The Era Of Brand: It'S Time For The Clothing Industry To Work On The Internal Cultural Internal Strength

At the end of November, the news that La chapel, the leading brand of women's wear in China, announced bankruptcy once caused a sensation in the market.

From 2018 to 2020, the brand lost about 4.2 billion yuan. In addition to the inventory cycle and industrial decline, the failure of online transformation has brought about a vicious cycle of price war, which has become the last straw to crush the once dominant woman in the women's wear market.

Coincidentally, recently, the famous fashion brand Boy London announced on several e-commerce platforms that it would gradually close its online stores, and launched a promotional activity of "selling within limited time, not leaving one piece". Many consumers also speculate that there are problems with this trendy brand business.

With the above two clothing brands in the same situation is not a few. Since 2015, the clothing market demand tends to be saturated, brands generally face the pressure of transformation and upgrading, and the growth rate of industrial scale has been declining, and the overall growth rate has dropped to about 7%.

By 2020, the outbreak will add more uncertainty to the overall economic environment, and the growth rate of clothing market sales will further drop to 3.2%.

According to the data of the National Bureau of statistics, in 2020, China's garment production of garment enterprises above Designated Size will be 22.37 billion, a year-on-year decrease of 7.7%; The operating revenue was 1369.73 billion yuan, down 11.3% year on year; The total profit was 64.04 billion yuan, down 21.3% year on year.

Data source: Guotai Junan Securities Research Paper

From the data, the clothing industry is facing unprecedented growth and even survival crisis. Under the new situation, consumer demand is becoming more and more diversified, and the old logic of low-cost volume of popular models is gradually invalid, which has impacted many brands. The fierce new brands make the competition in the clothing industry increasingly fierce, which accelerates the elimination speed of the industry.

How to survive in this round of shuffling and find new development opportunities in the challenge has become a common topic for all clothing brands.

Clothing industry under storm

If we pay close attention to the sales list of every double 11, we will find that some old national brands well known by consumers are now hard to trace.

As of June 30, 2021, the total number of stores in metsbouray was only 1781, a decrease of 65.9% compared with the peak period in 2012. Senma, another major clothing brand, has a hard time offline. In 2020, the total number of its stores has dropped sharply by 1532, and its overall revenue is also on the decline.

Odd and even tabulation

Although each brand has its own problems, the diversification of consumer demand is undoubtedly one of the most important reasons.

In the new era of consumption, brand power, color, IP co branding and functionality have all been taken into consideration by this consumer, which further changes the consumption trend of single demand in the past. In the past, several low-cost pop models have gradually failed.

This further triggered a chain reaction. Due to the shrinking demand, a large number of unsalable products can not be quickly turned around due to the pressure of huge inventory squeeze for many brands. The inventory turnover days of some top brands of men's and women's wear are more than 250 days, which seriously limits the profitability of brands.

Some brands will want to place their hopes on studio sales. According to an industry source, some clothing brands are keen to make special contributions to some flow platforms for shoddy live broadcasting rooms, in order to further break the price and brush Gmv.

As a result, in the early years, consumers frequently used sales tactics such as loss sale, whole venue XX Yuan, discount and clear inventory were moved to the online studio by brands. The low-cost volume has become the Savior in the eyes of some brands.

For example, La chapel, walking on the edge of the cliff, once relied on the wild consumption of consumers in its live broadcasting room, which made people see the possibility of resurgence.

According to media reports, on November 24, the number of live viewers of Taobao flagship store in lashabel was 210000, more than twice the popularity of ordinary people.

However, the price of high popularity is the breakout price without bottom line and the irreparable brand image - clothing products which normally cost hundreds of yuan are now sold at a discount in the studio, and the price is as low as double digits. At the same time, this once leading brand of women's wear has lost its last dignity.

If we say that lashabel, which is heavily in debt and in bankruptcy crisis, has no choice but to plan too much for the future. More brands with good business conditions are only satisfied with the current sales volume and Gmv figures. Obviously, it ignores the negative effect of low-cost and high-volume sales.

In the view of many people in the industry, because low-cost marketing has further lowered the brand positioning, the seemingly prosperous scene is only drinking poison to quench thirst, which can not help enterprises really get out of the predicament; In this case, we all work for the traffic platform, which increases the popularity of the platform.

For today's turbulent brewing drastic changes in the clothing industry, this is obviously not the way to maintain the long-term core competitiveness of the brand.

In fact, the current plight of the clothing industry is far from clear from the downstream sales side. The real crisis comes from the fundamental contradiction between the supply and demand in the upstream sector of the industry.

Especially since the second quarter of this year, with the gradual depletion of the overall flow dividend of the Internet, the role of the volume of e-commerce buying volume is also declining. The industry problems that were covered by the amount of brush are gradually revealed, which further makes some brands addicted to the brush volume forced to face the cruel industry reality.

How to connect the upstream and downstream of the industry and how to grasp the new trend of the industry and consumers are the issues that need to be considered if the clothing brand wants to survive.

There was light in the mist

In his book "the whole history of business model", the writer Mitu Hongzhi reveals to the world the fundamental contradiction and persistent high risk faced by the clothing industry: the lengthy value chain and the information asymmetry in each production link make most of the clothing brands face the pain of catching up with the fashion trend forever.

The contradiction between supply and demand can not be solved effectively until now.

This is also the opportunity contained in the current industry challenge: who can grasp the trend and meet the diversified needs of consumers can open up a new blood path.

Some changes are already happening quietly. According to the data, HM's revenue in China plummeted by 40% from June to August this year, Nike's growth rate in Greater China from June to August this year ranked the bottom of all regions, and adidas' revenue in Greater China decreased by 15.9% year-on-year.

In contrast, domestic brands such as Li Ning Anta have seen sales growth of more than 50% in tmall's flagship stores.

Data source: Guotai Junan research paper

In the field of sportswear, which has been dominated by foreign brands for years, tmall's emergence of domestic products in the main battlefield of brand war is a landmark signal in the field of clothing.

With the development of Chinese brands, the trend of fashion has been set off successfully. Domestic sportswear brands have met more demands of Chinese consumers through the layout of brand differentiation and co branding, thus greatly improving the acceptance of domestic brands.

In addition to sportswear, more long tail demand can be met, and even become a separate track, which makes a large number of brands see the opportunity of overtaking in the blue ocean market.

The popularization of the "three pits industry" (JK uniform, Hanfu, Lolita) is a representative event.

According to relevant reports, in 2020, the "three pits" composed of JK uniform, Hanfu and Lolita occupy the top three hot topics of generation Z. more than 60% of the post-00s "are willing to invest more time and money in their fields of interest".

In 2020, "three pits" * * will become the 10 billion category of Taobao platform. In the first half of that year, more than 20 million people bought Hanfu from tmall. During the "double 11" period, the sales growth of JK, Hanfu and Lolita was also higher than that of some mainstream clothing categories.

This also gave birth to many brands out of the encirclement. Brands such as teenie weenie, returning to the Han and Tang Dynasties, and more than thirteen capitals are all new brands in this round.

Almost at the same time of the rise of the three pits, the emergence of many brand stores catering to the diversified aesthetic appearance on the Taoxi platform has become a new force in the field of clothing.

Bosie, which was founded in 2018, is a fast fashion brand that started with sexless clothing. Since the birth of the brand, the average annual sales volume has exceeded 300 million yuan. During the period of double 11 in 2021, bosie achieved a sales volume of more than 100 million yuan in less than two hours, surpassing the half year sales in 2020 at one stroke, showing the potential of this track.

More possibilities and more new tracks. In fact, the trend of national tide, three pits and neutrality is just the representative of the clothing industry running in a new direction.

In the turbulent recovery situation of the industry, the major clothing brands have found a clear way in the fog: give up the flow fantasy. Return to the essence of operation, use the advantages of the platform to compete with each other, and grasp the new direction and new trend.

Break the game

However, from the perspective of industry, it is not easy to find trends and put them into practice.

In fact, looking at the ups and downs of the clothing industry in recent years, the coexistence of high inventory and high shortage caused by the deviation of enterprise planning is a hindrance to the further development of the clothing industry.

The lengthy value chain of clothing industry has become the main culprit of the imbalance between the supply side (manufacturer) and the demand side (consumer). The information asymmetry in the supply chain leads to the upstream manufacturers' design, development and production of products, which often miss or do not meet the final needs of consumers.

Traditional clothing supply chain image source: Frontier economist app

However, with the increasingly close relationship between the Internet and the real economy, it has become a feasible new direction to combine the industrial Internet with the consumer Internet to predict the "style", which seems difficult to quantify consumer demand.

Taking the previous attempts of teenie weenie as an example, the brand carries out style digital cooperation with tmall, based on tmall's style recognition and prediction of full platform women's wear, to control the trend, and then to promote product development and iteration. During the period of this year's tmall 618, the brand's sales doubled year-on-year in 2020, with the first hour exceeding the whole day sales of last year.

For more small and medium-sized brands, it is difficult to grasp the trend, and it is difficult to implement the trend.

More and more clothing manufacturers are aware of the importance of "fast reaction" because of the outdated logic of popular fashion and the continuous change of new trends. Under the new situation, manufacturers are forced to gradually transition from OEM or processing single mode to ODM mode.

Clothing brand "flexible supply chain" to create odd and even drawing

In the traditional production mode, manufacturers are used to the mode of "determine sales according to production". Mass production ahead of time will lead to a large amount of stock accumulation. If we want to solve this problem from the supply side, we need the brand to accumulate relevant experience and seek more advanced factories to carry out small order quick response.

However, although there have been attempts in the industry such as rhinoceros factories that tmall has put into use before, it still needs the joint efforts of the whole industry to optimize the supply chain management capabilities of a large number of small and medium-sized businesses.

Obviously, the brand that first accumulates the ability from grasping forecast trend to supply chain management will stand out in this round of competition. As the main position of clothing business, tmall Taobao has been helping the brand to achieve this goal. However, who can stand out depends on the brand's self-cultivation.

Write it at the end

Just last week, my girlfriend and I were very impressed by our shopping experience.

My girlfriend and I spent nearly 40 minutes in the taipingniao women's costume at the fair. From the shop assistant's recommendation to fitting, to comparing the online price to the offline bargaining, almost every detail of the girlfriend has not been ignored. With her in the store for dozens of minutes, most customers completed their shopping in this almost "harsh" way.

A fact is that, as a representative of non-standard industry, consumers in the clothing market have become increasingly demanding. For the price, style, collocation are more sensitive than before, diversified demand is an irreversible trend.

This has also sounded the alarm for a number of surviving clothing brands. It is difficult for non-standard industries to find a fixed and reproducible sales model, and it will fall behind the times if we rely on the logic of explosive products and low price breakthrough.

Similarly, for the e-commerce platform, the synergy effect with the brand is gradually expanding. After the dividend of flow theory fades, the lack of perfect and mature value chain will make the clothing brands feel at a loss.

According to statistics, in the first three quarters of 2021, the profits of brand clothing enterprises were + 119% and - 27% respectively over the same period of 20 and 19 years. This indicates that the clothing industry is getting rid of the haze brought by the epidemic and is heading for a new direction and trend of recovery. A brand survival war around the e-commerce platform is quietly starting.

As the primary factor of clothing, food, housing and transportation, what kind of clothes to wear is never a trivial matter in the minds of consumers.