30 Years Of Chinese Clothing: Refraction Of Business Change

30 years of reform and opening up, China's apparel industry has produced many vivid and wonderful business stories.

There are many practitioners in the whole industry: from the 80s onwards, they started selling clothing from the street to the street, starting in the wholesale market in 90s, opening the stalls, selling their own brand clothing to the whole country and even the rest of the world; entering the twenty-first Century, in order to further expand their influence, the market network was penetrated into various modes such as agency and direct operation.

It can be said that the Chinese clothing industry has never ceased the exploration and practice of business innovation, and the change of business environment has also provided a new reference for the growth and strategic adjustment of the garment industry.

Sprouting: the age of "traders"

After the reform and opening up, the decision-makers who have grasps China's destiny have been solving the problem of ideology and circling around "whether to go on the market economy or plan economy".

Because of institutional reasons, enterprises do not know what the market looks like. People who just jump out of "gray, black, blue, green and white" do not know what kind of clothes they need.

In 1979, Hanzheng Street began to try a market economy amid controversy.

Before that, clothing supply is entirely planned, and production enterprises do not need to know the final flow of products.

In September 1982, the twelve major conferences of the Communist Party of China put forward the principle of "planned economy as the main form and market regulation as subsidiary", and took the road of building socialism with Chinese characteristics.

In 1984, the 30 year old cloth ticket became history, and the garment industry began to develop rapidly.

At that time, the supply was mainly concentrated in state-run clothing factories in big cities such as Beijing and Shanghai. These famous brand clothes concentrate on Yu Dazhong city.

The new business model has also been born.

In the 80s of last century, a group of traffickers, such as "Grandpa", who sold fashionable clothes from other cities like Guangzhou to other parts of the country, appeared in many large and medium-sized cities.

In July 12, 1986, the media published a manuscript about the early clothing market in Beijing, titled "Beijing popular yellow skirt".

The article reads: "an individual who is responsive to the market."

It can be seen that at that time, the embryonic form of the clothing wholesale market had been formed, and the main selling form was to go from door to door, set up the selling style and sell the factory.

For example, Li Zhenhe, director of the Management Committee of the clothing market of Xi Liu, told us that the establishment of the clothing market of Xi Liu originated from a farmer named Ding Qishan.

In 1979, Ding Qishan accidentally discovered that the trousers he made were cheap, and the price was cheaper than state-run stores.

Driven by Ding Qishan, the villagers followed suit, and everyone began to make pants, sell pants, and sell to all parts of the northeast, so a street market spontaneously formed.

It can be said that after the reform and opening up, the exuberant market demand gave birth to a commercial era dominated by seller's market.

However, in the first 10 years, the structure of the clothing industry is very simple.

Growth: collective breakout

In 1990s, the Chinese economy entered a period of rapid growth. The clothing industry was very active. Many coastal apparel enterprises such as Guangdong, Zhejiang, Jiangsu and Shandong emerged, and the whole industry was becoming more and more mature.

In the spring of 1992, after the speech of Deng Xiaoping's South inspection tour, many entrepreneurs took a reassurance. The first batch of leading enterprises was born, and the famous brand strategy was clearly put forward in the clothing industry.

In this period, clothing business is mainly composed of two forms: one is the wholesale market, the other is the retail market, both of which support each other and complement each other.

Although the pattern of circulation did not seem to have changed significantly, there was actually a surge of undercurrents.

On the one hand, the wholesale clothing market is everywhere.

In the mid and late 90s, the wholesale market became the main channel of clothing circulation, and some markets moved towards scale, standardization and branding.

At the same time, large-scale retail business reform also started in big cities like Beijing and Shanghai. Commercial companies, business groups, commercial building on the stage, shopping malls became the main places for urban residents to consume clothes, and also become the first choice for powerful brand enterprises.

On the other hand, after the mid 90s, especially after the financial turmoil in Southeast Asia in 1998, the Chinese clothing market was gradually coming from the seller's market to the buyer's market.

Shanshan, by outsourcing the processing and helping the franchisee to break away from the sales and production links, only focuses on the "most core value" link of the clothing industry, which is a successful attempt. The best player to manage the virtual business is Metersbonwe.

When Metersbonwe was founded in 1994, President Zhou Chengjian had only 4 million yuan of original capital.

Because of the limited funds, he decided to adopt a unique business mode, focusing on both the production and the market, and concentrating on the operation of the brand.

At that time, the mode of virtual operation was not accepted by the industry. It was also called karate. Zhou Chengjian was even known as "virtual gentleman".

However, just a few years later, the growth rate of Metersbonwe made the clothing industry realize the power of light assets operation.

At this point, there are two kinds of channels for clothing enterprises to enter the channel: one is the extension from manufacturing, such as YOUNGOR, Shan Shan, red beans, tiger leopard, etc., all started in garment manufacturing in 1980s, and started construction or operation channels in 90s; the other is in the middle of 90s, starting from brand marketing, such as Metersbonwe, YISHION, etc., outsourcing manufacturing, and selling them in a licensed way.

It is worth noting that after the mid 90s, franchising began to become popular in the fashion industry, and gradually became the mainstream mode. Many enterprises, especially men's wear brands, were willing to use franchise to expand the terminal market.

"If we can't pform an industrial brand into a commercial brand, the development of the market will have great limitations."

YOUNGOR clothing deputy general manager Chen Zhigao said so.

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Contention: mode is king.

"Can we first bring back our biggest profit, that is, the lost part of business and brand?

Carry out the innovation of management mode, and grasp the profit of operation?

"Can we get 40% of our profits in the next five years?" Du Yuzhou, President of the China Textile Industry Association and President of the China clothing association, issued such an appeal to the whole industry.

Generally speaking, the commercial contribution rate of international textile and apparel industry occupies 40%-60% ratio in the industrial value chain, and it is the core power to promote industrial structure adjustment, change the mode of growth and realize brand value.

With the layout adjustment of the global textile and garment industry and the integration of global business and economic integration, business innovation has become a crucial step in the process of China's textile and garment producing power to the brand and strong country.

Promoting independent brand business innovation and carrying out business innovation project were included in the key work program of China Garment Association in 11th Five-Year.

Jiang Hengjie, executive vice president of China Apparel Association, pointed out that if China can not become a commercial power, it will not be able to become a brand power. Business pformation is one of the last changes in China. The potential value of industry, technology and brand needs and can only be converted to market value through business, otherwise it can only be the cost of zero value or negative value.

A vigorous wave of business pformation has begun in the new century.

Garment circulation was first developed as an industry.

The marketing mode of enterprises has also undergone a fundamental change. The widely used agency system has been replaced by more efficient joining and ordering systems, and brand franchised stores, franchised stores and clothing franchises have springing up everywhere.

The wide application of the Internet not only improves the efficiency of supply and marketing, but also becomes a fashionable sales channel.

The voice of "pattern is king, channel winning" echoes throughout the clothing industry.

Not only has there been a number of innovative models of clothing business channels, clothing leading enterprises have begun to practice business innovation.

International brands are also landing on China's clothing business battlefields in the light of China's market mode. The majority of small and medium-sized enterprises are in urgent need of business innovation to bring about breakout.

Especially in 2007, along with the comprehensive competition of domestic and foreign clothing enterprises in the Chinese market, the industry and commerce further realized innovation and interaction, showing many unprecedented bright spots and new hot spots: Shanshan and other brand enterprises entered the retail industry, trying to integrate the business chain; ITAT, PPG took advantage of capital and mode to become the new business leaders; seven wolves, news birds and other enterprises accelerated the upgrading of terminal stores through listing and financing; and ZARA, H&M, GAP and other overseas retail brands compete with domestic brands in two channels.

The dispute over the business model derived from the new economy has become increasingly fierce.

On the whole, through the 30 years of business innovation process, the garment industry has basically gone out of the world of several points, coexistence of diversified channels, and the co prosperity of various commercial development modes.

In 2007, it was regarded as the turning point of Chinese clothing business innovation, which indicates that the industry is pregnant with greater changes.

Of course, the next step is to see how the business pattern will be in the future.

At present, the mainstream clothing business models of Chinese clothing enterprises and clothing brands have five kinds:

Self run: clothing brand chooses the right place to invest and manage the store. Its role lies in better brand image, easy realization of vertical management and fine marketing, strong execution of market plan, and accurate mastery of market information.

The disadvantage is that the investment is large and the demand for human resources is high.

In recent years, clothing brands tend to adopt a combination of direct and franchised business models.

Franchising: franchising is a mode of developing franchisees directly from franchised headquarters or by developing franchisees by franchisees.

Nowadays, casual wear brands are mostly operated by franchising.

The advantage of this mode is that the brand management is in accordance with the standardized operation and system update, but the requirements for the synergy of the two parties are higher. The State Council's "business franchise management Ordinance" has increased the threshold of franchising.

Wholesale: the wholesale market has a wide range of radiation. Many large wholesalers have sales outlets all over the country. They can quickly roll out their products in the market and quickly realize the withdrawal of funds.

This is a common sales mode of some low and medium grade products in China.

The disadvantage of this model is that it is not conducive to setting up brand image.

Agent: this mode generally divides the national market into several regions, and establishes agents in each region. The enterprise authorizes the agents to be responsible for the sales of products in the region, and the agents develop and manage subordinate terminals.

This mode is the main mode of clothing product distribution at present. It can save channel and expand cost and management cost, and play the initiative and enthusiasm of agents, but it is not easy to control brand operation and goods management.

Internet sales: network sales can not only reduce intermediate links and save actual sales costs, but also has many advantages, such as timely collection of information and fast logistics management.

However, because clothing itself is still a special product on the basis of traditional consumption patterns, at the same time, China's Internet related laws are being improved, and there are hidden dangers in currency online pactions.