Industry Insights | With the rise of new consumer mainstays, one-stop wedding services are becoming an inevitable trend

The wedding service industry mainly consists of four sectors: 'wedding planning, wedding photography, wedding dresses, and banquet services'. It is closely related to industries such as hotels, tourism, home visits, and baijiu, and also covers product consumption such as jewelry, wedding goods, and wedding cars. It is gradually expanding to include industries such as finance, real estate, home improvement, maternity and infant care, and health.

The consumption scenario of wedding services has certain particularities, with low-frequency consumption and long decision-making cycles being the core characteristics of wedding service users' purchasing behavior.

Wedding services are generally a one-time consumption with low frequency and low likelihood of repeat purchases. Under normal circumstances, as the wedding ends, users also tend to leave, making it difficult to develop user value a second time. However, the derivative markets for wedding services, such as finance, maternity and infant care, beauty, and other industries, have a higher repeat purchase rate and thus greater market expansion potential.

The particularity of wedding service consumption scenarios also brings positive aspects to industry development. It is precisely because wedding service consumers have a low frequency of consumption and weddings carry unique emotional and social attributes that consumers are less sensitive to service prices, making them more receptive to premium products and services.

Wedding services involve numerous sub-sectors, ranging from banquet services to floral decorations. Consumers need to make purchasing decisions about the service content of more than a dozen sub-sectors, which prolongs the overall decision-making cycle. The average service per customer (referring to the total average consumption amount per couple of wedding service consumers for wedding planning, bridal photography, and other services during the pre-wedding period) is more likely to fluctuate during this period.

Currently, the information transparency of wedding service industry products and services is low, and service providers often offer additional services, which can also lead to higher service provider prices per customer.In the future, with the diversification of products and service categories in the wedding service market, consumers' investment in weddings is showing a trend of doubling, creating a considerable profit margin for the wedding service market.

At present, the wedding service market in China mainly focuses on wedding banquet services, accounting for about 50%; followed by wedding planning consumption, accounting for about 30%. From 2016 to 2021, the overall annual compound growth rate of China's wedding service market was 18.2%, indicating a relatively rapid market growth and strong market demand.

Compared with developed countries, the penetration rate of wedding planning services in China is relatively low, accounting for 31% of the overall wedding service market. In the wedding service markets of the United States and Japan, the market share of wedding planning services is 80% and 35%, respectively. There is still a significant gap between China's wedding planning service market and that of developed countries. In the future, driven by consumption upgrading and the young generation's pursuit of unique weddings, the Chinese wedding planning service market will gradually release its growth potential and enter a period of vigorous development.

Wedding banquet services, wedding planning, wedding photography, and wedding dresses are the four core businesses of wedding services.

• Traditional business model

Currently, there are over 2.2 million businesses providing wedding banquet services in China, with an industry average profit margin of 50%-60%. Wedding banquet service providers usually choose locations within the city where the wedding is held, thus there are clear regional characteristics among them. Wedding banquets are mostly independently organized by hotels, and there are significant differences among different service providers. The replication ability of wedding venues and services is poor, and the industry lacks standardized and unified standards. Therefore, wedding banquet service providers find it difficult to break through regional restrictions and achieve large-scale development.

The wedding planning market in our country is generally fragmented, with over 1 million wedding planners and suppliers, including many small-scale enterprises and studios. The recognition of studios and small businesses needs to be enhanced, as this leads to higher customer acquisition costs. In addition, there is a shortage of excellent wedding planners, making it difficult for businesses to form stable brand images and reputations, thus compromising their profitability. New-generation wedding consumers are paying increasing attention to bridal photography and wedding dresses, and their quality expectations for services provided by suppliers are also gradually rising.

Overall, the four core businesses of China's wedding service industry are relatively fragmented. Moreover, due to the service characteristics of each link, it is difficult for enterprises to enhance profitability through economies of scale. Therefore, it is challenging for the wedding service industry to meet consumers' demand for convenience. The industry urgently needs to integrate all industry resources to meet consumers' needs for convenient consumption and reduce costs through economies of scale to enhance enterprise profitability.

• One-stop service model

The one-stop wedding service provider has transformed its single-player combat model into an industry collaboration model, addressing the dual pain points of both the supply and demand sides and driving the industry into an integrated development phase.

From the supply side, coordinating suppliers across different links can improve the replicability of service processes, reduce enterprise customer acquisition costs, and increase profit margins.

From the demand side, the one-stop service model eliminates the need for consumers to connect with multiple suppliers, meeting their convenience needs and improving their decision-making efficiency. At the same time, it provides consumers with a variety of theme plans and assigns a full-process professional team to meet consumers' personalized and diverse needs.

From the timeline of engagement, the wedding service industry is divided into four core sectors: 'engagement planning & wedding arrangement & wedding day & post-wedding reception'. Services are planned and adjusted according to customer needs, and professional wedding planners and butlers are equipped to assist in promoting the planning and reception, thereby achieving perfect engagement preparation.

Compared to the fragmented and disorderly state of traditional wedding service providers, the one-stop service model integrates multiple links in the industrial chain, compresses costs, and creates a higher profit margin. One-stop wedding services will become a high-growth segment in the future wedding service market.

The wedding service industry is mainly developed around four core industries plus supporting sectors. The upstream of the industrial chain consists of raw material suppliers, including textile raw material suppliers for clothing and garment processing manufacturers, agriculture, forestry, animal husbandry, and fisheries industries for food, as well as food processing suppliers. Other sectors include photography equipment and floral decorations manufacturers. In recent years, consumers have placed increasing emphasis on wedding preparations, their purchasing power has improved, and their willingness to consume continues to grow.

The consumer group for wedding services in our country is mainly born after 1995 and 2000. Among them, consumers in high-tier cities are more active in wedding preparations. Some have returned to their hometowns to get married and develop business after living in high-tier cities, but this accounts for a small proportion (about 14%).

From the perspective of consumers' attitudes towards wedding preparations, their willingness to spend on wedding services has been increasing year by year. Currently, the average cost for a consumer's wedding is 174,000 yuan, which is 8.8 times the average monthly income of both parties, and 42% of consumers have spent more than their original budget.It further indicates that consumers in our country still have a strong demand for wedding services, and the market for wedding services has broad prospects for development.

The rapid growth of the macroeconomy and the steady increase in per capita disposable income have promoted the development of China's wedding service market.

With the rapid development of the Chinese economy, per capita GDP maintained a compound annual growth rate of 7.6% from 2016 to 2020, reaching 72,300 yuan in 2020. Per capita disposable income also maintained a compound annual growth rate of 7.8% from 2016 to 2020, reaching 32,200 yuan in 2020. It is expected that per capita GDP and disposable income will continue to grow over the next five years. The rapid economic growth and improved consumption capacity have promoted a steady increase in wedding expenses among newlywed couples in China, and the wedding service market in China will also expand further.

The shift in the main consumer group brings new opportunities to the growth and integration of the wedding service market.

The newlywed population in China is mainly concentrated in the age group of 20 to 34. The new generation represented by those born after 1995 and 2000 has become the main consumer group in the wedding service market. Compared to past consumers, the new generation grew up during China's period of rapid economic growth, and their consumption concepts and habits were influenced by several waves of consumption upgrading. Therefore, they are more active in wedding service consumption.

In recent years, the rapid development of internet self-media in China has further stimulated consumers' willingness to spend on wedding services. This is mainly reflected in increased investment in wedding-related services such as banquets, wedding photography, wedding dresses, and wedding planning. The demand for wedding services has become increasingly diverse and refined, thereby promoting the growth of China's wedding service market and the development and integration of segmented service sectors.

In the future, with the rise of new consumer mainstays, China's wedding service industry will transform from general-purpose to personalized services, from cost-effective to value-for-money services. The service model will also evolve from a chain structure to a networked form, and one-stop wedding services will become an inevitable trend.

• New consumer mainstays pursue new experiences of 'personalization' and 'value for money'.

Post-95 users have become the main force driving growth in the wedding market. They are more willing to embrace new things, pursue ultimate personalization, and prefer products and experiences with a sense of design and uniqueness. Therefore, their willingness to consume theme weddings is extremely high. Compared to price, they care more about brand awareness and the high quality of product services. As a result, with the younger generation of consumers, the wedding service industry will tend to specialize in order to meet consumers' personalized and customized needs.

• "One-stop" wedding services are the trend of the times

One-stop wedding halls are mostly standalone or distinctive buildings, catering to different wedding scene needs of consumers. At the same time, one-stop wedding providers are equipped with professional teams such as wedding consultants, planners, stylists, photographers and videographers, MCs, wedding supervisors, florists, and decorators, offering high-quality, customized full-process wedding services to consumers. Compared with the fragmented and disjointed operations of traditional models, the one-stop model better meets the customized and convenient needs of young consumers.