Apparel Foundry Test Water Retail: Fan's "Apologize Door" Exposed Soft Rib

Hot online network Vancl, a clothing brand, is facing a credit crisis triggered by "broken goods". In May 26th, Vancl, a company named CEO, apologized to consumers in an open letter. It said that due to the delay in the delivery of 40 thousand user orders due to the relocation of warehouses, an emergency remedy and compensation plan was launched urgently.

Fans only sell clothes on the Internet, and now they sell more than 30 thousand pieces a day. Over the past two or three years, clothing e-commerce businesses have sprung up in China, and some are imitating the mode of customers. Some of them are already well known in the regional market, while others are directly oiling on the Internet. The B2C mode is becoming a new form of practice in the traditional clothing industry.

Self built logistics distribution

Fan's "apologize door" exposed soft rib

Because the warehouse is relocated. Van guest Sincere goods suffered a credit crisis last week.

Last week, the "network family" often ordered several clothes on the customers, and a week later, the clothes had not yet been delivered. Many consumers, who also suffered from Xiao Chang, complained about their complaints on the website of van customer.

May 26th, fan CEO Chen made an apology to users on the website: since May 19th, tens of thousands of orders have been delayed delivery, with the user complaints I see, more than 98% of those concerned. Anger and incomprehension, repugnance and helplessness and so on, and emotions, and words, I am uncomfortable and sad. Van customer service has gone through the relocation of warehouses in Guangzhou and Beijing. After the relocation, the storage area expanded from less than 20 thousand square meters to 100 thousand square meters. Subsequently, fan Kai Cheng launched the remedy and compensation scheme, with a total compensation of $1 million.

Although this is just a coincidence event in the old age, the logistics and distribution problem of e-commerce is once again mentioned on the table. The service level of logistics industry is lagging behind, it is difficult to meet the personalized needs of e-commerce manufacturers, and the rate of customer complaints remains high, which has become a bottleneck for the rapid development of e-commerce enterprises.

Unlike most e-commerce enterprises that outsource logistics to third parties, customers have their own logistics and distribution team, such as "wind up" company. The express fee of "wind up" is 15 yuan, the price is higher in the same industry, and the shopping is full 200 yuan without the express charge.

However, since the establishment of all customers, the biggest complaint is "not timely delivery". Chen told reporters that "Feng Feng" has limited distribution capabilities, and they also have third party distribution partners. But a great advantage of "Feng Feng" is that if customers are not satisfied with their clothes, they can return them immediately after delivery. "If we want the third party distribution partners to do this, we must add money."

It is understood that in less than six months after the establishment, capital turnover is not smooth, all customers decided to set up their own logistics. The self built logistics company is designed to match the sales network, but compared with the third party distribution companies outsourced, the operation cost has increased by 20%, and the corresponding logistics cost resulting from the return of goods is also a huge expense. But Chen believes that these operating costs in return for "turn around" improvement.

Chen said that in the logistics and other aspects of huge expenditure, the establishment of all customers has been a loss, "and a large amount of loss." However, Chen said that at present, all customers have completed the four round of financing, and it is expected that the company will be profitable in the next year.

Encountering financial crisis

Foreign trade enterprises "export to domestic market"

In the second half of 2007, many enterprises were immersed in the impulse of taking PPG as an example. Under the background of oversupply of garment manufacturing industry, the direct selling mode of PPG shirts is very easy to be copied -- establishing an online sales platform, recruiting some people to answer the phone, and then looking for orders from factories, relying on the third party express company to quickly set up the stall. Before and after this time period, there are only more than 30 followers of PPG mode in the field of shirts direct selling.

"We just started learning PPG." Old age does not hide this. Because in October 2007, before the establishment of all customers, PPG has already taken the first place in the domestic brand clothing e-commerce, and the total financing scale for late stage is 50 million US dollars, and the momentum is hot.

But then, because of the big advertising strategy, when the vendor stalls were too large, PPG had problems in the capital chain, and PPG fell from its peak in a few months. However, at this time point in 2007, e-commerce has been accepted by consumers. With the rapid growth of online shopping market, customers are rapidly burning up as they aim at the target audience.

Subsequently, due to the impact of the financial crisis, many garment foundry enterprises began copying the mode of PPG and customers since 2008, and Practising "export to domestic sales" on the Internet.

Out of the South Fifth Ring Road of Beijing, one way to the southwest is a path that is full of freight cars, and seven turns into eight villages. Reporters found that every dog in the village had dogs, and all large dogs were used to guard warehouses. This place is called Da Bai Lou industrial zone. A large number of garment enterprises that engage in foreign trade business concentrate on this. But two or three years ago, they began to "transform" to sell their brand clothes online.

Lao Liu is the boss of one of the enterprises. Recently, he has asked workers to build up a new factory building and expand the scale of their old storehouses and toilets.

Lao Liu is doing business in foreign trade. He said that the foreign trade business is more standardized and the money back is also guaranteed. Before 2007, they seldom received domestic jobs, because they had much trouble with domestic buyers. At that time, more than 95% of their business was foreign trade.

In 2007, Lao Liu found that many domestic enterprises found them, asking OEM to sell clothes online. With more telephone calls, Lao Liu also wondered whether he could sell his own clothes on the Internet platform. After all, the profit was much higher than that of a simple OEM. With a tentative attitude, Lao Liu invested less than 1 million, set up his website and signed a contract with a courier company, mainly for retail in Beijing. {page_break}

By the second half of 2008, this website has been a great help to Lao Liu. The financial crisis seems to have arrived overnight, and the number of foreign trade orders has plummeted, while more and more people are buying things online. Lao Liu said that their OEM enterprises had a high demand for cash flow, and selling things online quickly and profits were large.

It is understood that many traditional clothing brand enterprises also began to test the water online retailing industry in 2008. Last year, JACK&JONES and Kappa reached a maximum turnover of about 5000000 and about 4000000 yuan respectively in Taobao. At the end of last year, IBM used its own e-commerce platform product to build an official online shopping mall for sports brand Lining to meet its rapidly growing online shopping demand in China. As a wholly-owned subsidiary of the news bird group, the BONO high-end business custom series is also emerging in the Internet.

Similar brands get together

Do not want to become a "money" platform.

But for those who rely on Internet marketing to get up quickly, they get hundreds of millions of dollars in venture capital in just three years. They even plan to go to the United States. There is a warning from PPG. Many people in the industry questioned the existence of suspicion.

Wang Yao, Deputy Secretary General of the China Federation of Commerce, believes that clothing e-commerce is a major trend. But he also cautioned that the most important role of e-commerce platform is to promote sales, hoping that enterprises will sell goods after touches the net, rather than as a platform for "money".

Wang Yao said that clothing e-commerce enterprises need three prerequisites for success. First is brand awareness, followed by price, followed by logistics. Only when these three things are available can we talk about attracting consumers.

Lao Liu said that before and after 2008, almost all the factories in their industrial area built an online platform, which was wholesale outside, and retail inside, which has become the standard mode of this area. Now, 30% of Lao Liu's sales are contributed by domestic sales, and the proportion is still increasing.

Next to a factory owner responsible for professional wear and casual wear, their website was built two years ago. They are not just garment factories, but other factories that produce stationery and daily necessities in the industrial area have followed their pattern.

The person in charge also said that nowadays, people who go to their shop to open shop are often able to supply goods without their brands.

Wang Yao said, especially the small businesses that have just made brand names, they can adopt the "borrowing platform" approach, such as not building their own platforms at first, but opening up businesses in the mature market such as Taobao, so as to save unnecessary expenses.

"Don't dream that e-commerce will replace traditional channels." Yang Dayun, a clothing expert, believes that clothing manufacturers are engaged in e-commerce, which is both a short-term trial and a long-term trend. At least for now, there are no successful cases. Before doing factory, now suddenly came to do retail, they do not know how to do the market, do not know how to catch the needs of customers.

Yang said that the key to successful clothing e-commerce is conceptual change, which is absolutely different from that of traditional channels. If you want to invest in e-commerce, you must not do it based on your current advantages, such as your factory, design team, terminal store. For e-commerce, these things are cumbersome and must be thrown away.

"Do not fight each other's minds." Yang said that the existence of the two formats is nothing more than two forms. Their differences in space can never be changed.

Ma Benguo, one of fan's imitator, Lu Tai online marketing manager, told reporters that more than 60% of China's garment manufacturers are now transforming, but the transformation methods are different. "Most of them are transforming into the Internet, some are making their own brands online, others are developing their own dealers in the country, others doing foreign trade platforms and looking for partners, and some other foundry factories such as fan Kai Cheng's online apparel platform.

Followers

Transformation of Lu Tai Group

Lu Tai online is the direct network platform of B2C group, a manufacturer of color woven fabric, which was launched in April 20, 2009. It operates more than 370 types of shirts and sells ties, casual pants and so on. The Lu Tai Group is an old foundry enterprise with nearly 20 years of history of shirt making.

Profit earned by itself

Lu Tai online marketing manager Ma Benguo told reporters, "Lu Tai Group textile products 90% exports, domestic sales accounted for only a small proportion. And Lu Tai OEM enterprises are almost all international brands such as CK and BABARY. But we must know that the profit of garment foundry is too small, and only charge for processing. If you want to make a shirt, you can get a profit of 7 yuan in the end. The factory can only get one yuan, and the remaining six yuan are brand dealers. They almost need nothing but take the most money. Why? Because they have their own brands. The foundries only work for them.

In 2009, under the influence of the financial crisis, the Rutai group, which relies heavily on foreign trade exports, was heavily influenced by the international financial crisis. The transformation of strong garment foundry enterprises is inevitable, including the Lu Tai Group.

"In 2009, Lu Tai Group also decided to devote itself to the cause of B2C and develop its own brand." Ma Benguo said, in fact, it is to compress the supply chain, and bring the profits of 7 yuan into its pocket. After months of planning, Lu Tai Group invested 5 million to build its own network platform, Lu Tai online.

Still facing profitability problems

"We draw on many aspects of van customer, but there are essential differences. We have our own garment factories, but they do not, they are just a trading platform, just a link in the industrial chain. So I firmly believe that we will go further. " Ma Benguo said.

Although there is a strong group backing behind, but the on-line soon Lu Tai online still faces many difficulties. Lu Tai online now has about 30 employees, and still faces profitability problems. "So many online shopping malls, no one dares say that they are profitable. Now everyone is in the development stage. Brand needs long-term training and continuous investment. We must guard against the breakup of capital chain. PPG is a precedent. It has failed in the capital chain, and the quality of products has not been properly closed.

"In addition, the competitive environment is also very complex, and a large number of enterprises are pouring into the market. There are such enterprises as Taobao, fan Kecheng and so on. After that, there will be B2C transformation partners. It is not easy to grow and grow in such a wilderness. Ma Benguo said, and the policy support of various regions is not balanced. The policy of the southern region is relatively loose. In contrast, Shandong's policy tilt is much smaller.