KE Holdings Inc. (BEKE) reported in its Q3 2025 financial results that its home renovation business generated a net revenue of 4.3 billion yuan, with a contribution margin of 32%. Combined with the 7.5 billion yuan performance in the first half, the segment's total revenue for the first three quarters surpassed 11.8 billion yuan. Industry insiders noted that tiles account for about 5% of BEKE's total home renovation sales. Based on this estimate, ceramic enterprises integrated into its core supplier system could secure approximately 600 million yuan in revenue solely through this channel.
BEKE's growth in home renovation highlights the increasing importance of integrated solutions as a key traffic driver. This trend is further evidenced by the performance of upstream suppliers such as Dongpeng and Monalisa, which have gained substantial business through partnerships with leading renovation firms. However, challenges remain. In H1 2025, BEKE's centralized procurement ratio for home renovation and furnishing exceeded 60%, leading to a significant drop in average procurement prices. This places higher demands on cost control for ceramic suppliers. Meanwhile, mid- and small-tier enterprises struggle to compete due to cost and funding disadvantages, facing growth stagnation and market marginalization.
BEKE's 2025 strategy includes only three strategic tile partners—Dongpeng, Monalisa, and Oceano—selected from over 70 bidding participants. The stringent requirements, such as registered capital exceeding 50 million yuan and annual sales surpassing 1 billion yuan, reflect BEKE's push for supply chain optimization.
For ceramic companies, BEKE's nationwide coverage and large-scale project completions translate into substantial order volumes and brand endorsement. Dongpeng Holdings highlighted in an investor briefing that its partnership with BEKE has boosted retail channel sales by 8.03% year-to-date. Monalisa Group reported a 25.8% YoY increase in integrated renovation business, collaborating with over 6,500 contractors nationwide. Oceano has also partnered with approximately 55 top-tier renovation firms, including BEKE.
However, the centralized procurement model, while improving efficiency, squeezes margins. Larger suppliers leverage economies of scale to maintain profitability, whereas smaller players risk losses under the same pricing pressures. Long payment cycles further strain cash flow for smaller enterprises, exacerbating survival challenges.
The rise of integrated renovation channels is reshaping the ceramic industry's competitive landscape, favoring well-capitalized leaders while forcing smaller players to seek niche strategies.
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