In 2026, the construction and decoration industry has bid farewell to the period of high growth and dividends, and has fully entered a new stage of shrinking growth, dominance of stock, intensified competition, and tightening policies.
The delivery volume of new homes continues to decline, the industry elimination rate is rising, low-price involution is serious, and the payment collection cycle is lengthening. Practitioners generally face the dilemma of “difficulty in acquiring customers, thin profits, and painful transformation.”
However, there are structural opportunities hidden behind the challenges. Only by grasping the trends, finding the right way out, and decisively breaking through the situation can we overcome the cycle and develop steadily.
1. Current industry core trends: Four major changes determine the direction
1.
Demand side: From incremental new homes to existing renovations, rigid demand shifts to quality and segmentation
Industry demand has shifted from “rigid demand for new homes” to existing housing renovations, second-hand housing renovations, partial rectifications, hardcover housing upgrades, and aging-friendly decoration.
The new home market is shrinking, while the demand for renovation of existing homes is stable, with fast payment and few disputes, making it the core customer source for small and medium-sized practitioners.
At the same time, consumption upgrades drive demand from “basic decoration” to functional optimization, intelligence and convenience, green health, and emotional value. Customers are willing to pay a premium for quality, design, and service.
Aging-friendly, child-friendly, minimalist aesthetics, and natural ecology (such as green walls, natural materials) have become mainstream design directions.
2. Supply side: from extensive decentralization to refined integration, eliminating backward production capacity
The industry presents a “big industry, small company” pattern, and concentration continues to increase.
The involution of low prices has led to compression of profits. From 2025 to 2026, the industry elimination rate will be as high as 15%. Most of the eliminated are small and medium-sized teams with no qualifications, no reputation, and no standards.
At the policy level, the state cleans up affiliations, subcontracting, and illegal subcontracting, and compulsorily promotes smart construction, green construction, and prefabricated decoration, forcing the industry to shift from extensive construction to standardized, industrialized, and standardized development.
In the future, companies with compliance qualifications, standard delivery, and supply chain integration capabilities will dominate the market.
3. Capability end: From experience-driven to technology + system-driven, efficiency is king
The traditional experience model of “master leading apprentice” has failed, and BIM design, prefabricated construction, AI customer acquisition, and digital management have become standard.
BIM technology realizes the visualization of the entire process of design, construction, and operation and maintenance, reducing rework, shortening the construction period, and reducing costs; prefabricated decoration uses parts and components to be prefabricated in the factory and spliced on site, increasing efficiency by more than 50%, in line with green and low-carbon policies; AI and short videos reconstruct customer acquisition logic, and online content marketing and private domain operations replace traditional local promotion and become the core channel for low-cost customer acquisition.
4. Competition: From price war to value war, trust and reputation have become barriers
The cost of acquiring customers has skyrocketed. The cost of offline effective intended customers exceeds 500 yuan. The unit price of online high-quality leads is 800-1200 yuan. The conversion rate is only 11%. Low-price involution is unsustainable.
The core of competition has shifted from “comparing price” to comparing quality, service, design, delivery and reputation.
Home decoration is a high-trust industry. Customer decisions rely on real cases, completion results, and after-sales guarantees. Long-term reputation has become the company’s most solid moat.
2. Ways out for practitioners: three types of paths, suitable for different groups
1.
Small and medium-sized foremen/individual practitioners: Deeply cultivate segmentation and become “small but beautiful” experts
Abandon the low-price all-inclusive competition and focus on segmented tracks such as partial renovation, old house renovation, kitchen and bathroom renovation, wall repair, and aging-friendly renovation.
This type of project has low threshold, fast payment, low competition, and is suitable for the capabilities of small and medium-sized teams.
At the same time, bind 1-2 reliable building materials suppliers to carry out standardized construction, accumulate local reputation, and steadily acquire customers through community referrals and private domain operations of owner groups.
Refuse to advance capital, do not accept high-risk projects, operate in compliance with regulations, and operate steadily.
2. Small and medium-sized decoration companies: Deeply cultivate existing stocks, integrate resources, and take differentiated routes
Strategicly, “based on existing stocks, with incremental growth as the wings”, they will deeply cultivate the local existing market and expand incremental services such as complete decoration, smart home, and soft decoration matching.
In terms of capabilities, we build standardized design, construction, and after-sales systems, integrate the supply chain to reduce costs, and use digital management to improve efficiency.
In terms of customer acquisition, we abandon high-priced information flows and focus on short video case presentations, live broadcasts of construction sites, private community operations, and fission of old customers to reduce customer acquisition costs and increase conversion rates.
In terms of positioning, it avoids the edge of leading companies and focuses on “cost-effectiveness + local reputation + fast delivery” to form a differentiated advantage.
3. Large-scale decoration enterprises/transformation enterprises: technological empowerment, cross-border integration, and new tracks
Embrace the three major policy trends of green and low-carbon, intelligent construction, and prefabricated decoration, increase investment in BIM, AI, and digitalization to enhance core competitiveness.
In terms of business, it has transformed from single decoration to integrated services of “design + construction + building materials + smart home + soft decoration + after-sales”, extending the industrial chain and increasing unit price per customer.
In the market, we plan to deploy urban renewal, renovation of old communities, public decoration projects, and overseas markets (relying on the “Belt and Road Initiative”) to diversify risks and expand increments.
At the same time, we will follow the “specialized, special and innovative” route, focusing on high-end residential, commercial space, aging-friendly projects and other subdivided areas to build brand influence.
3. The key to breaking the situation: Five major actions, quick implementation
1. Cognitive breaking: give up illusions, accept the reality of the stock, and turn to value competition
Completely abandon the old thinking of “waiting for new housing to pick up and relying on low prices to increase volume”, and recognize that the stock market is the long-term norm and value war is the only way out.
Shift your energy from “grabbing orders at low prices” to “improving quality, optimizing services, and building reputation”, and from “making quick money” to “doing long-term business.”
2. Product breakthrough: focus on segmentation, combine standardization + personalization, and create cost-effective products
Based on the existing market demand, design standardized partial renovation packages (such as 19,800 yuan for kitchen and bathroom renovation, 8,800 yuan for wall renovation) to reduce design and construction costs.
At the same time, 20% of the space for personalized customization is reserved to meet the differentiated needs of customers and balance efficiency and experience.
The main focus is “environmental protection materials + standard construction period + quality assurance services”, forming a clear product value that distinguishes it from low-priced brands.
3. Breakthrough in customer acquisition: online content + private domain operation, low-cost and efficient customer acquisition
Say goodbye to high-cost local promotion and information flow, focus on content marketing on Douyin, video accounts, and Xiaohongshu: publish completed cases, real shots of construction sites, pitfall avoidance guides, design tips, create professional IP, and attract precise customers.
Establish private domain traffic pools for owner groups and friend circles, and achieve fission customer acquisition through old customer discounts and referral rewards, reduce customer acquisition costs, and increase conversion rates.
4. Capability breakthrough: technical empowerment, standardized delivery, digital management
Learn basic BIM design and prefabricated construction technology to improve construction efficiency and reduce rework.
Develop full-process standards from design, construction, acceptance, and after-sales to ensure stable delivery quality and reduce disputes.
Use decoration management software to digitize customer management, project progress, material procurement, and financial settlement, improve operational efficiency, and reduce management costs.
5. Compliance breaks: stick to the bottom line, avoid risks, and operate steadily
Strictly abide by industry regulations, do not affiliate, subcontract, or illegally subcontract, and obtain complete qualifications and licenses.
Clarify the payment collection points before project cooperation, and resolutely refrain from advancing funds or accepting projects without advance payment to avoid financial risks.
Sign a formal contract to clarify the material brand, construction standards, and warranty period, reduce after-sales disputes, and protect your own rights and interests.
Conclusion
The cold winter in the construction and decoration industry is essentially a period of elimination of backward models and a period of opportunity for high-quality practitioners.
In 2026, the industry will no longer be about “whoever is brave will make money”, but whoever is professional, reliable, and able to solve customer pain points will survive and live well.
Only by giving up low-price intrusion, deeply cultivating stock segmentation, embracing technological changes, adhering to quality reputation, and operating in a compliant and stable manner can practitioners break through the industry transformation, move from “barbaric growth” to “high-quality development”, and open up their own new blue ocean in the stock era.
