Core Viewpoint - The article emphasizes that Kuka Home is transforming from a real estate supplier to a lifestyle leader, focusing on user value and retail transformation to drive sustainable growth [1][7]. Group 1: Historical Context and Market Dynamics - Kuka Home originated from a small furniture company established in the 1990s, which has now become a leading player in the home furnishing industry [2]. - The home furnishing market in China has seen a significant decline, with new home sales dropping by 40% compared to peak levels, leading to a cautious consumer approach towards home purchases [2][3]. - The top five home furnishing companies in China hold less than 15% market share, indicating a fragmented market with structural opportunities for growth [3]. Group 2: User-Centric Approach and Business Transformation - Kuka Home is shifting its focus to user value, aiming to redefine its role from a real estate supplier to a lifestyle leader, emphasizing long-term value creation [7][8]. - The company is undergoing a transformation that includes digital capabilities enhancement and a new business paradigm centered around user insights [4][8]. - Kuka Home's strategy involves a comprehensive capability building and organizational change to align with user needs, including digital marketing, product design, and supply chain management [8][9]. Group 3: Product Innovation and Market Adaptation - Kuka Home has successfully transitioned from fixed sofas to functional sofas, overcoming significant industry barriers and establishing a unique technological advantage in the functional sofa category [12][15]. - The company has invested heavily in R&D, drawing inspiration from the automotive industry to innovate its product offerings [14][15]. - The growth of functional sofas has been promising, with continuous investment expected to enhance future development prospects [16]. Group 4: Integrated Value Chain and User Experience - Kuka Home is implementing a value chain integration strategy to enhance user experience across different product lines, focusing on holistic home solutions [24][25]. - The company aims to provide deep service through its integrated approach, enhancing customer relationships and overall user value [29][30]. - The establishment of a comprehensive infrastructure, including AI design platforms and efficient delivery systems, is crucial for maintaining high service quality [31][33]. Group 5: Retail Transformation and Operational Efficiency - Kuka Home is transitioning from a wholesale model to a retail-oriented approach, emphasizing end-user sales performance as a key metric [39][50]. - The company has developed several foundational systems to support its retail transformation, including a user marketing system and a retail distribution system [41][43]. - The integration of data-driven decision-making processes is expected to enhance operational efficiency and improve customer engagement [48][49]. Group 6: Global Expansion and Strategic Partnerships - In 2024, Kuka Home's revenue from domestic and international markets was 9.4 billion and 8.4 billion respectively, with international revenue showing an 11% increase [53]. - The company has established production bases in Vietnam, Mexico, and the United States, aiming to leverage local manufacturing capabilities for global expansion [55][56]. - Kuka Home is shifting from OEM/ODM to OBM strategies, targeting higher-end markets and enhancing brand influence in emerging markets [58][59]. Group 7: Governance and Long-Term Strategy - The governance structure of Kuka Home allows for significant autonomy for the management team to drive transformation, with a focus on strategic clarity and long-term goals [60][63]. - The company is committed to a long-term investment strategy in infrastructure and technology, which may not yield immediate profits but is essential for industry restructuring [63][64]. - Kuka Home's approach emphasizes user demand as a guiding principle for its strategic decisions, aiming to build a sustainable and resilient business model [66].