From door-to-door cooking to feeding cats and walking dogs, the new trend in home service consumption is strong
How can the trillion-scale life service market take a further step?
Our reporter Pei Longxiang
"Worker Daily" (page 4, April 8, 2024)
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In recent years, the new trend of consumption of life services has been strong and full of enthusiasm. The life service industry represented by housekeeping, washing, and maintenance has developed rapidly, and home services have supported a trillion-level market. As industry specialization and digitalization continue to increase, residents' consumption demand for daily services will be further activated, and the market's huge potential is expected to be further unleashed.
Aunt Chen, who lives in a community in Lujiazui, Shanghai, has often handed over the "power" of the family recently.
She just needs to buy the groceries and put them in the kitchen every day, and the aunt she has made an appointment with will come to her door. The dishes and requirements have been communicated in advance on WeChat, so there is no need to do it yourself. Two hours later, a table of meals with local flavor will be served on time. "Compared with the busy work of myself in the past, now I can find someone to come to my house to cook the ingredients with ease and to the level of a chef. It's a good deal!" Occasionally, when she meets a familiar neighbor in the elevator room, Aunt Chen often recommends it.
In recent years, the new trend of consumption of life services has been strong and full of enthusiasm, and the life service industry represented by housekeeping, washing and maintenance has developed rapidly. The Shanghai Life Service Industry Summit held recently revealed that these home services have supported a trillion-level market. As industry specialization and digitalization continue to increase, residents' consumption demand for daily services will be further activated, and the market's huge potential is expected to be further unleashed.
Life services are increasingly specialized and segmented
"Except for repairing your relationship, repair everything else." Li Qilong, COO of Woodpecker Home Repair, is used to such opening remarks. The company started in Chongqing and now covers more than 2,200 cities at or above the county level across the country. In so many cities, apart from feelings, what exactly does “other” include? Li Qilong said: "We have 410 scenarios for maintenance services, and there are about 1,000 SKU items in 410 scenarios. There are a lot of them. We believe that the market segment still has great potential."
In recent years, many practitioners, like Li Qilong, have seen the development trend of professionalization and segmentation of life services. "For example, pet hygiene and cleaning, wardrobe organization and storage, these services did not exist before, but the compound growth rate has been very fast in recent years." eHousekeeping CEO Lin Jie said frankly that although the company prefers to focus on a single product category of housekeeping and cleaning, it can be clearly felt From 2023 to 2024, the needs of consumers, especially young people, will become increasingly diverse and personalized, giving rise to a series of new service contents and scenarios.
The shoe cleaning industry is a typical example of how to solve the life worries of young people. In the past few years, this segment has become a hot topic in the life service industry. "Among our consumers, consumers aged 18 to 35 account for 75%." Zhang Guoqing, founder of Whale Laundry, said that huge demand has driven the market supply to increase seven or eight times, and the laundry factory model serves purely online orders. began to appear, the industrial division of labor was further refined, and the industry chain effects gradually emerged.
The continuous development towards specialization and segmentation has injected new vitality into the life service market. According to Meituan data, the frequency of life service consumption is increasing year by year, and the transaction volume will increase by 100% year-on-year in 2023. Among them, new services such as door-to-door cooking, cat feeding and dog walking have grown rapidly, and related searches have doubled year-on-year since this year.
The sinking market has become the “new engine” for industry growth
"In first-tier cities like Shanghai, in addition to the demand for customized and quality services, more consumers are pursuing 'two-hour service.'" Lin Jie said that although the demand for life services in first-tier cities is strong, it is limited by housing area and Influenced by consumer free time and other factors, housekeeping services that require three or four hours are often compressed into two hours.
Due to shortened consumption time and fierce competition, Lin Jie said frankly that the market space and profitability of the housekeeping category are not as good as those in small cities in some big cities.
Many industry leaders said in interviews that compared with more mature first- and second-tier cities, the sinking market is becoming a "new engine" for the growth of life services. Meituan data shows that in 2023, the scale of user transactions in third-tier cities and below will increase by more than 80% compared with 2021, and the growth rate ranks first among all tier cities.
A relevant research report by iiMedia Research shows that at present, the services in the local life service industry are showing a situation of "with in-store services as the mainstay and home services growing rapidly". The reason is that there is huge room for development of in-store and home services in new first-tier cities, second-tier and third-tier cities. As urbanization and digitalization continue to advance, consumers in lower-tier cities will further activate their demand for various in-store and home services.
Discovering demand and then matching demand is considered to be the key to activating the sinking market. Wei Dong, General Manager of Lenovo Baiying, took Jinzhou, Liaoning Province as an example, and described the huge development potential of the sinking market: Lenovo Baiying has 2,500 service stores, basically achieving full coverage from first-tier cities to sixth-tier cities. The stores in Jinzhou were originally not special among them, but after being connected to the life service platform, the potential of the sinking market was activated, and the average daily sales of single stores in this area on the platform quickly ranked among the top cities in the country.
Digitalization and standardization drive industry quality and capacity expansion
At the 8th China Life Service Industry Conference held in November 2023, Jiang Ming, President of the China Federation of Commerce, said that service consumption accounts for more than 40% of my country’s residents’ consumer spending, and service consumption will become the main driver of my country’s economic growth in the future. Important engine.
However, at present, the upward development of the life service industry still faces a series of challenges. "For a trillion-level market, the life service industry has a significant 'big market, small entities' pattern. Each business format is in a highly discrete state. Most brands are mainly operated in a single city. The problem of insufficient and unbalanced service supply is in the peak season. Especially prominent." Gong Yuqing, head of Meituan's life service business, analyzed the current situation of the industry.
In order to promote the high-quality development of the life service industry, at the end of 2023, 12 departments including the Ministry of Commerce jointly issued the "Guiding Opinions on Accelerating the Digital Empowerment of Life Services", making arrangements from five aspects to promote the use of digitalization to drive the life service industry to a high level. The quality and diversification have been upgraded to better meet the people’s growing needs for a better life.
It is generally believed in the industry that digitization and standardization will reshape the life service system, bring more improvements and opportunities to the industry, and drive the industry to improve quality and expand capacity.
"Businesses are very familiar with business scenarios, but they have not been able to connect well with demand." Li Qilong gave an example. In the past, the online rate of service consumption such as home maintenance was relatively low, and the market did not really recognize the needs of consumers. . However, in recent years, as platform companies continue to study users and industries, consumer needs have been further explored and met, the service reach of the industry has been further extended, and service levels have been further improved.