Consumer Goods Crisis: Clothing Industry Faced With Domestic And Foreign Troubles

There is no doubt that this is the worst era. In the first half of 2013, China's GDP was 24.8 trillion yuan, up 7.6% year on year, which was the lowest growth rate in this century except during the financial crisis. At the same time, the total import and export volume in the first half of the year was US $2.0 trillion, with a year-on-year growth of only 8.57%. Compared with the double-digit growth rate in previous years, the growth center of foreign trade moved down significantly. In this context, the domestic consumer market is regarded as a lifeline.

However, in the investment driven domestic market, there is still no doubt about this transformation. In fact, domestic enterprises are also facing the crisis of rising costs, squeezing foreign brands, and the most important mode change of consumption and retail.

To this end, we have made a special issue of "the beginning and end of the consumer goods crisis", trying to sort out the industries related to consumer goods and retail. First, we choose the online market with the largest capacity clothing Category, trying to analyze the difficult plight of the garment industry caused by the scale orientation and channel inefficiency.

Dressing and eating is the top priority of people's life, and clothing is a very suitable industry for industrial operation. As a result, this industry has given birth to the most magnificent consumer goods market in China, as well as the largest brand group in China at present.

After the reform and opening up, Chinese processing and manufacturing enterprises have joined the global apparel industry chain as OEM manufacturers. OEM used to be a very profitable business, which enabled Chinese garment manufacturers to complete the accumulation of original capital. By the end of the 1980s and the beginning of the 1990s, the brand awareness of clothing enterprises had begun to sprout. Now well-known clothing brands (such as PEAK and Li Ning in the sports industry, Seven Wolves and Nine Muwang in the men's clothing industry) were all founded in that period.

　　 Standardization and high premium wins

Although different subdivisions Clothing industry They started almost at the same time, but their next development rhythm is far from each other.

Sporting goods industry is a relatively standardized industry, which is the most ideal experimental field for clothing brands. The early consumption concept of Chinese consumers to wear sportswear as a fashion and the 2008 Beijing Olympic market have boosted the development of the industry. As a result, sports brands have become the earliest, fastest growing and largest group in China's clothing industry. The scale of the six major local sports brands, Li Ning, Anta, Dongxiang, Tebu, 361 ° and PEAK, has exceeded or approached 5 billion yuan as early as 2008, and the revenue of Li Ning and Anta even approached 10 billion yuan. These brands all organize their sales by joining in. If we consider the effect of channel amplification, their sales in the terminal market are mostly more than 10 billion yuan.

The attributes of the standard make Sporting goods industry The market concentration of is very high. Quanzhou is known as the hometown of sports goods in China, and all the local first-line sports brands except Li Ning and Dong Dong are from this area. There are more than 3000 sports brands registered here, but their scale and influence are far behind the first tier local brands.

Compared with sportswear, men's wear is more personalized. However, compared with women's clothing, men's clothing is relatively standardized. Some sub industries, such as business suits, not only standardize product attributes, but also support higher premiums. Therefore, this industry has become the first mature segment clothing industry in China. The main business of Shanshan, China's first listed clothing brand, in its early days was business suits.

Although formal clothes are suitable for brand operation, the scale of the industry is relatively small and it is easy to reach the ceiling. Youngor and Shanshan, two leading brands in the industry, have adjusted their main businesses in this century. Relatively speaking, the market capacity of business casual men's wear is larger. This industry is another fast growing and mature segment of men's clothing after business suits. Seven Wolf, Lilang, Jiumuwang, Jinba, Qipai and other brands all come from this industry.

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After entering this century, some more fashionable and personalized Men's wear brand For example, Mark Huafei and GXG began to emerge.

One of the subdivisions that I have to mention here is the popular casual clothing. Whether it is business suits, business leisure, or business fashion brands, as long as the word "business" is used, consumers' affordability can be guaranteed. However, the price affordability of the general public is very low, and too high a premium is difficult to be accepted by the market, which requires the public leisure clothing brands to constantly optimize and improve their channel efficiency. Local leisure clothing brands such as Meibang, Sema and Yichun have established their brands as early as the mid-1990s, but their development has been restricted by the low channel efficiency.

As for women's clothing, it can be said that it is the Waterloo of Chinese local clothing brands. domestic Women's wear industry The top three brands are Only, Vero Moda and EGGER, all of which are foreign brands. As we all know, women's wear is a large market, and domestic brands have been involved in this field for a long time. Women's wear brands such as Goliath and Oushili have started to cultivate this market as early as the end of the last century. But more than a decade has passed, there is still no local popular women's wear brand that can compete with sports goods, men's wear and international women's wear brands. The situation of high-end women's wear is relatively good. Lucie, white-collar workers, Masefield, etc. are the top local brands in the industry.

　　 Children's clothing And underwear is also a very important part of the clothing industry. But on the whole, the development of these two industries in China is not very mature.

The same starting point and similar development route have finally formed a completely different market competition pattern. We can sort out the following key development logic:

The key word of the industrial age is "scale effect". A clothes The cost of producing 10000 pieces of clothing is certainly different from that of producing 1000 pieces of ten types of clothing. The factory is more willing to accept the former. However, the production of 100 pieces of 100 types of clothes may be a job that all factories are unwilling to accept. Only large-scale operation can make business profitable.

On the other hand, in the commodity circulation link, low channel efficiency is a constraint for all brands. In the era of planned economy, there was no market for free circulation of goods. After the reform and opening up, China's commodity circulation system was almost established on the basis of nothing. The agency franchise system is now widely criticized, but it is the end of the 1990s that local clothing brands began to widely use this model for expansion, only a decade ago. Agents at different levels lead to price increases at different levels.

The result of scale orientation and channel inefficiency is that standardized and high premium industries are booming, while personalized and popular categories are struggling. Specific to Clothing industry The former corresponds to sports goods, business men's clothing High end women's wear And other industries, the latter corresponds to the public leisure clothing, women's clothing and other industries.

　 International brands come from behind

But in recent years, new shocks have come one after another.

The first is the decline of industry prosperity. After entering 2012 spin The year-on-year growth rate of industrial added value of the clothing industry has dropped significantly from the previous double digits to single digits. In the whole year of last year, the retail sales of clothing products of domestic wholesale and retail enterprises above the designated size were 672.38 billion yuan, with a year-on-year growth of only 17.7%, which was even lower than the growth rate of 20.8% during the financial crisis in 2009.

This year's situation is even worse. According to the statistics of the National Business Information Center of China, in the first half of this year, the retail sales of clothing products of 100 key large-scale retail enterprises in China increased by 6.9% year on year, down 2.9 percentage points from 9.8% in the same period last year.

For Chinese enterprises, which are used to growing by dozens of percent every year, such industry development speed needs time to adapt and adjust. At the same time, this also means that local clothing brands and manufacturers will face increasingly fierce positive competition and industry reshuffle. This is called internal worry.

meanwhile, international brand But it is a menace. As mentioned above, popular leisure and fashion clothing has always been a weak area for domestic clothing brands, but international brands are very strong in this area. They have strong brand appeal, mature quick response supply chain and rich experience in terminal retail. These brands have accumulated experience in expanding the Chinese market through their exploration in the Chinese market a few years ago, and have begun to expand in recent years.

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As of the first half of this year, the number of H&M stores in China has reached 150, and now we can even see H&M stores in some fourth tier cities. In the first half of 2013, H&M achieved sales of 2.88 billion yuan in China.

Uniqlo is expanding faster. Uniqlo plans to open 80 new stores in China this year, bringing the total number of stores to 225.

　　Zara、 H&M、 Uniqlo, the major international SPA clothing brands, has sold more than 5 billion yuan in the Chinese market every year. In just a few years, Uniqlo has become one of the top brands in the Chinese market. These brands have also driven other international fashion brands to explore the Chinese market. When they work together, local brands will inevitably be impacted, which will have a great impact on popular women's wear and leisure clothing brands. This is called foreign invasion.

Another important factor affecting local clothing brands is the development strategy of the enterprise itself. In the early days, it was over expanded, but now it is a lot of local people who suffer from channel backfire Clothing brand Common difficulties.

The most typical industry of excessive expansion is sports goods. By the end of 2011, the number of terminal stores of several local first-line sports brands had reached about 8000, and they were ubiquitous in all Chinese cities. However, under the attack of internal and external troubles, the operation of sports brands deteriorated rapidly: sales in the terminal market were blocked, agents were in urgent need of profits, and channel inventory was overstocked... In the next time, sports brands had to accept painful adjustments: selling inventory, closing stores, reorganizing channel channels

Change in labor

Taken together, these factors have formed the deductive logic of China's clothing industry in recent years.

Sporting goods are most suitable for large-scale and brand operation. The industry is the earliest and most mature. However, the excessive expansion of the industry around 2008 has planted a curse for the future. After more than two years of adjustment, sports brands are still digesting the consequences.

In the first half of 2013, Li Ning achieved a revenue of 2.905 billion yuan, down 24.6% year on year. At the same time, Li Ning also recorded an operating loss of nearly 40 million yuan. Li Ning's stores have also been reduced to 6024, with a total of more than 2000 stores closed.

But the sporting goods industry also began to show positive signs. Anta's revenue is also decreasing, and the store network is also adjusting, but the brand's profitability has remained good. In the second quarter of this year, Anta's same store sales growth rate stopped declining. Anta's sales at the 2014 Spring Order Fair achieved a single digit growth, the first increase since the 2012 Autumn Order Fair, which also indicates that Anta is expected to return to the era of expansion.

　　 business men There have been few domestic and foreign troubles, and the development strategy of business men's wear brand is relatively stable. Therefore, in 2012, when domestic clothing brands were filled with sorrow, business men's clothing brands could still achieve brilliant performance growth.

However, in the first half of this year, the performance of business men's wear brands was inevitably dragged down. The revenue of Jiumuwang and Lilang, which have disclosed their performance, declined to varying degrees in the first half of the year. Seven Wolves predicted that the lowest growth rate of net profit in the first half of the year might drop to zero. It is called that there is an egg under the nest.

Local leisure clothing brands have suffered the most comprehensive impact. At the moment when they were just preparing to show their strength, they were affected by the massive expansion of international brands, the decline of the macro-economy and the uncontrolled development of their own. In a hurry, we had to carry out comprehensive reforms in products, channels and supply chains. In terms of products, local leisure clothing brands began to try to move closer to personalization and fashion. In terms of channels, Meibang has made a lot of exploration in the direct marketing of large stores. In terms of supply chain, flexible and quick response supply chain has always been the pursuit of all clothing brands.

In 2012, although the revenue of the two major local leisure clothing brands, Mibon and Sema, declined slightly, their net profits declined by more than 30%. In the first half of this year, the performance of Sima rebounded, its casual clothing slightly increased by 2.55% year on year, and its net profit also achieved year-on-year growth. However, in the first quarter, the revenue and profit of Meibang declined by 15.7% and 44.8% respectively. In the most optimistic case, the net profit in the first half of the year may decrease by 30% year on year.

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　　 The baptism of new e-commerce formats

This year Clothing brand It's a year of baptism. Brands have to pay for their strategic mistakes and learn to accept the natural fluctuations of the economy and the survival of the fittest in market competition.

Another factor that we have been following is e-commerce. From now on, traditional clothing brands will begin to be baptized by e-commerce. According to the overall data of last year, the penetration rate of e-commerce in the clothing industry is close to 20%, which indicates that e-commerce has become a new type of business in the clothing industry that can compete with department stores, specialty stores and other types of business.

E-commerce has a large space to imagine, but it is first of all a channel for the circulation of goods and information. From this perspective, its impact on brands should be very limited, because brands should exist beyond channels, and emerging channels are also opportunities for traditional brands. The annual turnover of some traditional clothing brands on Taobao has exceeded 1 billion yuan, indicating that these brands have a very wide range of influence both offline and online.

But at the same time, we also see that many online businesses of traditional brands that attach great importance to e-commerce fall into bottleneck, and even there are many cases of decline. This phenomenon deserves the reflection and vigilance of clothing brands.

In the early era of commodity shortage, who can produce cheap and high-quality products, who can occupy the market, we call it brand. After entering the era of commodity surplus, whoever can handle agents will be able to occupy the market, which is also called brand. This is China before Clothing industry The "brand logic" of. But when the competition for channels becomes intense, especially after the emergence of e-commerce, a borderless channel, how can we build a clothing brand?