qeeka Home makes the first attempt in the capital market,
while in future online home renovation market, especially
industrial leaders will defi-nitely attract more attentions of an
increasing number of investors . If Tubatu files for Hong Kong IPO
in the near future as market news indi-cates, it will, undoubtedly,
be an event more worth waiting for in the capital market.
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