Lang Xianping: How To Break Through The Traditional Manufacturing Industry

　　 Chinese traditional manufacturing industry The future is to transform pure manufacturing into a traditional labor intensive industry with efficient integration of industrial chains. I'm from Spain. ZARA Sweden H&M For example, how to proceed. Efficient integration of industrial chain 。 The reasons for the success of ZARA and H&M are different from those mentioned in the previous chapters. They do not emphasize the essence of Prada and Anna Sui's brand positioning triangle, but rather reduce the price and improve the appearance of fashion through the efficient integration of the industrial chain, so as to increase the price performance ratio by 1.

　 Is there really no way out for the low end manufacturing industry? The new thinking behind the 230 thousand outlets in Jinjiang

In the preceding chapters, we talked about the 1 cost performance ratio and the 2 price performance ratio. Many consumer goods must be sold through advertising to create the essence of the industry, thereby increasing the cost performance ratio of 2. But I noticed that in recent years, ZARA, a clothing brand that never advertise, has sprung up all over the world, not only defeating the GAP of the United States, Japan's Uniqlo and Hongkong's Esprit, but also getting better and better in the economic recession. How did it succeed? Without advertising, the spirit of the industry could not be produced. However, through the efficient integration of the industrial chain, it strengthened the cost performance ratio of 1 and totally ignored the cost performance ratio of 2. The success of ZARA deserves our traditional labor intensive industries.

It has been more than 9 months since the outbreak of the global financial crisis was calculated on the basis of the Bank of America's abandonment of Lehman brothers in September 2008. The global economy is heading for a recession due to the US financial crisis. However, in the context of the economic crisis, we find that some industries are still relatively hard pressed. Such as e-commerce, Internet, pawnbroking, training, entertainment and so on. Even in the same industry, some enterprises can still find business opportunities and find the warm current in the market in crisis. So, in the background of economic depression, why are some enterprises still able to develop against the market? What are some new ideas about this?

I remember in the past few months, I went to Jinjiang, Fujian to give a speech. The leader of Jinjiang told me that more than 60% of Jinjiang's export manufacturing industry had been hit hard, but some brands in Jinjiang are still in a state of business at present, and are more resistant to pressure. He said that the whole Jinjiang brand enterprise has 230 thousand retail outlets, and these enterprises are in good condition. At that time, I said, your observation is right, but your explanation is wrong.

In fact, the reason why these enterprises resist pressure is not because they are famous enterprises, but because they have 230 thousand outlets. Do you know what else is there before 230 thousand outlets? There are a series of work to do. Are there any warehouses before the outlets? Are there any warehouses before storage? Is there any transportation before storage? Is it necessary to process orders before transportation? And, do we have to make the products that are sent to the warehouse first? Do we have product design before manufacture? It looks as if you have 230 thousand retail outlets, so it's more pressure resistant. In fact, these brand-name products are resistant because they have a series of things before 230 thousand outlets. I will discuss this point in detail in the next section.

　 Two, unaffected ZARA: the strategic thinking and development mode behind the expansion of counter market.

The repair of a new Beijing Qianmen Street appears to be a bit cool under the impact of the global financial crisis. In April 23, 2009, the opening of a well-known fashion brand H&M from Sweden increased the vitality of Beijing's most prestigious old business street. Many photos taken on the day of the opening ceremony recorded the hot selling scenes at that time. The young man came out of the shop excitedly, almost a few H&M paper bags. The "hot" of H&M formed a contrast with the "cold" of Qianmen Street. Meanwhile, another Spanish fashion brand ZARA also announced in the near future that the company will expand its investment in Asia in the coming year, especially for the Chinese market. So, what causes the two fashion giants to invest in China in the face of the global economic downturn? What kind of strategic thinking and development mode do they contain?

I take the clothing industry as an example to give you a hint that what kind of enterprises can withstand pressure under the impact of the financial tsunami. We have collected a lot of data from the clothing industry recently. I use two foreign companies that have just entered China for example. A company called SA La, Spain, the English name is ZARA, and has opened stores in Guangzhou, Shanghai and Beijing. There is also a Swedish company, H&M, which also makes clothes and stores in Shanghai and Beijing. What are the characteristics of these two companies? They are low price and fashionable fashion, but the quality of products is general. However, the two advantages of low price and fashionable appearance greatly improve the price performance ratio of 1. {page_break}

Our data show that although ZARA is a general consumer product, its business is in good condition. In March 26, 2009, Isla, President of ZARA, said that they were not affected by the financial crisis. In the first quarter of 2009, net sales amounted to 2 billion 338 million euros, up 5% over the same period last year. They are planning to gradually increase profits and expand the market to Asia. ZARA's biggest competitor, H&M's first Beijing store, opened in the front gate in April 23, 2009, while H&M's net profit increased by 13% in 2008. However, its global sales situation was poor in 2009. Its first quarter profit fell by 12.6% in the first quarter, and net profit fell for the first time in five years.

For these two general consumer company, it is not easy for ZARA and H&M to achieve such results during the depression compared to the plight of Nike and Adidas.

H&M and ZARA are the same as the 230 thousand retail outlets I mentioned before in Jinjiang. This is explained by the characteristics of their products. When I arrived in Beijing a few days ago, I went to Yansha to go shopping. I wanted to buy a woman's suspenders. I didn't buy it for myself, nor was it for anyone. I was just asking for it. As I saw, a $four hundred or five hundred piece of the shirt was sold, so the thin shoulder Jersey sold for four hundred or five hundred yuan. I could not bear to buy it. It was too expensive. I went to ZARA to buy 100 yuan. The special counters of Yansha are mostly domestic brands, which sell for four hundred or five hundred yuan a piece. What opportunities does it have? ZARA is a brand imported from abroad for only 100 yuan, and ZARA 80% is produced in Europe, and only 20% of its products are produced in Asia, including China. We usually think that labour intensive clothing industry, of course, should come to China to reduce costs. However, they ignore China and do not come at all. Because their success is different from what we used to think, they simply can't see China's cheap labor force.

　 Three, giving up creativity is the greatest creativity.

Our Chinese brands sell four hundred or five hundred yuan a piece of clothing produced by China's cheap labor force, while the 80% products produced in Europe do not sell cheap Chinese laborers for 100 yuan per ZARA of their suspenders. What is the reason? And the clothes of our Chinese brands are weird and have no sense of fashion. It's not my sarcasm. The level of our Chinese design is weird. The clothes are very complicated and have no aesthetic feeling. Because our designers lack the experience of economic depression, so they always do some facial expressions. This flower is not fashionable. You go to see H&M and ZARA, their clothes are very simple, but even a simple suspenders have a very fashionable sense of art. Why? We used to think that cheap products must be because of the cheap labor force and low cost, and the fashion designers must be the best designers. I tell you, ZARA is almost the largest clothing brand in the world, but it doesn't have a big designer. Its hundreds of designers are all more than 20 years old.

A fashion company without designer, why is its product particularly fashionable? It is totally different from what we think. What is their company philosophy? Only by giving up innovation can products become fashionable. A nation like us who cries for independent innovation is usually a less creative nation. How creative is it to think of giving up creativity? A company that neither relies on cheap labor in China nor does it rely on product innovation can not only carry the financial tsunami, but also perform well, and their products are cheap and fashionable. What is the reason?

GAP of the United States, ZARA of Spain, H&M of Sweden and C&A of Germany are the four most successful retail brands in the world. The four companies in addition to GAP in the United States, the remaining three have been settled in China. The ZARA brand has been expanding since its birth in 1975. At present, there are more than 2000 ZARA chain stores in 56 countries around the world, and more than ten chain stores in China. Sweden's H&M was founded in 1947, and it can be said to be Europe's largest apparel retailer in terms of sales volume. At present, H&M has about 1700 fashion boutiques in major cities including Shanghai and Hongkong, with nearly 55 thousand employees worldwide. At the end of 2008, the annual financial statements of H&M showed that although its impact was affected by the global financial crisis, its net profit was 15 billion 300 million Swedish kronor, an increase of nearly 13% over the previous fiscal year. So why is ZARA and H&M still keeping a strong sales momentum in the economic environment that is not very good and the purchasing power is low? What is the secret of this?

You must be surprised to see this, because their success is quite different from what we think. Do you know why it is different? Because we are a very creative nation, so we can not see clearly the essence of the problem and see the surface phenomenon. So what's wrong with our clothing industry?

The success of ZARA is the same as the success of these enterprises in Jinjiang, that is, they control the whole industry chain. As I mentioned before, Jinjiang enterprises still have wholesale, warehousing, transportation, order processing, manufacturing, product design and other links before 230 thousand retail outlets. Only by controlling the whole industry chain can we control the pricing power and the product will be cheaper. Only by controlling the whole industry chain can products become fashionable.