ITAT Alliance Expansion Challenges Management

Following the record of opening 60 chain stores in 7 days during the May 1 year, ITAT has also lifted its banner of opening shop expansion.

ITAT announced this week that during the National Day this year, 100 chain stores will be opened in the country, of which 10 stores will be opened in Beijing.

Starting from ITAT's first store in Shenzhen two years ago, ITAT has opened 38 department store clubs and 500 clothing stores in China, including 14 members and 1 member clubs in Beijing, including Henderson Yansha store and Xidan Huawei store.

The ITAT plan will reach more than 1000 chain stores by the end of the year.

ITAT is expanding its territory with amazing speed, which is mainly due to its unique business model.

ITAT formed a sales alliance with the owners and suppliers of the market, forming a shared interest community. To a certain extent, it reduced the intermediate circulation and reduced the operating cost.

Suppliers are responsible for the supply of goods, shopping malls provide business premises, mainly in the form of store stores, ITAT only responsible for sales management, the three according to a certain proportion of sales.

"ITAT is essentially an output of a business management mode," said Hong Tao, director of the Institute of Business Economics of Beijing Technology and Business University. This model is different from the traditional shopping malls, suppliers and managers who have formed an alliance of interests by shopping malls, suppliers and managers, which effectively solves the contradiction between retailers and suppliers, as well as managers and shopping malls.

This bundled mode is also convenient for enterprises to expand rapidly, and the pressure of inventory and logistics is borne by suppliers. ITAT also does not need to undertake the rentals. Zero inventory and zero rent make ITAT risk and cost very small. ITAT can get 25% to 36% gross profit.

In this way, as long as the storefront network is strong enough, the larger the sales, the more revenue will be divided into ITAT. This will directly stimulate the acceleration of ITAT's opening up.

The rapid expansion of ITAT has brought a lot of benefits to the company, but it also brings huge business risks.

ITAT group related people said that at present, all more than 500 stores in China are directly managed by headquarters, and no branch offices are required to carry out hierarchical management.

Hong Tao pointed out that the main risk point of this mode is the management level of ITAT. Once there is a business crisis, suppliers and shopping malls may appear "one-sided", which leads to the collapse of ITAT's entire chain enterprises and brands.