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Zhang Huarong, who is the chairman of Huajian group, a shoe making enterprise in Dongguan, has just talked about the cooperation with Beijing pure department store limited liability company (hereinafter referred to as "pure department store").

Zhang Huarong's evaluation is due to the "special treatment" enjoyed by Huajian in pure department stores: zero rent, zero deduction rate, and 7 day checkout period.

This brand new "007" investment mode has attracted suppliers like Zhang Huarong from all over the country in a short time. Behind this mode is the subdivision of pure department stores for investment promotion, and outlines a new business model for future business.

Huajian group's previous business was mainly to take orders from Europe and the United States. In the past two years, it began to switch to domestic trade channels, and also launched its own brand "Jackie Chan" and "Alan Delon".

But Zhang Huarong found that domestic trade channels did not succeed.

According to him, the product of NINE WEST 50%, the famous American shoe brand, was commissioned by Huajian group.

In the US, the price of a pair of NINE WEST sneakers is around $20.

But in China's shopping malls, although the price of NINE WEST has been set at 800 yuan, the gross profit margin is no more than that of foreign trade. Apart from the high discount rate of shopping malls, there are other kinds of other costs, such as gray costs and inventory, which have to be paid to enter the shopping mall.

Zhang Huarong's experience is very representative in the foundry enterprises that turn to domestic trade.

Hu Naipu, vice president of pure department store, has worked in the department store for many years.

He told the China Business Daily that at present, department stores generally have high rates of deduction (25% to 50%), long account periods (45 days to 9 months), and promotion costs are completely pferred to suppliers, forcing the prices of goods in the shopping mall to keep rising.

In addition, under the existing supply chain system, clothing from the factory production to the shopping mall has to go through layers of agents. The common process is the clothing manufacturer, the general agent, the regional agent - the distributor - the shopping mall.

Such a complete process, consumers will have to face the reality of high prices.

Taking clothing as an example, the increase rate of department stores is on average 6 times, and the high-end department stores such as Yansha are more than 10 times.

In big cities such as Beijing and Shanghai, there are many shopping malls. Such a situation is that sales promotion is a sea of people.

This fully shows that consumers have consumer demand, but the prices of shopping malls are so high that consumers can't afford to discount them. So the shopping mall with a high price has entered a discount circle, which has been discounted all year round, and at the same time it has also sacrificed services.

Interview, Taiwan bags

In addition, Jiang believes that the biggest headache for suppliers is the store account.

In his view, a reasonable account period is 45 days, if the account period reaches 60 days, is the limit which the supplier can endure.

Take the luggage industry as an example, generally from the preparation to production, the period is 1.5 to 2 months, plus the shelf time is 45 days.

That took 3 months.

If a mall does business for 1 million yuan a month, the increase in liquidity will increase by 1 million yuan every month.

That is to say, a shopping mall accounts for 3 months, plus 3 months of production, then the liquidity of the enterprise must be maintained at 6 million yuan.

The long account is like a supplier's death sentence. There have been many disputes between shopping malls and suppliers in Beijing because of the long accounts.

Like the SOGO department store in Beijing's bustling business circle, its account period lasted for 9 months, making many suppliers tight capital chain and quit SOGO.

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65% off single product management

How can we straighten out the contradiction between the price of traditional department stores and the whole supply chain? The industry has been exploring.

The only way to explore the pure department store is to put aside the intermediate links and directly cooperate with the producers. Secondly, the brand without rent is exempt from the rental rate, but the price of the brand entering the market directly hits 65% off of the market price, approaching the wholesale price of the traditional department store.

"Traditional department stores are selling at high prices and slow sales, while pure department stores are selling at low prices, and increasing the turnover rate of suppliers through quick sales."

Hu Naipu said that the price of 65% off of the brand accounted for 80% of the entire department store shopping mall.

But Jiang Yongxiong is not satisfied with the 65% off discount. "I highly admire the pure model, but the crown's products can't be sold at 65% off."

Jiang Yong Hung said: first, the gross margin of luggage products is relatively low. Two, as a brand with better layout in other traditional channels, the crown can not disturb its channel price at a low price.

But the crown still achieved cooperation with the original.

Hu Naipu said that it would be unrealistic to make all the products of famous brands in the market at 65% off now.

Therefore, only 20% of the well-known brands are reserved, and the discount is determined by the manufacturers themselves.

In addition to a small number of brand manufacturers, the main goal of this department store is like the Huajian group, which has excellent manufacturing quality, but the brand is not known.

A large number of foreign trade processing enterprises are turning to domestic trade channels, and their products conform to the pure "superior quality and low price" strategy.

Zhang Huarong thinks that the pure department store's mode is very valuable to itself.

He counted out an account. The brand he created in China was exactly the same as the quality of NINE WEST. The sales price in the domestic counter was 800 yuan, and after 65% off, it still had a higher profit than the foreign trade sales of 20 dollars.

Another category is the well-known brands of sub brands, such as underwear brand, Li Fang Fang has entered the pure department store, but only the sub brand has joined the 65% off team.

The "007 mode" seems to have made the supplier cheap, and the actual department store is also a big winner.

Hu Naipu analysis, pure department store implements commodity single product management, that is, according to the difference of each commodity, charging 1~35 yuan paction costs.

This way makes the paction mode of both sides very simple and pparent, and eliminates the artificial grey cost.

Although there are not many commissions, the turnover rate of pure department stores will be greatly accelerated after the price is reduced.

Hu said that the 47 thousand square meter area of pure department stores can achieve 1 hundred million profit in a year.

Although the traditional department stores such as Zhongyou department store, such pure profit is not high.

But in this way, pure department stores can quickly assemble consumers, bind suppliers, and support the chain operation of their stores.

Once the Dalian lock mode is realized, the supplier will automatically bind the pure department store.

The reason is that suppliers no longer need to negotiate with multiple shopping malls.

ZARA fast fashion

The ITAT mode has been flourished two years ago. For suppliers, it also has zero rent and zero deduction rate. According to sales volume, it is divided between suppliers, property parties and ITAT three parties.

Under the support of IT system, the three parties achieve pparent profit distribution.

However, the ITAT mode will soon decline because suppliers are mostly goods in stock and far from fashion trends. It is difficult to protect consumers' continuous enthusiasm.

Pure department store 80% is a non famous brand, how to protect the continuous attention of consumers? The vice president of pure department store told reporters that the pure department store established its own fashion center, which is composed of Beijing Institute Of Fashion Technology teachers, famous designers and fashion personalities. It regularly releases information to suppliers to guide the production of suppliers.

At the same time, fashion designers and designers are regularly organized to evaluate products in shopping arcades and eliminate products that are not popular with consumers.

In addition, the core is that the single product management mode established by pure department stores is different from the extensive brand management or category management of traditional department stores.

Like ZARA, under the support of ERP (Enterprise Resource Planning) system, the real-time sales data of each single product can be seen, and suppliers can call data at any time in the department store system to guide their production.

Zhang Huarong believes that this is very valuable for manufacturing enterprises. Enterprises can understand consumer preferences in a timely manner and shorten the supply chain to reduce inventory.

Critical point VIEW

Key non famous brands

Xie Ping, director of the Department of fashion art design of Beijing Institute Of Fashion Technology, said that in Europe, ZARA's fast fashion mode made it one of the largest clothing enterprises in the world.

The way of ZARA is to guide the design by pferring daily sales data to headquarters.

But the weakness of ZARA is that the foundry enterprises are distributed in some small countries, sometimes the quality is not satisfactory.

The suppliers chosen purely are foreign trade foundry enterprises with excellent production capacity.

Therefore, as long as the fashion information is rapidly pmitted to the enterprise end, pure department stores can also become China's ZARA.

Xie Ping believes that the most valuable commodity in pure department stores is actually 80% of the non famous brands.

In many fashion people's wardrobe, only 10% of the well-known brands, and the other 90% may be in line with their own aesthetic and taste of non famous brands.

Therefore, Xie Ping predicted that the real fashion people are directed at the 80% non famous brands of pure department stores.

And through customer data, fashion information sharing, pure department stores more firmly bind suppliers, and also stick to consumers. This is also the basis for chain store expansion of pure department stores.

However, Jiang Yong hung believes that unlike traditional department stores that earn profits from rent, deduction and occupation, the department stores will have enough room for development on the basis of 7 days' accounts. Manufacturers will speed up capital turnover and speed up the turnover of commodities, and profits will also come from this.

However, the key is to adhere to this model purely, instead of changing the rules of the game once it becomes a strong terminal.