欧派 Home Adjusts Internal Management Targets Amid Revenue and Profit Decline in First Half of 2024
Date: September 5, 2024
By: [Your Name], Staff Reporter
Source: Zhonghua News
In a recent earnings briefing, Chinese home furnishing giant, Oupai Home, has announced a downward adjustment of its internal management targets for the year, following a decline in both revenue and net profit in the first half of 2024. This marks a significant shift in the company’s strategic direction, reflecting the challenges faced by the home furnishing industry in the current market environment.
Revenue and Profit Decline
According to the company’s performance report, Oupai Home achieved an operating revenue of 8.583 billion yuan in the first six months of 2024, marking a year-on-year decrease of 12.81%. The net profit attributable to the parent company’s shareholders stood at 990 million yuan, down 12.61% compared to the same period last year. This simultaneous decline in both revenue and net profit is the first time in ten years, excluding the year 2020.
Market Challenges
Oupai Home attributed the downturn to significant changes in the home furnishing industry ecosystem. The company noted that customer traffic has become increasingly fragmented and stratified, with a dramatic decline in offline store foot traffic. The rising demand for integrated home decoration services, coupled with the shift towards online and full-package sales, has delivered a severe blow to traditional retail home furnishing businesses.
Sales Channel Shifts
The company’s financial report revealed that revenue from the retail distribution channel decreased by 23% year-on-year, significantly impacting the overall operating revenue. However, the full-package channel saw an 8.7% increase, while the bulk channel grew by 1%, and the foreign trade channel experienced a 27% increase. Despite market difficulties, the company’s direct sales channel still achieved a substantial 17% growth.
Strategic Adjustments
In response to these challenges, Oupai Home is pushing forward with terminal channel reforms and accelerating the transformation of its group and dealer networks to align with the future integrated home business model. The company and its dealers are undergoing a multi-dimensional transformation, shifting from single-item sales to integrated home sales, including teams and store operations.
Internal Management Targets
For 2024, Oupai Home stated that considering the industry situation and the company’s performance in the first half of the year, it needs to adjust its internal management targets downwards. These targets, which do not represent the company’s 2024 performance guidance or profit forecast and do not constitute a performance commitment to investors, are being revised to better match the current market conditions.
Future Strategies
To reverse the decline, Oupai Home plans to implement several strategies. First, the company will launch more cost-effective products and packages to meet consumers’ personalized needs from perspectives such as affordability, eco-friendliness, and renewal. Second, it will provide systematic relief and increased subsidies for dealers to improve their profitability and boost terminal confidence. Third, the company will further clarify the operational boundaries of retail and full-package integrated home businesses, fostering a mutually beneficial ecosystem. Lastly, it will steadily advance channel reforms, empowering dealers to gradually transition towards an integrated home business model.
Conclusion
The downward adjustment of internal management targets by Oupai Home reflects the broader challenges faced by the home furnishing industry. As the market continues to evolve, companies like Oupai Home must adapt and innovate to stay competitive. The strategic moves announced by the company aim to position it for future growth and success in an increasingly challenging market environment.
About the Author: [Your Name] is a seasoned journalist with extensive experience at top-tier news organizations such as Xinhua News Agency, People’s Daily, CCTV, Wall Street Journal, and New York Times. Based in China, [Your Name] covers business and economic news, providing in-depth analysis and insights into the market trends and corporate strategies.
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