Core Insights - The crisis of the internet home decoration platform "Zhu Fan Er" has led to over 800 construction sites nationwide being halted, highlighting significant issues in the company's operations and financial stability [1][3][9] - The incident has prompted industry associations in Beijing and Shanghai to intervene, offering support to affected consumers and coordinating with local home decoration companies to complete unfinished projects [1][2] - The crisis reflects broader structural problems within the home decoration industry, particularly the prevalent "pay first, renovate later" model, which poses risks to consumers and has led to cash flow issues for many companies [2][8][10] Company Overview - "Zhu Fan Er" was founded in 2015 by four Tsinghua University graduates and is known for its innovative "content-driven + community e-commerce" model, which aimed to reduce customer acquisition costs and improve conversion rates [4][5] - The company quickly gained popularity and secured multiple rounds of financing, including a notable 200 million yuan in Series B funding in June 2021 [5][6] - Despite promoting a "pay after construction" model, consumers were still required to make advance payments at various stages of the renovation process, leading to complaints about refund difficulties [5][6] Financial Issues - The company faced severe cash flow problems, exacerbated by the need to divert funds from renovation projects to address issues in its group buying business, which had become unsustainable [6][7] - Reports indicate that "Zhu Fan Er" has defaulted on payments to numerous suppliers, leading to significant backlash and claims of unpaid debts [7][9] Industry Implications - The crisis at "Zhu Fan Er" is seen as a signal of a potential shift in the home decoration business model, with some companies exploring a "pay after renovation" approach to mitigate risks for consumers [2][10] - The overall home decoration market has been experiencing turmoil, with a significant number of companies facing bankruptcy, indicating a need for structural changes within the industry [9][10] - Industry experts suggest that adopting a "pay after renovation" model could enhance consumer protection but may also increase financial pressure on companies already struggling with cash flow [10]