China’s leading custom home industry giant “Sophia” and its high-end cabinet brand “Simi” have recently come under fire as distributors in Shenzhen were discovered to have taken customers’ money and absconded, leaving hundreds of homeowners in the lurch with potential losses reaching millions of yuan. The mismanagement of custom home distributors has once again become a hot topic attracting public attention.
Numerous homeowners took to social media platforms to reveal that the Shenzhen distributor of “Simi”, a brand under “Sophia”, suddenly disappeared, leaving hundreds of consumers unable to recover prepaid funds, resulting in several construction sites being left idle.
On the evening of February 5th, Simi Kitchen Cabinets Co., Ltd., a wholly-owned subsidiary of Sophia, released a “Consumer Protection Action Statement,” announcing the establishment of an “Emergency Task Force in Shenzhen” and initiating a categorized disposal plan.
According to reports from mainland media outlets such as the “Daily Economic News” and “Significant Matters in Shenzhen,” affected homeowners indicated that the amounts involved ranged from 30,000 to 300,000 yuan. After paying renovation costs or deposits, they encountered situations like work stoppage and difficulties in reclaiming funds. The distributor implicated in the incident is Anjiatianxia (Shenzhen) Decoration Co., Ltd.
Simi stated in its announcement that the distributor had engaged in unauthorized activities beyond the brand’s authorization, conducting hard renovation projects and selling products from third-party brands not affiliated with Simi.
Employees of Sophia, the parent company of Simi, revealed that the breakdown of the unauthorized business chain eventually triggered the overall crisis. They mentioned that while the distributor’s head did not flee, the reality of the broken financial chain made it impossible to independently fulfill all orders.
Simi, originating from a French brand, was introduced to China by Sophia in 2014. In 2023, Sophia completed the full acquisition of Simi and incorporated it under the group brand, focusing on cabinet and high-end whole-home custom business.
Sophia personnel informed Consumer Reports that although the company employs an annual authorization system for distributors, it is difficult to have real-time control over the distributor’s signed customers, actual payments, and whether they are engaged in other businesses.
This scenario highlights a major ailment in the custom home industry. Due to the industry’s long supply chain and heavy assets, the franchising model of “brand headquarters authorization + local distributor operation” has become mainstream. Under this model, brands focus on product development and brand management, while distributors enter contracts with consumers as independent legal entities, handling front-end sales and service delivery. Mismanagement of their cash flow or blind expansion can easily lead to the rupture of the financial chain, turning consumers’ prepayments into nothing and damaging the brand’s market reputation built over the years.
Recent reports from the “Daily Economic News” suggest that with the continued downturn of China’s real estate industry and fierce competition in the home market, some distributors are taking risks for profits. Leveraging endorsements from well-known brands, these distributors open legitimate stores in large malls to attract customers while secretly engaging in renovation services and selling products from small factories without the brand’s knowledge.
On the other hand, after collecting substantial advance payments or even full payments, distributors delay fulfilling contracts citing reasons like “material shortages” or “insufficient capacity,” ultimately becoming unresponsive via phone and vacating storefronts, with similar cases becoming increasingly common.
Public records show that Anjiatianxia, established in 2023, operates in various sectors including home goods sales, professional design services, building decoration material sales, residential interior decoration, among others. Sophia representatives noted that a cooperative relationship was established in 2024, with an annual authorization agreement in place.
According to the “Authorization Letter” and “Product Sales Contract” released by Simi, Anjiatianxia’s latest authorization period extends throughout 2025 and is limited to retail sales of Simi-brand customized wardrobes, cabinets, bookcases, TV cabinets, and other core custom home products. Hard renovation projects and products from third-party brands not affiliated with Simi fall outside the scope of authorization.
However, according to reports from Sina Finance, Anjiatianxia signed decoration contracts with multiple homeowners, with the highest payment for hard renovation services exceeding 300,000 yuan, and some consumers have even paid the full amount.
While consumers’ payments were transferred to Anjiatianxia’s account, the contracts were signed under the name of Shenzhen’s “Simi.” Public records reveal that both companies share the same registered address at the 23rd floor of Zhaobangji Technology Center, Building A, in Nanshan District, Shenzhen, without any equity relationship. Simi Decoration was established in 2021 and was renamed from “Guangdong Chuangjie Construction Co., Ltd.” to its current name in 2024, as well as changing its address from Nancun Town, Panyu District, Guangzhou to its current location.