Clothing Brand And Retailers Accelerate "Scramble" For The Two Or Three Line Market

In early April, the China general merchandise business association released the "2010 China department store industry development report".

The report points out that department stores in 2010

In fact, influenced by various factors, accelerating the competition for the two or three line or even the three or four line market has become a common choice.

On the two or three line, the fiercely competitive battleground, the strength of competition is diverse.

It includes international chain retailers (such as WAL-MART, etc.), as well as international.

It can be predicted that competition for the two or three line market will intensify in the next 10 years or even longer.

Scramble for "department store retailers"

Domestic and foreign chain retailers seize two or three lines

10 years ago, the two or three line cities and a large number of small and medium-sized city markets suddenly became "fragrant pastry".

First of all, it is a foreign retail chain enterprise.

WAL-MART, Carrefour, TESCO, big run fat, Metro, Lotte, yemai and other well-known foreign retail enterprises are now expanding in a big way, carrying out many formats, and the two or three line market is their main competitive position.

(China's first textile network: http://www.webtextiles.com/) WAL-MART (China) Investment Co., Ltd. in 2010, the total number of stores has reached 219, an increase of 25.1%; Carrefour (China) management consulting service Co., Ltd. in 2010, the total number of stores up to 182, an increase of 16.7%; their new stores are mainly distributed in two or three cities.

The focus has always been on the development of the two or three line cities, and the expansion in the prefecture level cities and the county-level cities.

In 2010, it gained the advantage in the two or three line market, and its market share reached 6.2% in the fourth quarter.

In January of this year, the 10 new stores opened by big RFA were 7 in two or three line cities.

And the eight Yat partners, Baisheng, Yang Hua Tang and Ishi Dan, which are mainly engaged in department stores, have set their sights on some small and medium-sized cities with strong spending power after opening their stores in large and medium-sized cities.

A group of domestic retailers are unwilling to lag behind.

The total number of stores in Ginza in Shandong has reached 264 in 2010, an increase of 28.2%.

In recent years, its new shops are mainly distributed in two or three cities, such as Shandong, Hebei and Henan, such as Weifang, Xingtai, Puyang and Luoyang.

In 2010, Zhong Bai group opened 84 new outlets and reached 713 outlets. Sales continued to maintain the leading position in the central and western regions.

In 2011, the company planned to add more than 100 new outlets, of which more than 20 new large supermarkets were added, and 80 new homes for community and 24 hour convenience stores.

Among them, it is mainly infiltrated into Hubei, Xiangyang, Enshi and other two or three line cities.

In 2010, Hefei Department Store Group Co Ltd ranked seventeenth in China's top 100 chain stores, with a total number of 171 stores, an increase of 25.7%.

Its sales outlets are currently located in the main two or three line and three or four line cities of Hefei, Bengbu, Tongling, Mount Huangshan, Bozhou, Lu'an, Huainan and other Anhui provinces in Anhui Province, thus initially completing the strategy of "basing on Hefei and radiating the whole province".

Chu Xiuqi, President of the Chinese Department Store Association, pointed out that during the "12th Five-Year" period, the development of department stores against the two or three line market would be more complicated and intense.

Two or three line achievements of a number of department stores "regional leader"

In fact, from the current situation of domestic department store enterprises, apart from the few national chain department stores such as Wangfujing and big business group, the larger number of main force is the regional chain retail dragon head enterprise, which relies on the two or three line market in all regions.

Shandong, Ginza, Hefei 100, Hunan BBK, Anhui commercial capital, Shandong Weifang department store and other regional chain retail leading enterprises, its development and strong foundation is to seize the development opportunities of the regional market, and constantly strengthen the results in the regional market.

In recent years, they have been making intensive efforts in the regional market, deepening the shop network to the important small and medium-sized cities in the provinces or neighboring provinces.

(China's first textile network: http://www.webtextiles.com/) take BBK as an example.

BBK department store, established in September 2001, has developed a development pattern based on "commercial real estate development, brand building as the core, and regional chain operation of small and medium-sized cities" as its model.

By the end of 2010, it had 18 department stores in two provinces in Hunan and Jiangxi, with 527 thousand square meters of business and about 3000000000 Yuan in annual sales.

At present, the company is still increasing investment and developing comprehensive commercial department in the new market.

The reason why such achievements can be achieved is closely related to the strategic direction of the department stores to lock in small and medium-sized cities.

Zhang Ludan, vice president of Hunan BBK commercial chain Limited by Share Ltd group, points out that BBK Department has developed healthily in a relatively short period of time. There are three key factors in 10 years. The first is national policy and market opportunities for small and medium-sized cities. Two is effective marketing strategy management, and three is team and execution.

She said with deep feeling: "BBK department stores began to start in small and medium-sized cities in 2001.

At that time, the focus of the development of foreign retail enterprises was large cities, and little attention was paid to small and medium-sized cities. Many retail enterprises in China also put most of their energy into big cities and relaxed the infiltration of small and medium-sized cities. Now we seem to have caught a very good chance.

In terms of the format of BBK department stores, small and medium-sized cities are blank markets in the past, emerging markets in the present era, and fundamental markets in the future.

Take Anhui Hefei 100 as an example.

Based on the growth of Anhui's regional market, Anhui Hefei 100 largest group has achieved sales scale of 24 billion 900 million yuan in 2010, an increase of 19% over the same period last year.

(China's first textile network: http://www.webtextiles.com/) Hefei has always been a very important strategic thinking of continuous cultivation in Anhui's central land.

Zheng Xiaoyan, chairman of Hefei Bai Da group, pointed out that the development of an enterprise should have all kinds of resources.

With the steady growth of residents' income, consumers' awareness and demand for brands are getting higher and higher, and the consumption structure is gradually upgrading.

Therefore, the 100 largest group will seize the golden opportunity of accelerating economic development in Anhui and Hefei, and seize the policy opportunities of a series of national and provincial promotion of consumption and support services, and unswervingly follow the road of sustainable development.

"A province with a population of 60 million like Anhui is larger than a country in some European countries.

Therefore, the most important idea is to make the Anhui market deep and thorough, and then wait for the opportunity to develop to other regions.

She said so.

Scramble for "clothing brand business"

"LV and H&M" speed up the two or three line.

There are also a large number of brand retail enterprises that compete with domestic and foreign retail chains to seize the two or three line market.

First is the luxury brand.

By the end of 2008, about 8 of the world's top luxury brands had entered the Chinese market.

In 2009, the scale of China's luxury goods market reached 9 billion 400 million US dollars. It is still the second place in the world to buy luxury goods, and has purchased 27.5% of the world's luxury goods.

It is predicted that by 2014, China is expected to become the world's largest consumer market for luxury goods.

The strong consumption power of Chinese people has doubled the confidence of many international luxury brands to the Chinese market, and has accelerated the development of new stores, especially accelerating the expansion of the two or three line city market and seizing market share.

The market has repeatedly demonstrated this.

Since 2007, the speed of opening LV stores in China has significantly accelerated. Most of its new stores are located in two or three line cities, such as Changsha, Xi'an, Qingdao, Xiamen, Wuxi, Wenzhou, Nanning, Kunming and so on.

LV watches and jewellery North Asia president also said that the future will extend to the three or four line market, and the luxury consumption capacity of the three tier cities will be no less than that of Beijing, Shanghai and other tier cities.

Not only LV, but in 2010, Prada opened a new store in addition to several new stores in Shanghai, but also opened new stores in Chengdu, Guangzhou and Hangzhou; the shops in GuZi were mainly distributed in Zhengzhou, Ji'nan, Guiyang and Taiyuan; OMEGA in China's flagship stores, apart from Hongkong, Beijing, Shanghai and other first tier cities, also opened stores in the cities of Beijing, post, and so on.

According to the survey of "2009 China luxury goods report" released by Rhodes public relations, "although 39.8% of the second tier cities often express their consumption in Hongkong, 33.3% of the consumers in eastern China will choose Shanghai, but 23.9% still think that they only want to buy nearby themselves, and there is no need to rush to the first tier cities, which has become the driving force for two or three line luxury goods stationed."

Goldman Sachs's report also has the same view.

The report points out that in the next 5 years, China's willingness to consume luxury goods will rise from 40 million to 160 million, and the main support will be two or three line cities.

The development potential of luxury goods market in China's two or three tier cities is gradually revealed. The fastest development of luxury goods in China in the future is not Beijing or Shanghai, but Chengdu, Harbin, Dalian, Chongqing, Xi'an, Wuxi, Wenzhou, Ningbo and other two or three line cities.

(China's first textile network: www.webtextiles.com) another analyst pointed out that due to Japan's massive earthquake, tsunami and nuclear radiation, luxury consumption in Japan has been on the decline, thus showing the importance of the Chinese market for the future layout of luxury goods.

Therefore, some luxury goods are now well positioned to replace Japan's role in Asia in China, and will accelerate the layout of China's two or three tier cities in the next few years.

Followed by ZARA, H&M, UNIQLO and other international fast fashion brands, the layout of the two or three tier cities has also accelerated significantly.

Japan's retail brand UNIQLO currently has about 65 stores in China. These shops are mainly concentrated in Shanghai and Beijing, and all of them are direct stores.

But next, according to its development plan, its shops will infiltrate into the second tier cities.

According to its development plan, it will expand the number of stores in China to 1000 in the next 10 years, mainly in large stores (smaller than flagship stores, 2-3 times larger than ordinary stores, and about 1000 square meters), with sales up to one trillion yen (73 billion 900 million yuan), covering the second tier cities in China.

H&M also recently revealed on its official micro-blog that the brand new store plans are Wuhan, Chongqing, Kunming, Hangzhou, Xi'an, Chengdu, Changsha and so on.

It should be pointed out that for most of the two international brands, most of them are less open shop, and their new stores are usually open in high-end department stores or shopping centers.

They are not competitors of department stores or shopping centers, but are mutually beneficial and win-win partnership with retail enterprises.

"Seven wolves" are surging in strength.

It is particularly necessary to point out that the most vigorous retail force in the two or three line market is a group of Chinese local clothing brands.

Seven wolves, Jin Ju, Li Lang, Qipai, Anta, PEAK, PEAK, XTEP, Metersbonwe, YISHION, Semir...

These men's wear, sportswear and leisure brands, which have been trained in the Chinese market for more than ten years, 20 years or even more than thirty years, can grow rapidly and vigorously. The core strategy is to rely on the vast two or three line market.

These brands have grown up, and their shop shops are densely spread across all cities in the country, especially the two or three line and three or four line cities.

They can see their familiar figure in all main commercial streets and department stores in prefecture level cities and counties in all provinces of the country.

In all of its shops, the floor shop accounts for a large proportion.

According to industry data, Anta stores broke 7000 in 2010.

In addition, brands such as Li Lang, XTEP, PEAK, and noble birds claimed that there were 7000 stores in 2010.

The industry has a formulation that, according to the speed of development, in the past three years, China will have a number of clothing brands that reach the scale of "Wan Dian", and the market will enter the era of "Wan Dian".

(China's first textile network: www.webtextiles.com) and, compared to the shops in department stores, the floor shops of these brands are generally large. The area of the shops of men's brands is usually 150 square meters, with a large two hundred or three hundred and three hundred or four hundred square meters. The leisure brands such as Metersbonwe, YISHION and Semir have started to shop everywhere in recent years, leaving thousands of shops, two thousand or three thousand square meters and three or four storeys.

For example, the famous East Street in Xi'an is less than a few hundred meters, and there are several large shops in Metersbonwe.

In these shops, plenty of space can better display the entire brand of products, and also can better and more independently promote and promote the brand image, promotion and other activities have greater autonomy.

Gradually, they have strong competitiveness in the minds of consumers everywhere.

Moreover, there are great differences between the set up models of local clothing brands and international brands.

On the one hand, these brands have shops in the large number of second-tier provincial capital cities, prefecture level cities, county-level cities and county department stores, which are mutually beneficial and mutually beneficial with department stores; but on the other hand, they are also brand retailers. They have a close confrontation with a group of domestic and foreign department stores, and seize the market share with the dense shops.

In a sense, this is a turbulent competitive force that deserves more attention from department stores.

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Two or three line market potential analysis

The two or three line market has a series of comparative advantages.

Data show that the per capita disposable income of urban residents in the eastern, central, Western and northeast regions increased by 74%, 81.2%, 80% and 82.6% respectively in 2010 compared with 2005. The narrowing of the regional economic gap results in the expansion of the consumer market and the coordinated development of regional consumption.

Statistics from the Ministry of Commerce show that in 2010, China's consumption growth rate accounted for 83.9% of the 18% provinces and cities, and the consumption growth of Tianjin, Hainan, Anhui, Jiangxi, Guizhou, Heilongjiang, Hunan and other moderately developed regions was relatively fast, with a growth rate of more than 19%.

Taking the Anhui market as an example, the whole province has about 60000000 people and 17 cities. Under the impetus of favorable policies such as the rise of central China, the economy has developed rapidly in recent years and has great potential in the market.

Anhui ranked only third in Shanghai and Beijing after the 2010 GDP ranking.

In 2010, the total retail sales of consumer goods in Anhui, after breaking through the 300 billion yuan mark in 2009, reached another 415 billion 150 million billion yuan, an increase of 19.2%, an increase of third in China and the first in Central China.

This shows the consumption potential of the central and western regions in recent years.

In fact, despite the increasingly fierce competition, brands, department stores, and property developers in clothing industries have begun to accelerate competition for the market. However, it is undeniable that the two or three tier cities still have certain comparative advantages compared with the first tier cities.

First, the cost of opening a shop is relatively low, which can achieve low cost expansion. The selling price of commercial stores in small and medium-sized cities is relatively low, labor costs are not high, and the mobility of personnel is relatively small. Urban residents are often used to shopping in fixed places, which is helpful to cultivate loyal customers.

(China's first textile network: www.webtextiles.com) the China Association of chain stores recently released the "2010 industry development survey". In 2010, the biggest difficulty faced by chain top 100 enterprises was the increase of operating costs, including rental costs and labor costs.

Competition for quality network resources and soaring property prices have led to a sharp rise in rents, a significant increase in rental costs, and limited profits in rents, which has also slowed down the number of new outlets.

Statistics show that in 2010, the cost of rents for chain enterprises rose by an average of about 30%.

Take Beijing as an example, the rent of Beijing shops rose steadily in 2010, of which the average rent of the first floor of the quality shopping center increased by 3.1%, to 616 yuan per square meter per month.

Many analysts predict that rents will rise in 2011.

The survey of industry development in 2010 also pointed out that in 2010, sampling statistics for top 100 enterprises showed that the average labor cost of chain top 100 enterprises increased by 15%, and the increase of labor costs directly reflected the increase of wages and benefits of employees.

In addition, the high rate of staff turnover and the resulting investment in recruitment and training also increased significantly.

In contrast, Gao Li International released the 1 quarter of 2011, a Chengdu class A office market bulletin showed that in the first quarter of 2011, the average rent of Chengdu central business district rose by 4.12%, and the monthly rent amounted to 129.49 yuan / square meter.

It can be found that the rent of commercial real estate in Chengdu is still higher than that in Beijing, but there is still a big gap from the absolute value.

On the whole, the comprehensive cost of property and manpower in the two or three tier cities is still lower.

Although the housing market has been regulated, the commercial real estate rents in the two or three tier cities are also rising, but in general, the cost is lower than that in the first tier cities.

Two, the market is bigger.

The overall business circle of small and medium-sized cities is naturally formed, lacking of overall consideration, lacking of relatively large scale, one-stop shopping center, business management concept, management mode and management technology need to be improved, which is conducive to upgrading traditional commercial outlets to modern department stores, and forming the influence of commercial brands, and also conducive to the wide distribution of clothing retailers.

Three is a strong purchasing power.

The high-end consumer groups in small and medium-sized cities are mainly private owners and government civil servants.

Such high-end consumer groups are easily attracted by the modernization, branding, specialization and personalization characteristics of department stores, thus becoming the main consumer group of department stores.

In addition, the department stores have superior geographical location and other factors, which makes it easy to have a strong gathering ability.

These market advantages are easier to promote the development of department stores in small and medium-sized cities and fill the commercial layout of the local market.

Similarly, this situation is also conducive to the survival of brand shops.

"Million population" medium sized cities have great potential

China's department store industry development report 2010 also shows that in 2010, some leading retail businesses from some medium-sized cities with a population of only about one million gave up very beautiful or even amazing results.

The sales volume of Shandong Weifang department store Limited was 1 billion 764 million 870 thousand yuan in 2010, an increase of 18.7% over the same period last year, and its profit was 31 million 460 thousand yuan, an increase of 218.4% over the same period last year.

Commercial building sales in Jiangsu in 2010 amounted to 636 million 980 thousand yuan, an increase of 52.7% over the same period last year, and its profit was 11 million 275 thousand and 700 yuan, up 244.4% over the same period last year.

The statistics of Weifang Municipal Bureau of statistics about 1 million 260 thousand of the urban population (2005 Statistics) showed that in 2010, the gross domestic product (GDP) of Weifang was 309 billion 90 million yuan, which was 13.3% higher than that of the previous year. The value added of the third industry increased by 104 billion 10 million yuan, an increase of 16%, and the one or two and three industries increased GDP growth by 0.4, 7.7 and 5.2 percentage points respectively.

Per capita GDP reached 34250 yuan (converted to US $5172 at the end of the year), a 12.1% increase over the previous year.

There are 1386 enterprises in Weifang over the scale of Commerce and circulation, with 124 pactions in the commodity exchange market with an annual turnover of over 100 million yuan, of which 30 are over 1 billion yuan.

In 2010, the total retail sales of consumer goods reached 115 billion 110 million yuan, an increase of 18.6% over the previous year.

According to the sales area, the urban retail sales volume reached 75 billion 170 million yuan, an increase of 21.9%, and the rural retail sales reached 39 billion 940 million yuan, an increase of 13%.

According to the industry, wholesale sales volume was 22 billion 620 million yuan, an increase of 22.8%; retail sales amounted to 81 billion 220 million yuan, an increase of 17.7%.

(China's first textile network: www.webtextiles.com) Yancheng City, Jiangsu, with a population of 1 million 586 thousand and 500 (2007 Statistics), achieved 75 billion 950 million retail sales of consumer goods in 2010, an increase of 19.1% over the same period last year, an increase of 0.4 percentage points higher than the average level of Jiangsu Province, ranking first in the province.

The total retail sales of consumer goods in cities and towns reached 71 billion 870 million yuan, an increase of 19.3% over the same period last year, of which the total retail sales of consumer goods in urban areas reached 33 billion 430 million yuan, an increase of 26.1% over the same period last year, and the total retail sales of rural consumer goods reached 4 billion 80 million yuan, an increase of 15.3% over the same period last year, and the growth rate of urban markets was faster than that of the rural market by 4 percentage points.

According to the National Bureau of statistics, the total retail sales of consumer goods in China exceeded 15 trillion yuan in 2010, reaching 15 trillion and 700 billion yuan, an increase of 18.4% over the same period last year.

Among them, the retail sales of consumer goods in Beijing in 2010 exceeded 600 billion yuan, amounting to 622 billion 930 million yuan, exceeding the total retail sales of consumer goods in 2009 for nearly 100 billion, an increase of 17.3% over the same period last year.

According to the latest criteria to distinguish the size of cities, the population scale cities like Weifang and Yancheng are at the margin of medium-sized cities.

The green paper published in the small and medium-sized cities in 2010 pointed out that in recent years, the rapid development of Chinese cities, the frequent migration of urban and rural population, the blurring of the boundaries between the agricultural population and the non-agricultural population, and the rapid expansion of the urban population scale, and the urban resident population of many county-level cities, including the county level cities and the central towns of larger counties, has reached or exceeded the critical value of 200 thousand or 500 thousand.

According to the present situation of urban population scale in China, the new classification criteria are: urban residents with less than 500 thousand of the urban population are small cities, 500 thousand ~100 are medium-sized cities, 1 million ~300 million are large cities, 3 million ~1000 are mega cities, and 10 million are large cities.

Undoubtedly, Beijing and Shanghai belong to huge cities.

However, cities like Weifang and Yancheng have increased the total retail sales of social consumer goods by about 1000000 of the population in Beijing, which is also higher than the national average growth rate.

The statistics of green paper in small and medium-sized cities also point out that 56% of the cities in the prefecture level cities are small and medium-sized cities.

According to the new standard statistics, as of the end of 2009, there were 655 established cities in China, of which 287 were built above the prefecture level, and 368 were at the county level.

Most of the urban resident population in the eastern part of the city is more than one million, and most of the cities in the central and western regions do not exceed one million.

Of the 287 prefecture level cities, 162 are small and medium-sized cities, accounting for 56%.

According to the magazine forecast, by 2020, 66% of China's middle-income consumers will come from a large number of small and medium-sized cities.

An affirmative prediction is that under the background of increasing urbanization in China and accelerating urbanization process, small and medium-sized cities will usher in a new round of rapid development in the next 10 years, even 20 or 30 years.

The urban area, population and per capita income of these cities will be greatly improved. The infrastructure such as urban roads and pportation will also be significantly improved, and the purchasing power of these cities will be further released as the social security system becomes more and more sound.

At this point, it is not difficult to understand why multiple forces will be busy trying to seize the two or three line.