How Long Can "Famous Brand Products" Last?

Some people resigned from their posts, and some people rushed to the Imperial Academy on night.

In Japan, where the flagship "high quality" and "high quality" brand of life department stores are lost in the Chinese market, some low-end lifestyle department stores, which originated in China, are similar to MUJI products.

In June 2019, according to the results of the official website of the good quality program, the sales of Muji in the Chinese market decreased by 3.9% in the first quarter of 2019 compared with a year-on-year decline of 9% in March 2018 to November.

As a matter of fact, Muji has been experiencing growth predicament in the Chinese market as early as 2017, and its revenue grew from over 20% to negative.

Before and after the latest earnings report of MUJI products, in June 10th, the museum with "the Imperial Palace make-up", "the Imperial Palace pajamas", "the Imperial Palace hotpot" and "coffee" were ushered in a new partner, named "creating excellent products". The two sides announced the joint development of up to 159 products in 7 major categories, such as life department stores, stationery and accessories.

According to the official introduction, the famous brand was created by Japanese designer Miyake Junya and Chinese young entrepreneur Ye Guofu in Tokyo. But in China, it was called the "ten yuan shop" brand by many users.

Compared with the MUJI products that only entered more than 200 stores in 2005, the famous products that were founded in 2013 are descendants, but they are developing more vigorously. According to the data disclosed by Ye Guofu, global co-founder and chief executive officer of the famous and creative products, in 2018, there were more than 3500 stores in 79 countries and regions in the world, with a revenue of 17 billion yuan and 30000 employees.

The vigorous development of famous products is not isolated. Behind it, a large number of business models, product categories, store layout, and even Logo are all very similar "XX superior", "XX" life and "XX" fashion are everywhere.

The value of "ten yuan shop"

One day in January 2016, hall 2 of the Guangzhou gymnasium, with a floor area of nearly twenty thousand square meters, ushered in a grand annual meeting of the company. A company called the "SimMan holding group" put more than 300 round tables here, and the company attended more than 3000 employees.

As the founder of the Zeeman holding group, Ye Guofu is proud of such a battle. He believes that enterprises that can hold the annual meeting of the Guangzhou gymnasium gymnasium should not only have the strength, but also be willing to spend money. Such enterprises are not only very few in Guangzhou even in the whole country.

In an article, the entrepreneur described the situation at that time: at the annual meeting, Ye Guofu, wearing a suit, white shirt and headset, shouted to the employees on a picture on the big screen. "Can you find someone you know on the big screen? Standing behind me is Ma Yun, Shi Yuzhu and Feng Lun.

As a brand of the SimMan holding group, the famous brand product that has been established for only three years has become a big black horse in the retail market. It has opened more than 1100 stores in the world, and realized sales of 5 billion yuan in 2015, when it was expected to achieve 10 billion yuan in 2016.

Over the next few years, the number of stores, revenues and staff in the annual number of famous and excellent products has been expanding, and the scale of annual meetings has also been increasing. By the time of January 2019, the venue of the annual meeting of the company has been changed from the Guangzhou gymnasium to the poly World Trade museum with a larger stadium.

The surge of famous brand products is a microcosm of the rapid development of "ten yuan store" life department store brand in China. Unlike the famous high quality products, the growth rate of some famous shops of "ten yuan shop" is amazing, but they choose to make a fortune.

Take a brand named "Sanford fashion" (SanFu) as an example. The fast fashion brand, headquartered in Fuzhou, Fujian, has reached about 900 stores nationwide in 2018. Apart from Tibet, all cities in China have already opened stores and "revenue is over 10 billion," Li Xuan, a retail industry, revealed to all weather technology.

However, for the elite of the first tier cities, few people have heard of the name "Sanford".

"The first tier city is not the main brand of the" ten yuan shop "brand of Sanford fashion, explains Bai Shuo, an employee currently working in Sanford fashion. He said that at present, the layout of Sanford in Beijing and Shanghai is relatively small. At present, there are only two shops in Beijing, and they are all outside the South Fourth Ring Road.

Another reason is that brands, including famous brands and other brands, are rarely promoted. "The visitors are more likely to be handed down by mouth and on high density stores and rarely advertise."

Compared to entering the first tier cities, the "ten yuan shop" brands are more willing to plough the two or three line cities. Bai Shuo said that at present, the focus of Sanford fashion in the north is Hebei, northeast and Shaanxi Gansu Ningxia area, mainly for the layout of city level cities, for example, in Hebei, Sanford fashion will open more than a dozen stores in 2019.

Bai Shuo graduated from university in 2014. When he joined Sanford fashion, there were about 400-500 companies in the country, and now there are 800-900 stores. "Sanford fashion is basically a direct store. The expansion is fast because basically every shop can make money."

Behind the active layout of the "ten yuan store" of major jewelry and life department stores is the constant outbreak of the demand for the two or three line market.

Take Sanford fashion in a shop in Handan, Hebei as an example. The street shop in Handan Road, Cong Tai District, has an area of about 600 square meters, with sales revenue of 20 million yuan a year and gross margin of 50%.

Li Xuan also believes that many of the "ten yuan stores" that are not surprising are actually very profitable. "Overall, the profits and revenues of these ten yuan stores are generally higher than those of clothing brands such as Lining and Semir." But for these data, they are very low-key, rarely published, and even the announcement is less intentional, "because of tax related issues".

Outsiders sometimes do not see "ten yuan shop" and underestimate the market potential of "ten yuan shop". Ye Guofu also once disclosed that when a famous shop opened a shop in Shiyan, Hubei, the local government leaders could not understand it. "You have 10 dollars in everything, and all the profits are 10 yuan. What do you earn?"

Ye Guofu said that in the first tier cities, the number of shoppers who make good quality products can reach 2000 people a day. According to the price of 30 yuan, the daily turnover is 60 thousand yuan, which is 1 million 800 thousand in one month. "Many famous fashion brands can only make 200 thousand achievements in the first shopping mall in a month."

In recent years, after the market value has been excavated, some "ten yuan shop" brand has also begun to be favored by capital. In September 2018, the name Chuang Gao announced the signing of a strategic investment agreement with Tencent and high alpine capital for a total of 1 billion yuan. This is also the first time since the establishment of an external capital in 2013 for the first time in five years. Almost at the same time, Jingdong's Jingdong has also announced a strategic cooperation with famous brands, and the number of stores that the two will cooperate will reach 800.

After the completion of the financing, in January 2019, the name of excellent products called out the medium-term goal of "100 million stores in 100 countries", that is to say, by 2022, 100 countries and regions have been stationed in the world, and the number of stores in the world has reached 10000, and its revenue is more than 100 billion yuan.

Aiming at the "ten yuan store" circuit is not only Tencent, high leverage capital and Jingdong. In March 2019, NOME, a new retail brand in the field of home furnishing, announced that it had completed the 600 million yuan B round of financing at the end of 2018. This round of investment was co sponsored by Sequoia Capital and Huaxing capital.

Chen Hao, founder of NOME, is known as "the youngest entrepreneur ever invested by Queen Xu Xin". He said that after financing, 400 million yuan will be invested in the new business, and its new business will include the "super ten yuan shop". "We will do ten yuan in the whole field, and the whole price of the product will not exceed 19.9 yuan."

And only a year ago, when he was fighting with the name "NOME" trademark, Chen Hao also said that the new productivity was bound to bury the old and rotten old productivity. "Guangzhou Fu" and its "ten yuan shop" business model will be abandoned by the new retail revolution.

Li Xuan believes that the appreciation of capital for the "ten yuan shop" is not only a reflection of its huge profit margins and new retail gameplay, but also the value of its powerful traffic entry.

The official data of famous and excellent products show that the annual traffic volume of all the stores is nearly 1 billion, and the consumption time is 300 million. Bai Shuo also disclosed that in one of his stores, the daily traffic volume was more than a thousand people. If he caught up with weekends or holidays, he would be more popular.

Because the consumers of "ten yuan shop" are mostly female users aged 18 to 35, including senior high school students, college students and white-collar users, they are just the best group competing for the whole retail market.

In addition to Tencent, Jingdong and other Internet Co fancy "ten yuan shop" traffic entrance, the traditional business circle has also favored the "ten yuan shop" brand, hoping to enhance popularity. At the beginning of 2019, the number of famous and excellent products announced that the number of stores stationed in Wanda Plaza exceeded 100, and became a member of Wanda's "100 clubs".

Bai Shuo disclosed that Sanford fashion has signed a cooperation agreement with a national shopping center. "In the future, shopping centres will be invited everywhere."

Secret of red explosion

It seems that whenever it comes to the "ten yuan shop" of various brands, it is filled with customers who are choosing goods.

"Have you ever thought that today's business is highly developed, such as Taobao, and so on. Why is the ten yuan store so hot?" Asked Bai Shuo.

In his view, behind the explosion of "ten yuan store" is the awakening of the consumer consciousness of young people + the promotion of social media to fashion and the result of "collusion" of "ten yuan store" brand operation.

In his daily work, Bai Shuo found that there had been a common phenomenon in several Sanford stores he had visited: the proportion of student groups among users was increasing, from junior high school students to college students of all ages, and the age group was constantly exploring. "These students have a lot of pocket money in their hands, and their desire and awareness of consumption are also growing."

The popularity of social media, such as jitter and other short video social media, has a great influence on the promotion of fashion and the awareness of consumption of young people. "At least it has played a role in adding fuel to the flames, and sometimes even determines their consumption preferences." Bai Shuo thinks.

But how to attract these users to spend? Finally, we should return to the specific operation.

As a senior member of the industry, Bai Shuo is well versed in the way of operation. "The operation of" ten yuan store "is a complex and delicate job. Location is the key to the key.

In the impression of many people, the "ten yuan store" is either near the railway station with large traffic volume or around the low end community and school with low consumption capacity, but the real situation may be one hundred and eight thousand miles worse.

In the site selection, the famous products also stepped on the pits. The first store in China is located in the Jianshe Road pedestrian street of Huadu District near Guangzhou train station north of Guangzhou. At that time, Ye Guofu believed that this lot was very much in line with the location of famous products and excellent products. Not only did it have a huge flow of people, but most of the crowd belonged to people who were particularly sensitive to the price.

But the fact completely overturned his idea. The sales volume of the store was even less than 1/3 of expected. With this lesson, the name of the product started to locate the store near the business center.

Today, on the map, the famous East Nanjing Road Commercial Pedestrian Street in Shanghai is the center of search. In the distance of about a kilometer, we can find five stores that create excellent products. From East Nanjing Road Commercial Pedestrian Street, Beijing Xidan and Suzhou Guanqian Street to various shopping centers in the first and second tier cities, all kinds of "ten yuan stores", represented by famous brands, have quietly captured the most expensive golden section.

Before, many "ten yuan shop" favored the University periphery, and now it has lost its attraction. Although college students are one of the main consumers of "ten yuan shop", the winter and summer vacation is a fatal blow to the ten yuan store, which means that there will be no business in four months of the year.

"The ten yuan shop now has a tendency to go to business circles and shopping centers," Bai said. The trend now is that people tend to shop at one stop and eat and drink in a place. Only at this time is the "ten yuan shop" worth visiting.

"Famous brands, Sanford fashion and other brands have rarely opened street shops, even shopping mall streets, but began to enter shopping centres such as Wanda Plaza." Li Xuan believes that the "ten yuan shop" has begun to take the fashion line in the shop decoration, imitating UNIQLO, Muji and other brands in signboards and furnishings.

After site selection and decoration, price, SKU (stock unit) and renewal frequency are also important factors to decide whether "ten yuan store" can rise.

10 yuan perfume spray, 5 yuan nail polish, 1 yuan nail clippers, small hairpins and other cheap goods are important factors for ten yuan store to attract users. "In general, the price of" ten yuan shop "is usually only 1/3 to 1/5 of the supermarket, which is the 1/10 of the shopping mall. Bai Shuo believes that only three times the price gap can cause psychological impact on users.

Besides the low price, the huge SKU and fast update frequency are also the weapons that stick to users.

According to the publicly available data, the SKU of each store is around 3000. But Bai Shuo believes that the number of Sanford fashion in the number of SKU is much more than that of famous brand products. "Apart from big ornaments and lifestyle products, we also add clothing, shoes, cosmetics and other products, SKU even close to tens of thousands of species."

The speed of product renewal will also affect the change of SKU. "Basic online red products will appear in our store in 10 days".

But if the speed is fast enough to catch up with the outbreak of red products, the profits it brings will be considerable.

"The net red product's explosive power is very strong, brings the revenue to be also much more fearful than ours anticipate", once he discovered, since one shop demon nail polish in its shop has been vibrant sound popular, in three days the single color product has sold tens of thousands of branches.

New challenge

The "ten yuan shop" industry with flourishing vision is not just flowers, there is no anxiety.

"At the beginning of the year, leaders said that this year is expected to be the worst year since opening."

However, he mentioned that the pressure is not only Sanford fashion, but almost all the "ten yuan shop" brand is not very good now. "In fact, from the second half of last year to the present, the whole industry is not very prosperous, and the sales of stores are going down or even."

The change of the environment is one of the reasons for the pressure on the industry. Although the flagship price is low, the pressure of the overall market environment has made the "ten yuan shop" feel the chill.

The "ten yuan store" product is cheap, although users can not afford it, but sales data will not lie - the frequency of user purchases has been reduced. Because the "ten yuan shop" sells mainly the collocation ornaments, these are not just needed products, if the user feels the financial pressure, will reduce the purchase.

The rapid change of user aesthetic also makes the "ten yuan shop" feel anxious: on the one hand, the popularity of social media such as jitter and short video has increased a channel of carrying goods for the "ten yuan store", but this is a challenge to the speed of its supply chain.

For the brand of "ten yuan shop" with hundreds of thousands of chain stores, such as famous brand, Sanford fashion and so on, the fast change of net red products is not friendly to them. They hope that a single product will become popular in the long run. Compared with the small shop, "small boat is good to make a U-turn", big stores need to make decisions first. However, ordering goods and distributing them to shops will lead to more time, which will often delay the opportunity to make money.

Bai Shuo believes that the domestic "ten yuan shop" brand has obvious deficiencies in the supply chain, not only with the foreign ZARA, UNIQLO and other fast food products, the reaction speed is different, sometimes the reaction speed is not as good as grid shop.

But he also admitted that sometimes even if the process is fast enough, it will not help, because it is impossible to find an order. "For example, we will set hundreds of thousands of goods at a time. If the factory fails to produce, the other party will not take orders at all."

Chasing net red products has also resulted in homogenization of products among different brands. From the source of goods, almost all "ten yuan shop" has similar sources, for example, clothing is usually produced in Guangdong, and accessories are mostly from Yiwu, Zhejiang.

On the other hand, due to the lack of new media operation capability, the "ten yuan store" brand is sometimes relatively passive in controlling the fashion trend. "Many brands have actually set up new media departments to try to operate the jitter and micro-blog, but finally found that the effect is not good," Li Xuanbiao showed.

Facing the challenge of big and small, the "ten yuan shop" are also looking for a new way out.

While focusing on the business center, channel sinking is also a new option. Bai Shuo said that Sanford fashion has already chosen to launch some new stores to the county level this year after completing the municipal commercial center.

And the brand like the famous brand is extended to overseas. Public information shows that in 2015, the international strategy was launched in 2018, and it opened more than more than 1800 stores in more than 70 countries. According to Ye Guofu's plan, by 2022, there will be 7000 overseas stores in 10 thousand stores of famous products.

In the overseas expansion, Mexico, India and other populous developing countries have become the focus of the expansion of famous products. Among them, there were nearly 100 stores in Mexico in 2018, and 180 stores are expected to open in 2019. In the India market, the first line of luxury products opened in India in 2017. By the end of 2018, it had opened nearly 70 stores in India. Liu Yang, chief business development officer of famous and excellent products, has revealed that the company has made plans to reach 800 stores in India by 2020 and will aim at three or four line cities in India.

In addition, many customers who stroll around the "ten yuan shop" have found that in recent years, the "ten yuan shop", which has been playing the major ornaments, has begun to make some new changes in products. For example, they put on prices of clothing, bags and other products priced at more than 100 yuan, or in cosmetics, which are different from those of low priced cosmetics in the past. Now they are starting to follow the route similar to Watsons, selling some famous brand make-up products. The price of some products has reached six or seven hundred yuan.

Li Xuan believes that this change is the "ten yuan shop" brand change signal. In his opinion, the ideals of these brands are very plentiful -- their inherent logic is actually "high frequency and low frequency" -- the use of daily consumption goods with high repetition rate and low unit price to drive the sale of durable goods with low repetition rate and high unit price. However, the actual effect remains to be seen. For example, when selling cosmetics, "ten yuan stores" need to compete with traditional counters, but the challenge is how to make users trust the high-end products of "ten yuan stores".

Next, what will the "ten yuan store" parallel to the hurricane go with anxiety? No one can say 100% correctly now.