Currently, the building decoration industry is experiencing an unprecedented test of survival, and the industry logic has shifted from the past “scale competition” to “survival competition.”
Public data shows that the average net profit margin of listed companies in the construction and decoration sector in 2024 is only 2.1%. More than 100 decoration and decoration companies were issued bankruptcy documents throughout the year, far exceeding the 48 in 2022 and 75 in 2023.
However, against the background of the overall industry downturn, the 2025 mid-term financial report still shows that the revenue scale of leading companies such as Golden Mantis, Jangho Group, and Asia Xia Group is “cliff-leading”, reaching 9.528 billion yuan, 9.339 billion yuan, and 4.886 billion yuan respectively.
We are both practitioners of decoration track, why is there such a huge gap?
A large number of surveys show that companies that are growing against the trend are doing the same thing: maximizing management granularity.
1. Calculate “where the money went” and reduce losses to the end
Last year, a medium-sized decoration company in Zhejiang relied on material loss control to save more than 10 million yuan in single costs alone. Its core action was to reduce the material loss rate from the industry average of 8% to 3.5%.
This achievement is not achieved by workers’ subjective material saving, but by building a full-link material tracking system: every link of procurement planning, warehousing and acceptance, receipt and delivery, and loss analysis is connected to the management system. Overconsumption in any link will trigger an early warning immediately, and there is no need to wait until the end of the project to check the ledger to discover the loss.
Industry survey data shows that the average project material loss rate of small and medium-sized decoration companies is 8%, while that of leading companies is only 3%. This 5 percentage point gap is the difference between life and death in the face of the industry’s average net profit margin of 2.1%.
Relevant practical suggestions point out that decoration companies should change the management and control logic from “post-account settlement” to “process control.” From the moment materials enter the construction site, every outbound transaction must have a record, a destination, and a responsible person to avoid discovering cost overruns only when the project is settled.
2. Compress “wrangling time” and improve process efficiency
Wrangling in labor settlement is a common pain point in the decoration industry. Under the traditional model, the work is completed and then reconciled. There is often a discrepancy between the working hours reported by workers and the working hours recognized by the project department. Even a week of back and forth can be considered an efficient situation.
Many companies that have transformed into digital management have compressed the project settlement time from one week to 48 hours: the entire process of labor contracts, attendance records, output value confirmation, and payment approval is left online, and the workload completed by workers is collected in real time by the system. The settlement is directly based on the data, without the need for repeated efforts by both parties.
At the practical level, it is recommended that enterprises leave traces of key process acceptances, take photos and upload them before sealing, sign on-site process handover orders and sign by both parties, and keep all records online to avoid having to look through scattered WeChat chat records to provide evidence during settlement.
3. Control “change loopholes” and cut down ineffective costs
There is also a common inducement for losses in the decoration industry: Party A verbally puts forward modification requirements, and the construction is carried out on site first. When the audit does not recognize it at the time of settlement, the additional item of hundreds of thousands is directly reduced, and the final cost can only be borne by the decoration company itself.
In response to this pain point, many leading companies have established three rules: same-day confirmation, three-party signatures, and image traces.
A contact note will be sent on the day of the change, and it will be confirmed by the supervisor and Party A within 24 hours and attached with on-site photos. After implementing this rule, the company’s project settlement cycle has been shortened from 3 months to 20 days, and the amount of rework and deductions has been reduced by most.
In essence, in the past when the industry was booming, project profit margins were high, and extensive management would not affect profitability at all. But now that industry competition has intensified and profits have been diluted, the past way of managing projects based on “feeling” is completely unworkable.
Whether procurement went over budget, whether progress payments were collected on time, and how efficient each position was—these data that could be fuzzy in the past must now be 100% accurate.
The core of precise management and control is not to add more people and pile up forms, but to use digital systems to solidify management standards and break down each key node of project management into quantifiable, traceable, and early-warning digital processes, so that the company can change from “the boss watches and manages” to “the system helps you manage”.
In the current industry reshuffle period, companies that adopt refined management are gradually eating up the market share of extensive operators.
