The cooperation between Kujiale and Hivision might trigger a transition in the household industry; a new sales method may emerge – integrating online and offline sales.
► Kujiale’s high speed in graph making helps it attract many investors – it raised a total funding amount of USD 234.84 million for five founding rounds.
► The shock of COVID-19 is likely to decrease firms’ profits in 2020, but this is also a good opportunity to start online design.
Household firms began changing their marketing strategies recently, that they might not merely rely on offline sales. Hivision, a household firm concentrating on R&D, manufacturer and sales, is collaborating with Kujiale to expand its distribution channels. This cooperation could be seen as a combination of online and offline sales and integration of AI and the traditional household industry.
As a VR-driven home design platform, Kujiale puts technology into household design, trying to help shorten the gap between virtual photos and real products. Regarding its primary services, Kujiale offers clients 3D cloud designs, 360-degree virtual tours and personalized designs. Moreover, the firm’s three founders all graduated from the University of Illinois at Urbana-Champaign (UIUC), and worked as engineers in NVIDIA, Google and Amazon before.
With regard to fundraising, the firm has completed five rounds to gain a total bankroll of USD 234.84 million. Specifically, GGV capital and IDG capital are the most significant two investors, occupying 50% of total funding so far. Moreover, USD 200 million were from the Series D funding, implying the firm is entering into a more stable stage – in the middle and late investment stage.
How could Kujiale become the target for venture capital? This may be due to its rapid speed for making graphs, high coverage for 3D house types and stable profitability in the household industry. In the online home decoration industry, the time of making a design is critical to win over other competitors. As for Kujiale, it can form a design sketch within five seconds, and show decoration plans in five minutes. On average, it could present 1 million design sketches every day. As for coverage rates, the design platform has covered 90% of 3D house types in China. Additionally, it cooperates with massive enterprises, such as MIUI and Markor Furnishings.
When it comes to the profitability, the firm’s gross profit margins were over 30% in both traditional and intelligent household industries, and there are no comparatively large fluctuations in their profits. In other words, the household industry has been quite mature during these years, which might be an excellent opportunity for innovative firms like Kujiale to join. Precisely, people are expected to retain their current demand in the household industry, and there would be more potential users for online home decoration in the future.
Due to the shock of COVID-19, 20% of incomes in the household industry are expected to drop in 2020. Considering the increasing popularity of online shopping, the collaboration between Kujiale and Hivision could be regarded as a win-win situation. Specifically, Kujiale can expand Hivision’s distribution channels, attracting more customers online. On the other hand, Hivision can further increase the digital platform’s coverage rates, increasing its popularity to some extent.
All in all, COVID-19 provides a good opportunity for the household industry to change. Offline sales could not meet individuals’ increasing demands, and it is a suitable time to extend AI technology into decoration. Also, the traditional household decoration is pretty invariable – it only offers clients plain designs. On the contrary, a VR-driven platform like Kujiale could solve this issue by providing efficient customization with the help of AI and VR. In the future, more and more household firms might start combining online and offline sales.