Home >

PPG Network Direct Selling Unveil New Era Of Clothing

2008/11/13 11:25:00 17

??? 日本語 Fran?ais English 中文

When PPG was founded in 2005, no one would think that it would become a "catfish" to change the operation mode of Chinese garment enterprises.

It does not open any stores under a single line, but only through mail order catalogues and direct sales shirts.

Therefore, in 2007, PPG claimed that its sales volume was expected to reach 10-15 billion yuan, and then became the largest company in the apparel industry. This amazing growth speed undoubtedly brought great shock to China's garment industry.

With a lighter channel and fast response supply chain, innovative business models to promote the efficiency of the entire industrial chain - although the appearance of PPG has made traditional garment enterprises feel weightless, the exploration of China's clothing industry's light asset operation is actually not opened by PPG.

In the past 10 years, the light assets company of the domestic garment industry has gradually developed into the light assets operation of the entire supply chain from the initial outsourcing production and channel functions. Until the light company model represented by PPG is rising, it symbolizes that Chinese clothing is ushering in a new era of commercial channel pformation.

模式之爭的背后

With the weakening of the international comparative advantage of garment industry and the upgrading of domestic clothing consumption, industry competition is changing from the traditional low-cost competition mode to multi-level competition based on brand and channel, and many garment enterprises have gradually cast their eyes on the innovation of channel mode.

There are usually four kinds of channel modes in China's apparel industry: agency system, direct operation, franchising and e-commerce.

From obscurity to fame, PPG took a year and a half.

This is not only because of people's wide coverage of advertising, but also because of its shock to the traditional clothing industry - the introduction of DELL computer direct sales mode into the clothing industry.

The company has no physical stores, factories and assembly lines, and has fewer than 500 employees, including more than 200 call center staff. It sells direct sales of 10000 men's business shirts by using Internet, telephone and directory. Its growth momentum has forced YOUNGOR, the traditional shirt manufacturer, to sell 13 thousand shirts recently.

Without opening offline stores, outsourcing production and logistics to reduce costs. Through IT technology and the Internet, the upstream and downstream industry chains are linked up, information flow is used to direct partners, and inventory is distributed to partners so as to minimize their inventory. These means constitute PPG's "light asset operation mode".

Compared with "big shirt giant" YOUNGOR, who invested heavily in building up its upstream and downstream industrial chains, as well as huge investment in fixed assets and terminal construction, PPG's appearance naturally appeared "lightsome".

Even though the emergence of PPG has brought inspiration to the garment industry, the industry background behind this phenomenon needs to be further analyzed.

Since the beginning of reform and opening up, many small and medium-sized OEM enterprises have shifted from exports to domestic sales, which directly leads to the continuous overproduction of domestic garment production capacity, and many garment factories need to find new outlets.

In the process, the light assets operation of enterprises has become a very attractive direction, because not all enterprises can afford to bear the heavy pressure from manufacturers to sales outlets.

At present, PPG's network direct selling mode is not replicable, and because of its narrow product domain and thin service content, PPG experience is more complementary to the existing business mode, and will not become the mainstream mode of China's clothing industry.

輕資產演進路線

When PPG becomes the pronoun of "light company", it will naturally remind us of the United States in the clothing industry.

As early as in 1995, Zhou Chengjian outsourced the production process of math group to garment manufacturers, attracting franchisees on the channel, grasping high value-added design links, and vigorously promoting brand image. This light asset operation mode has become a classic case of domestic apparel industry's virtual operation.

Driven by the demonstration of Mts. Bang Wei, many garment enterprises in Wenzhou have broken through the bottleneck of the development of enterprises through the virtual operation of light assets, and become the well-known clothing enterprises in China.

Compared with the US group, the clothing enterprises of light asset management such as Hai Lan home and ITAT choose the way to capitalization through strengthening management and control capabilities, namely, leveraging management and information systems, outsourcing production and sales functions, and finally achieving scale expansion.

Hai Lan's family manages every franchisee, including goods delivery, store management, operation and location of stores. It is managed by Hai Lan's home. The franchisee is responsible for contacting with local business, taxation and other administrative organs.

To some extent, this is equivalent to the franchisee's commitment to capital investment and daily operation matters, while the real sales management has been outsourced to Hai Lan's home.

Obviously, such a light asset strategy makes the cash flow of Hai Lan's home more smoothly.

ITAT (InternationalTrademarkAgentTrad)