Interview: Smart home drive to turn interior decoration red hot

Interior design exhibition kicks off at Shanghai exhibition center on Mar 27, 2015. [Photo/IC]

The smart home drive will likely become the next accelerating point for housing decoration industry, as more Internet giant competitors get "on-board", said an industry veteran.

Smartphone vendor Xiaomi has become one of the latest contenders, as the Internet blends into the country's traditional painting, interior design and furnishing jobs in the form of e-commerce and O2O (online-to-offline) services.

"Competition will turn 'red' [hot] in two years," said Ma Ziqiang, CEO of 525j.com.cn, adding that the introduction of smart home devices will accelerate the industrial growth.

Housing decoration, now one of the few less competitive fields within e-commerce, is the best time to lay the foundation work for a smart home drive, and it has vast potential, said Ma.

Founded in Shanghai in 2002, 525j has transformed along the Internet era from a vertical membership-based website into an e-commerce and O2O platform.

The user scale of mobile O2Os in China reached 610 million by the end of 2014, according to a research compiled by Internet data service provider TalkingData, but housing decoration was falling behind, with most market participants still relying on personal computers, rather than mobile ends.

So, what does an interior decorating O2O look like? To what extent, will the O2Os reshape the traditional painting and furnishing businesses? And as more Internet giants join the competition and the smart home concept gains popularity, how will the industry evolve?

To answer these and other questions we sat down with Ma Ziqiang, CEO of 525j.com.cn for an interview.

Ma Ziqiang, CEO of housing decoration O2O 525j.com.cn, gives a speech at 2015 iResearch forum in Beijing, April 16. [Photo/IC]

Q: What is the company's business mode? What service does 525j.com.cn offer to customers?

Ma: Interior decoration is a business with high price and low consumption frequency. Lessons learnt among consumers tend to stay as lessons. Therefore, our first step is to help customers better understand the industry and provide them sufficient knowledge.

Second, consumers with such needs can see a 3D-effect presentation of the decoration plan before signing contract with companies on our platform. The free-of-charge service will allow them to have a clear picture about the design and reduce the chance of future disputes.

Customers at the same time can download 525j's application named Zhuangxiubao, where they will find a timetable guideline for their decoration project and can upload pictures upon the finish of each step to ask for a quality check.

Third, the platform provides customers with package offers, such as 666 yuan per square meter or 888 yuan per square meter, catering to various decoration styles.

What's more, the 525j also has a third-party payment platform, where banks will act as trustees and transfer the money from customers' accounts to decorating companies once the project is completed and accepted.

Q: Which party pays for the services such as advanced design and budget planning? To what extent has the birth of O2O platforms been reshaping the interior decoration sector?

Ma: Furniture producers and material providers nowadays have slim margin due to the increasing promotion and sales costs. Online package sales can help them better plan ahead their production scale, reduce stocking costs, and therefore promote more efficient use of funds. Stock keeping units (SKU) within the industry can be lowered from 300 to 40.