2026 is the first year of the “15th Five-Year Plan” and a key node for the in-depth transformation of China’s economy into a consumption-driven growth model.
The government work report of the National People’s Congress and the National People’s Congress mentioned that in 2025, my country’s total social consumption will exceed 50 trillion yuan for the first time, and consumption will contribute 52% to economic growth.
The Guangdong High-quality Development Conference points out the direction – using “integration of the two industries” as the key, let the strength of the manufacturing industry lead the excellence of the service industry.
In 2026, the consumer market will enter a new cycle.
The repair of residents’ balance sheets goes hand in hand with the trend of consumption rationalization, and the differentiation of traditional tracks has intensified, while emotional consumption and technological iteration have given rise to new blue oceans.
In July 2025, a “Closing Notice” in the home decoration industry attracted widespread attention.
Liangju, which has a history of 24 years, hundreds of directly-operated stores, and is known as the “principal of decoration” in the industry, has ceased operations. The founder jumped from the building, which made the situation even more tragic.
From the peak of the industry from 2015 to 2018 to the final end, the fate of Liang Home Furnishing is a true reflection of the accelerated reshuffle of the home decoration industry in the wave of “de-realization”.
The underlying growth logic of the industry is changing, and the question is before all market participants: What do home improvement companies rely on to survive?
The dilemma of beautiful homes is, to a certain extent, a metaphor for the traditional renovation model reaching a crossroads.
The crowded scene at the Guangzhou Customized Home Furnishing Exhibition in March 2026 reflects the industry’s collective exploration of new directions.
However, the excitement of the exhibition was in sharp contrast with the financial reports successively disclosed by listed home furnishing companies: the performance of leading companies such as Oppein, Sophia, Zhibang, and Shangpin Home Delivery was obviously divided. Some profits fell sharply, some continued to suffer losses, and some companies struggled to maintain themselves under pressure.
The enthusiasm of the exhibition and the chill revealed by the financial reports together constitute the most realistic look of the home decoration industry in its transformation period.
Data from the National Bureau of Statistics show that sales of new commercial housing and investment in real estate development across the country will fall significantly in 2025. Compared with the historical high in 2021, the scale of the industry has entered a stage of deep adjustment, and the traditional growth model relying on new housing is no longer sustainable.
Tubatu COO Fang Hao pointed out during the review that real estate risks were transmitted to the entire industry chain in early 2025. Customer flow in home furnishing stores declined significantly in the middle of the year. In the second half of the year, industry-wide traffic continued to be under pressure, with multiple pressures superimposed.
The driving force for industry growth is shifting from new homes to the existing housing market.
Industry reports predict that the overall size of home improvement and furnishings in 2025 will be approximately 5 trillion yuan, of which the proportion of existing housing decoration will exceed half.
This change was intuitively reflected at this year’s Guangzhou Customized Home Furnishing Exhibition. The exhibition set up a nearly 3,000 square meter old renovation demonstration exhibition area, where nearly 50 brands appeared together to showcase product and model innovations for the existing market.
At the same time, the trade-in policy that will be implemented in September 2024 has significantly boosted home decoration consumption.
In the first eight months of 2025, furniture retail sales increased significantly year-on-year, and Guangdong ranked among the top in the country.
But there are also hidden worries hidden under the policy stimulus.
The contract liabilities of some listed companies have dropped significantly, triggering market concerns about “advance overdraft of demand.”
What is even more noteworthy is that subsidies are subtly changing consumer decision-making habits, and some people have formed a “don’t buy without subsidies” mentality.
In this regard, Qin Zhanxue, president of the China Building Materials Circulation Association, said bluntly, “The nature of subsidies is an ignition engine and cannot be sustained for a long time. The subsequent industry development must rely on its own sustainability.”
In the era of existing housing, the old renovation market has become the new focus of the industry.
Data from the Ministry of Housing and Urban-Rural Development show that the plan to renovate old urban communities across the country is steadily advancing, and relevant subsidy policies continue to be implemented, further opening up market space.
But the old reform is not a market with low threshold and high returns.
Zhibang Home Furnishing frankly admitted in its 2025 performance forecast that the demand brought about by the renovation of existing housing “is not yet enough to fully offset the pressure caused by the decline of traditional main channels.”
At the 2026 Guangzhou Custom Home Exhibition Renovation Industry Model Innovation Forum, many leaders of companies with deep roots in the front line admitted that although the demand for existing housing renovation in my country is large, it faces pain points such as low efficiency, high cost, and insufficient standardization.
Based on the first-line perspective, the old renovation market mainly faces three obstacles: First, the traditional way of acquiring customers is high-cost and low-conversion, and the continued rise in costs further squeezes the living space of small and medium-sized clothing companies.
Secondly, the house types vary greatly, and the construction involves multiple types of work, and most of them are carried out in the owner’s living environment, which requires extremely high construction schedule and refined management.
Finally, consumers generally have concerns about additional items, quality, and after-sales, and the industry’s reputation needs to be improved, which directly lengthens the decision-making cycle.
Faced with pain points, Convenient Bee, which relies on dense community stores, faces complex variables and difficult management of old renovation projects, and optimizes the construction site supervision process through algorithms.
Zhai Xiaoxin, Kuaibo Bus, etc. proposed to transform towards replicability and fast delivery. The kitchen space will be dismantled and completed on the same day.
Some companies have further limited the construction period of partial renovation to no more than 7 days to “shorten the project cycle.”
In the exploration of old renovation, there are three types of paths, such as converting high-frequency home repair contacts into entry points for old renovation needs.
Or use AI technology to crack information asymmetry.
There are also companies that focus on domestic complex house types and user habits, instead of copying foreign products, and make local innovations.
Although the paths have different emphases, the directions are highly convergent, that is, using standardization and digitalization to solve the problems of old renovation and promote the accelerated transformation of the home decoration industry from labor-intensive to technology-driven.
Among the three major pain points of traffic, delivery and trust in the home decoration industry, trust is most easily obscured by technical thinking, but it is related to the long-term foundation of the industry.
Grooming was once seen as a solution to trust issues.
But when companies focus on the marketing of “big stores + packages” instead of delivery quality and after-sales guarantee, remodeling becomes a new source of complaints.
In 2025, the trust issue in the industry will evolve from implicit complaints to explicit incidents.
Incidents such as the Guangzhou Xintang Juran Home incident, Liangjia’s closure, and Oppein’s customized cabinets sprouting mushrooms have all exposed the trust crisis in the industry.
More consumers are struggling with “hidden bills” day after day.
The “Shanghai Residential Decoration Consumption White Paper” shows that the average decoration satisfaction score is only 63 points.
The eight major complaint hotspots of the China Consumers Association in 2025 show that home improvement contract traps and hidden consumption are on the rise.
Behind these trivial complaints, it shows that consumers’ trust does not collapse instantly, but is wasted away by “wrong goods”, “after-sales pushback” and “invisible additions” time and time again.
Faced with a crisis of trust, some home improvement companies are exploring an “advance compensation” system, while others have high hopes for digital management to improve efficiency.
However, Cheng Yifeng, founder of Lixiangjia, believes that “in the AI era, human touch will become more important.” Wan Shuibo, a strategic consulting expert, pointed out that the industry has long had a “free range” channel management model, which is no longer able to support the long-term development of brands.
Su Haopeng, a professor at the School of Law at the University of International Business and Economics, pointed out that the model of payment first and then construction in the home improvement industry transfers business risks to consumers, resulting in “payment has been made, but the work has not been completed, making it difficult to protect rights.”
The home decoration industry in 2026 will be intertwined with multiple risks, and the reshuffle is still accelerating.
The financial reports of listed home furnishing companies outline a clear differentiation situation. The growth rate of the leading companies has slowed down, the waist has been cut in half, and the bottom companies have suffered losses.
Standing at a turning point in the industry, changes in the home decoration industry will ultimately answer one question: Why do consumers trust you?
Qin Zhanxue, president of the China Building Materials Circulation Association, pointed out that the fundamental problem in the home improvement industry is not a lack of demand, but a lack of trust. “This industry must establish a mechanism that allows consumers to ‘dare to spend money.’” The era of new homes has come to an end.
The companies that can really get through the cycle are not necessarily the largest, but those participants who are focused on polishing delivery, using technology to improve transparency, and guarding the bottom line with integrity.
