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        Housekeeping Service Industry Presents Super Opportunities for Investment

        2021-11-26 15:58:57ByLilyWang
        China’s foreign Trade 2021年4期

        By Lily Wang

        W ith the improvement in peoples material life, the accelerated aging of Chinas population and the implementation of the thirdchild policy, the market scale of Chinas housekeeping service industry has been increasing rapidly in recent years. The housekeeping service has become a necessity for some families, and such demand is breeding a trillion-level market.

        According to data from Tianyancha, the corporate names of more than 1.93 million enterprises which are still in operation include the word “housekeeping”in their scope of operation. In addition, according to a CCTV report, since June this year, housekeeping service orders, including disinfection, cleaning and washing services, have increased by 600% from last year.

        In fact, as early as 2019 there was good news about national policies. The“Opinion on Improving the Quality and Expanding the Scale of the Housekeeping Industry by the State Council” proposed encouraging universities and colleges to set up majors focused on housekeeping services. In principle, there should be at least one college institution and several vocational schools that set up housekeeping majors. According to rough estimates, approximately 122 college institutions have set up 125 majors related to housekeeping in China. However, Chinas housekeeping service industry still has a labor gap of approximately 17 million people. The labor shortage also presents huge opportunities.

        In order to better study the trends in the housekeeping service industry, iiMedia Research issued the 2021 analysis report on development trends and investment opportunities in Chinas housekeeping service industry. The report focuses on the trends in Chinas housekeeping service industry and gives a detailed analysis of the segmented sectors, business models and industry chains of the housekeeping service industry. It also lists challenges faced by the industry through business cases and makes predictions about the future trends in the housekeeping service industry.

        High penetration rate for housekeeping services in the Chinese market

        iiMedia Research data shows that housekeeping services have a high penetration in the Chinese market, and approximately 74% of users have used housekeeping services. iiMedia analysts believe that, with the rapid recovery of the domestic economy since the pandemic, the market demand for housekeeping services will gradually recover, and the scale of the industry is expected to further expand.

        In addition, Chinas housekeeping service market grew rapidly. The data shows that from 2015 to 2020, the market scale of Chinas housekeeping service industry increased steadily year by year, reaching RMB 878.2 billion in 2020, which was a year-on-year increase of about 26.0%. iiMedia analysts also believe that as the policies promote the standardized development of the industry, the upgrade in peoples consumption and the market demand for care services for children and the elderly increase, the prospects of the housekeeping service market will be much greater. It is estimated that the market scale of the housekeeping service industry will exceed RMB 1 trillion by 2021.

        The data shows that in 2021, male consumers account for a slightly larger proportion of all the consumers in Chinas housekeeping service industry. In terms of age group, middle-aged and young consumers take up the largest proportion, with people aged between 31 and 40, and aged between 26 and 30 accounting for 38.4% and 28.7% respectively. Meanwhile, most consumers live with their parents or children and have a great demand for housekeeping services.

        From 2015 to 2020, the average salary of employees in Chinas housekeeping service industry continued to grow. In 2020, the average salary for the housekeeping service industry was approximately RMB 9,000, an increase of approximately 28% over 2019. As of April 28, 2021, the salary range of employees in Chinas housekeeping service industry is between RMB 2,000 and RMB 20,000, of which the number of employees with a salary between RMB 6,000 and RMB 8,000 is the largest, accounting for 24.4% of the total. The report believes that, compared with the average salaries of other industries, salaries in the housekeeping service industry still have room for growth in the future.

        Deep impact of the price

        Data shows that nearly 50% of consumers believe that housekeeping services are not life necessities. Secondly, high prices is one of the main reasons affecting consumers use of housekeeping services. iiNedia analysts believe that consumers have reservations about whether they will consume housekeeping services in the future, and the value of services will directly affect the direction of consumer development of the industry.

        The data show that most consumers in the housekeeping service industry have signed labor contracts. Third-party agreements between the employer, the employee and housekeeping companies are the most popular, accounting for 40.4%. These labor contracts should protect the legal rights of all parties involved. iiMedia analysts said that as government policies improve, the housekeeping service industry becomes better in terms of regulation and service quality, and the industry is entering a new phase of quality upgrading.

        Industry experts believe that, on the one hand, the housekeeping industry is changing from a “small and scattered business structure” to being brand-oriented, specialized and digitized. Both traditional housekeeping enterprises and internet housekeeping service platforms are building their brands rapidly, and the competitive barriers of the top platforms have taken form quickly. However, there are no leading enterprises in the housekeeping service industry, and the industry is still open to all start-up entrepreneurs. Furthermore, with the diversification of customers needs for housekeeping services, the housekeeping service enterprises are required to provide more professional services. Besides traditional housekeeping services such as house cleaning, maintenance and childcare, other services such as psychological consultations, medical care and nutrition management have sprung up rapidly. The industry is expecting more professional talent and services. In addition, as more and more customers turn to the internet for housekeeping services, the digital transformation of housekeeping service enterprises is also advancing rapidly. Digital operation, digital customer acquisition, intelligent customer service, user analysis and demand forecasting have been widely applied in the housekeeping industry.

        On the other hand, the profit model of the internet housekeeping service needs to be solved, and the legislation on the industry is needed quite urgently: using traditional internet methods to conduct housekeeping services will produce big problems. The housekeeping industry focuses on assets and operations. Burning capital to obtain traffic, faking sales revenues and listings and cashing out will not work for this type of business. Take Swan Daojia as an example, the company saw total losses of RMB 1.965 billion from 2018 to Q1 2021, while the revenue during the same period was only RMB 1.917 billion. The building of capital produces little profits, which aroused doubts in the industry. For internet housekeeping services, it is important to leverage digital tools to reduce transaction barriers, improve the operation efficiency, develop more professional talent and improve the user experience, in order to raise the industrys competitiveness and profitability. In addition, it is important to cultivate and retain talent, protect the legitimate rights and interests of workers through legal and institutionalized means, effectively curb malicious arrears and other acts that infringe on the legitimate rights and interests of workers, and jointly promote the legalization, specialization, digitization and sustainable development of the housekeeping service industry.

        Lack of legal regulations curbs industry development

        Su Haopeng, Professor of the Law School of the University of International Business and Economics, pointed out that in recent years, in the face of the huge market demand, a large number of businesses have poured into the housekeeping service industry. However, the entry threshold for the industry has become very low due to low registration costs and simple procedures. Such low thresholds results in uneven levels of professionalism and management of the housekeeping service companies. The quality of housekeeping workers cannot be guaranteed, and their rights and interests are difficult to protect.

        Fang Yan, deputy director of the Shaanxi Lawyers Association, emphasized that the housekeeping industry is facing many problems. One of the main reasons for this is the lack of legal regulations.

        Fang Yan said that currently, China has no special laws regarding the housekeeping service industry. There is only an institutionmade regulation known as the “Interim Regulations on the Housekeeping Service Industry”. It has been about 10 years since the regulation came into effect on Feb. 1, 2013. The level of legal regulations, and the lack of new regulation contents have set limits on the prosperous development of the housekeeping service industry.

        In recent years, in order to shore up points of weakness in the housekeeping service industry, the regulations are improving.

        The office of the State Council issued the Opinions on Promoting the Quality and Scale of the Housekeeping Service Industry, and the National Development and Reform Commission and the other four departments issued a notice on carrying out the pilot work of the “Pioneer”action for the promotion of the quality and scale of the housekeeping service industry. A ministerial joint conference mechanism regarding the promotion of the housekeeping service industry was also established by the National Development and Reform Commission and the Ministry of Commerce. In recent years, in order to promote the quality and scale of the housekeeping service industry, the topdesign has been continuously improved.

        Meanwhile, some local governments have created housekeeping service regulations, so as to standardize the housekeeping services, protect the legal rights of the related parties, and promote the healthy development of the housekeeping service industry.

        Fang Yan suggested clarifying the legal status of housekeeping service personnel and straightening out the relationship between housekeeping service institutions, housekeepers and customers. It is important to enhance the management of housekeeping service companies and housekeepers by setting up an entry threshold and a dynamic management system. Moreover, it is important to clarify, with the administrative authorities, the housekeeping service industry and delegate legal enforcement powers to same. The purpose of this is to distribute responsibilities and create synergies to implement the supervision and regulations, and to change the current conditions of unclear rights and responsibilities. It is also necessary to clarify the responsibilities and tasks of industry associations, and to strengthen the management service responsibilities and self-discipline requirements of housekeeping service institutions.

        Wang Shuxia, director of the China Housekeeping Service Industry Association, said that it is hoped that more and more experts, scholars and companies can contribute resources to conducting in-depth and far-reaching research about Chinas housekeeping service industry, and can pave the way for the development of the industry towards a higher level.

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