Interview With YOUNGOR Chairman Li Rucheng

What did Li Rucheng mean for the first 33 years?

Li Rucheng, the 62 year old YOUNGOR group chairman of Limited by Share Ltd, must answer the same question: 33 years ago, Li Rucheng began to lead the family.

The company has been involved in real estate and financial investment in a high-profile way through industrial expansion, stock reform and listing. But since then, it has long been trapped in the query of "not doing the right thing". However, Li Rucheng is still at the same time and has nothing to argue about. Now, Li Cheng Cheng has put forward a new strategy of "strictly controlling the investment in real estate, adjusting the scale of investment in a timely manner, and concentrating resources on brand clothes".

Does Li Rucheng want to deny the industry model of the "real economy + virtual economy" that he used to envisage? What thoughts do he have when he again highlights the position of clothing business?

Reporter: now the real estate and capital markets are affected by the economic environment and policies.

After the slow pace of the two business sectors, should we rethink the way out for these two industries?

Li Rucheng: economic cyclical growth deceleration is normal, just like people sometimes catch cold.

But I think the overall trend of China's economic development is definitely promising.

I am still optimistic about the future of the real estate industry, because from the perspective of demand, the real estate industry needs more than the supply, and there is still much room for development and demand for the living standard of the Chinese people.

As for the financial market, not to mention, it has just started, and it has lasted for more than 10 years. I believe that the future can still be expected.

Reporter: before YOUNGOR,

The real estate, financial investment, the outside world is called "do not work properly", then YOUNGOR to engage in these two virtual economy, in order to make quick money, or in order to eventually turn YOUNGOR into a company like Buffett's Berkshire Hathaway?

Li Rucheng: people who know YOUNGOR will be clear about the fact that we are exploring other industries without giving up our main business.

I believe that in the course of an enterprise's development, it is definitely an ongoing exploration. However, the outside world is saying that we are "not doing our jobs".

In addition, most Chinese enterprises are very young. In order to survive and develop, it is hard to say which is the main business, because the main business is changing with time and the development of the enterprise itself.

Let's take a look at Japanese enterprises. Taking TOYOTA and Itou Chumori as an example, the former used to make textile machines, and now they have made cars, finance and so on, and Itou Chumori has also started from textile. After more than 150 years, almost all industries have invested.

Behind the garment enterprises in developed countries, there is actually a consortium supporting. If there is no large-scale financial support, it is very difficult for the enterprise to survive for decades or centuries.

By contrast, Chinese enterprises have their own difficulties, where companies are going to develop and where money comes from. Many enterprises are engaged in some other industries.

If YOUNGOR did not enter real estate and financial investment in the past, it would not be possible to have a net asset of 20 billion yuan.

Cooperation and competition.

Reporter: is the structural adjustment of the three major industries of clothing, real estate and finance a temporary decision or a long-term strategic adjustment?

Li Rucheng: regarding the status of clothing in YOUNGOR, I have spoken many times on different occasions. Now I repeat that the clothing industry is the core industry for YOUNGOR to create an international brand and to build a centennial enterprise.

We need to refer to other enterprises if we ask about diversification.

There are many examples of global diversification success, such as GE (GE) and TOYOTA.

But each enterprise has its own advantages and characteristics, we can not learn TOYOTA, nor learn GE, YOUNGOR is YOUNGOR.

But that does not mean that we do not adjust or change.

On the whole, there will be "three pformations" in the next five years, namely, the pformation of operation and control mode, the pfer of production layout structure, and the inheritance of team and culture.

Industrial innovation, brand innovation, technological innovation, incentive system innovation, management and control mode innovation are the main themes of YOUNGOR in the next five years and more.

Reporter: after highlighting the importance and status of clothing industry, what are the strategies and Strategies of YOUNGOR in this business?

Li Rucheng: this year, I put forward an overall strategy in the company, that is, YOUNGOR should seize the historical opportunity of the rapid development of the domestic garment market, take "intensional growth" as the thrust of brand upgrading, consolidate and strengthen the core competitiveness, and continuously enhance the market share and brand value.

So how can we effectively implement this strategy?

Expand the coverage of target customers; secondly, use our information and contacts resources in Milan studios in Italy to accelerate the introduction and cultivation of excellent talents, enhance the design ability of brand studios, and enhance the brand image and value; thirdly, fully integrate the small vertical industry chain, strengthen the R & D innovation of functional products, and actively try to consolidate and tap the core competitiveness of product development for large flagship stores; fourth, focus on resources to continue to promote the development of traditional marketing channels and the adjustment of store image, explore the linkage effect of new brand entity stores and network marketing, continuously improve the share of market sales and brand reputation; and finally, strengthen institutional innovation and information construction, so as to cultivate and perfect the supply chain, realize the integration and sharing of internal and external resources, and consolidate the foundation of enterprise development. I put forward five requirements: first, through technological innovation, process development, function optimization and multi brand operation, we will continue to extend the brand series, enrich the brand connotation, and further enhance the gross margin of products.

Reporter: according to the annual report of YOUNGOR board of directors, the plan is that domestic clothing sales increased by more than 20% this year. What is the basis of this index?

Li Rucheng: from the point of view of the distribution of clothing business, we have basically formed 5 major brand matrixes, and divided 5 major brand departments and their respective studios. This will effectively realize independent operation in different market areas.

From the perspective of overall operation, we have increased investment and strengthened channel construction on the one hand. Last year, we had invested more than 800 million yuan to make hardware reserves for upgrading the brand image. On the other hand, we strengthened service upgrading and software update to enhance our soft power.

These two conditions, coupled with brand studios' efforts in innovation and design, are believed to help YOUNGOR achieve more than 20% growth in the domestic market.

With the active reduction of foreign trade business, the focus of this year's market has shifted to the brand clothing industry with higher added value. The gross profit margin of clothing has increased to 45.41%.