The Rise And Fall Of Daphne In Sixteen Years: The Pformation Of Traditional Retail Industry

The franchised store was once

The key to profitability is the Internet age. This is a "cumbersome" feature. It is the first step for Daphne to get out of the shadow of loss.

"Beautiful 100 points, beautiful without discount."

This is Daphne.

A widely circulated advertisement.

Now, this Taiwanese shoe company, which has entered the mainland market since the 90s of last century, is facing unprecedented cold sales.

After implementing a series of measures such as closing stores, layoffs, reducing prices and opening up celebrity endorsements, this once glorious "Volkswagen shoe king" still can not get out of the haze of sales decline.

Last month, Daphne International Holdings Ltd issued a warning for investors in the first half of 2016. As of June 30, 2016, a total of 450 sales outlets were cut by the first half of June 30, 2016, including 400 Direct stores and 50 franchisees.

In fact, it is not just the bottleneck of Daphne's operation, but also with the domestic market.

The growth of enterprises is weak, and the sales volume of the major footwear enterprises has declined to varying degrees.

Faced with the downturn, many brands have begun to seek other directions in order to pull down the decline.

Under the impact of the Internet, where should the traditional physical retail go?

Close shop stop loss

In the early 80s of last century, Zhang Wenyi, one of the founders of Daphne, took 5 workers and rented a factory with his friends and started selling shoes for women in Taiwan.

In 1987, Zhang Wenyi and Chen Xianmin founded the wing en International Group in Hongkong (Daphne international predecessor). The following year, because of the unbearable rising land and labor costs, Zhang Wenyi pferred the factory to Putian, Fujian, and the center of production shifted to the mainland, thus creating a brand of Daphne for women's shoes.

"No intention of inserting willows and willows to shade", Daphne, which initially attacked the mainland market in order to digest inventory, quickly captured the hearts of consumers due to its moderate price and fashionable design, and became the first brand of mainland women's shoes for 5 years in a row. The market share is closer to 20%.

At the peak of sales, almost every five pairs of shoes sold in the mainland came from the factories of wing en group.

Subsequently, Daphne Group continued to develop diversified businesses, and successively acquired Adidas China's retail agency and self created brand "shoe cabinet". So far, it has AEE, dulala, AMEI, ALDO and other footwear, clothing brands and access channels.

In 2006, the first generation of shoes OEM generation factory, more successful in the mainland business experience copied to Taiwan, set up 30 stores in Taiwan, and hired pop star S.H.E, singer Rene Liu as spokesperson.

Unlike competitors BELLE and Saturday, shoe industry likes to get together in high-end shopping centers. Daphne's location takes the strategy of boutiques on the street.

With the success of this chain operation mode, the pace of expansion of Daphne stores is also increasing rapidly. The total number of stores has increased from 739 stores in 2003 to 6702 in 2013, and increased by 9 times in ten years. In 2012, the number of stores reached a peak, and there were 6881 stores of various brands.

In the four years from 2009 to 2012, it was growing at a speed of nearly 1000 a year.

It is also in this year that Daphne's sales revenue reached HK $10 billion 529 million, and its controlling shareholders accounted for HK $956 million.

But it didn't last long. After a great triumph, the pressure brought by the huge number of stores in Daphne also emerged.

The first is the annual increase in rents and sales costs. Since 2012, sales cost almost accounted for half of sales revenue; second, stock prices have risen; sales in 2013 amounted to HK $10 billion 447 million, inventories reached HK $2 billion 643 million, plus 218 days of turnover, and funds were holding up alarming rates. Labor costs in recent years have continued to rise. According to the public earnings reports in the past years, wages and benefits in 2013 were 21 thousand, wages and benefits 670 million Hong Kong dollars, employees in 2015 reduced to 18 thousand, wages and benefits reached 1 billion 330 million Hong Kong dollars, and labor costs nearly doubled.

In 2015, the former "shoe king" suffered the first loss in nearly ten years after its "stagflation" for two consecutive years. Net profit fell by over 300% over the past two years, and the loss of the company's owner was HK $379 million.

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To cope with the decline in sales, Daphne said it would speed up the closing of stores. Since 2015, a total of 1277 shops have been closed for a year and a half.

The industry believes that enterprises in order to short-term stop loss, usually choose to price promotions or closing stores.

Because Daphne has too many stocks, once the goods are not sold, the scale of the fund will be very large.

Ding Yun, head of consulting company and retail research center, believes that the domestic retailing industry is in the era of manufacturer dominated products in the early days of development. Retailers are mainly focusing on the strategy of deep ploughing channels, and more focus on channel resources.

With the continuous development of Internet technology, the upgrading of sales channels has made consumers more aware of the right to speak.

"Now is the consumer era, the demand of consumers is upgrading, and the professional demand for goods is higher."

Ding Yun believes that in the process of rapid expansion of Daphne's brand, its store's shopping guide and service capabilities can not keep up, resulting in a lack of sense of experience for offline stores.

In addition, the low efficiency of the supply chain is also one of its bruising. "For fast fashion brands, the industry's mutual imitation is very strong, so the key to winning is the speed of renewal."

An old customer from Daphne told reporters that in recent years Daphne's style has become more and more "Earth", and the comfort level of shoes is far less than before.

Is the electricity supplier the only way out?

In fact, due to the weakness of the overall consumption environment and the impact of e-commerce, many shoe companies in China have been caught in the bottleneck of development, and many brands have entered the throes of strategic adjustment.

According to media reports, the second half of 2015, due to the deterioration of the financial situation, the decline in performance to double digits, China's largest women's shoes brand BELLE closed stores in Hongkong, a total withdrawal from the Hongkong market.

Another "domestic women's shoes first share" also had bad weather on Saturday.

As of the first half of 2015, the total number of stores on Saturday decreased by 107 from the end of 2014, resulting in a net profit drop of over 30% in 2015.

In recent years, it has become more and more difficult to see Daphne's business in the northern Guangzhou Shenzhen Shenzhen business circle. More stores have been relegated to the two level business district, community shopping center, or set up counters in supermarkets.

The development of electronic commerce has changed the way people shop, and they can buy the goods they need without going out.

Take Tmall as an example, you just need to input "high heels" to produce millions of merchandise immediately, and the price ranges from 100 yuan to 1000 yuan.

According to the data released by the National Bureau of statistics, the total retail sales of consumer goods in China reached 30 trillion and 100 billion yuan in 2015. The proportion of online shopping in the total retail sales of consumer goods was 12.6%, an increase of 2% over 2014.

Ding Yun pointed out that the advantages of e-commerce in the Internet era are very prominent.

Take a clothing business enterprise as an example, its core customers are young women who like the Japanese and Japanese style.

"It's positioning is very precise, through the buyer centered group system to choose money, the product's update frequency is higher, marketing promotion ability is strong, the overall operation mode is" big platform, small front end ".

In fact, as early as 10 years ago, Daphne began operating on the water line.

In 2006, Daphne officially entered the e-commerce market. Three years later, its Agel Ecommerce Ltd was formally established and began to operate independently.

In 2014, in Alibaba's "double eleven" event, Daphne also won the championship of women's shoes.

But the group report shows that the proportion of the overall business of the electricity supplier sector is not high, and the growth of performance does not offset the decline in overall business data.

Like Daphne's pformation of traditional enterprises, Ding Yun believes that the development of e-commerce can effectively optimize the supply chain resources under the line.

By analyzing the online consumers' big data, such as what types of shoes customers like in different regions, they can adjust the ratio of warehouse sources.

But he also said that the pformation to the electricity supplier is not the only life-saving medicine for the traditional retailers, and the Internet start-ups also have a large number of failure cases.

The value of a physical store is reflected in the consulting service, customer experience and warehousing capacity.

Why did foreign retailers not get too much impact from the electricity supplier? The reason is that the sense of sense of experience of foreign entities is well done.

In fact, the "subversion" of the domestic electricity supplier to the retail industry is actually doing something that is not well done under the line, such as pforming the inefficient supply chain and reducing the high commodity prices.