Zhou Shaoxiong's Marketing Strategy For Seven Wolves

In March 29th, Beijing, Seven wolves Announced the completion of the price of 70 million yuan for Hangzhou Kenna Clothing Co., Ltd. 100% stock right The acquisition, enter the luxury market. This means that the seven wolves, a Chinese garment manufacturer born in the manufacturing industry, are bundled up with the world's top luxury brands, and the seven wolves have the world's top clothing. brand Connally, Versace and famous jewelry brand George Jason and other agents in China.

But at present, the world's first tier luxury brands have basically reclaimed the right to be represented in China, while the second tier luxury brands also show a trend of becoming a direct battalion. This means that the time of "bundling" for Kenna by the seven wolves may be only a brief five years. After five years, the international brands of the seven wolves will also be recovered. Zhou Shaoxiong, chairman of the Fujian seven wolves industrial Limited by Share Ltd, who advocated "wolf survival", could not have foreseen such risks.

Knowing that there is risk, Zhou Shaoxiong still dare to spend 70 million yuan to acquire Kenna equity. Obviously, his "heart" is not how many years of luxury he really wants to sell. The acquisition of Kenna, Zhou Shaoxiong is more hope that he has been weak in the department store terminal gains, and through Kenna has an international brand agent channels to boost the seven wolf main brand marketing. After all, for clothing enterprises, every sum of money should be spent on the knife edge.

"High-end" main brand campaign

Hangzhou Kenna, which spent $70 million on the seven wolves, has the agency in China such as Connally, Versace and the famous jewellery brand GeorgJensen George.

As the first attempt by the seven wolves to take part in the large-scale mergers and acquisitions of high-end agent channels, the acquisition of Kenna is in line with the target of 2007 listing and financing of "seven wolves", which is "clothing and clothing oriented enterprises", which is also in line with Zhou Shaoxiong's plan for the development of POLO brand in China.

At present, Hangzhou Kenna has set up 15 Connally brand outlets and 4 Versace outlets throughout the country. Its main business areas are concentrated in the northeast and East China. As of December 31, 2010, in just two or three years, Kenna apparel achieved operating income of 66 million 370 thousand yuan, with a net profit of 7 million 840 thousand yuan.

Zhou Shaoxiong said that after the acquisition of Kenna Hangzhou, the seven wolves will retain Hangzhou Kenna's original international brand agency operation experience team.

Zhang Jianmin, general manager of Hangzhou Kenna, said that this year, Connally's network will expand from 15 to 18, and Versace will rapidly develop from 11 stores to 4 stores.

Zhou Shaoxiong said that the huge consumption potential of China's luxury goods market is an important factor in the acquisition of seven wolves. "At this stage, the two digit growth of luxury consumption is only the BRICs, of which China is growing most rapidly. So the seven wolves are very optimistic about the prospect of acting luxury brand business. The future will not exclude further acquisitions of international brands. "

In fact, apart from the income from agency profits, Zhou Shaoxiong attached great importance to the main brand marketing effect brought by international luxury brand bundling. Nowadays, the geographical boundaries of the domestic and international markets have been gradually broken. Chinese clothing entrepreneurs have realized that if they are not familiar with the trend of the international market and the rules of the international market, their share in the domestic market will be difficult to keep. Therefore, we must first internationalize ourselves before we can better stabilize the domestic market and expand the international market. The acquisition of Hangzhou Kenna is the brand foundation for the seven wolves to move towards the international market.

"Acquisition of Hangzhou Kenna is of great significance. First, strengthen international brand cooperation; two, seven wolves create international luxury brands to enter the Chinese market agent platform, and the three is to offer seven wolves brand access to the international arena to provide opportunities for communication." Zhou Shaoxiong said, "through this cooperation, the seven wolves can provide more opportunities for Chinese consumers to contact with international luxury brands, and the seven wolves will also provide services for more international clothing brands to enter the Chinese market by virtue of their own capital advantages, channel advantages, resource advantages and management experience."

Domestic channel marketing

The acquisition of Hangzhou Kenna not only brought lucrative luxury agency revenue to the seven wolves, but also opened up the strategic space for the seven wolves to sell their products.

What Zhou Shaoxiong values is that the international brand represented by Kenna Hangzhou has a strong initiative in access to high-end department stores. This intangible resource is undoubtedly a great help for high-end wolves to build high-end brands. The Hangzhou Kenna revenue capsule provides a feasible channel for the implementation of the high-end strategy of the seven wolves.

Prior to that, Zhou Shaoxiong had been looking for opportunities to enter the international brand agency business since the listing of the seven wolves in 2004.

Since last year, the seven wolves completed the inventory expansion, and the expansion rate was quite fast. "But the expansion is still concentrated in franchised stores. The pressure in the department stores is relatively large, because the department stores have their own business decisions, or the brands that they want to enter are more from the first line brand. Therefore, entering the department stores is a challenge for national brands. Insiders said.

Channel is king's principle of clothing industry. Even seven wolves, Zhou Shaoxiong still felt pain for department stores. "A new brand wants to enter the shopping mall, so it's no use trying to find out how many people are looking for." Faced with the endless competition of brands, the brands such as the seven wolves also began to show the problem of aging and low added value. Some foreign brands began to drive Chinese low-end brands out of large department stores.

"But now there are channels for luxury brands to be readily available. Zhou Shaoxiong exposes seven wolves' advantages through acquisition.

After three years of transformation from 2008 to 2010, seven wolves are constantly innovating in channel construction. Zhou Shaoxiong told the China Commercial Daily reporter that for today's seven wolves, it is more robust and important to upgrade the market and channels blindly than expanding other products. Now put the research and development in the cabinet. When the time is right, push it again. " {page_break}

Zhou Shaoxiong really pays special attention to channel upgrading. He positioned the seven wolves in 2011 as "image integration and upgrading year", hoping to create new opportunities in terminal management and channel transformation.

At present, there are more than 3000 terminal outlets of the seven wolves, and the three logistics and information centers in Fujian, Beijing and Shanghai are set up nationwide. More than 20 provincial logistics and information departments, through the information network system, provide timely logistics distribution services and information exchange services to the sales outlets, and finally pass the products and values to the end customers through the terminal network.

In the existing sales terminals of the seven wolves, the proportion of Direct stores (commonly run by joint ventures or other cooperative ways) is 20 percent, and most of the others belong to franchisees.

Zhou Shaoxiong said: "from the perspective of brand upgrading and strengthening management, we should increase the proportion of direct outlets in the first tier cities in the future. After all, when managing franchisees, the management of shop assistants, clerks and goods is not direct enough. At the same time, we will increase the number of outlets and improve the franchisees of the two or three tier cities, and pass the standardized terminal management to the transmission of the seven wolves' brand philosophy and image.

Zhou Shaoxiong hopes that from 2011, the seven wolves will change from the parallel growth mode brought by the past stores to the vertical growth mode of single store sales increase, so as to cope with the pressure of rising labor costs, rising store rents and increasingly fierce competition in the industry.

In 2011, seven wolves will invest a lot of money in the transformation of channels. Future channels will maintain the growth of 10%-20% shops, but more capital and energy will be used for shop renovation, including increasing single store area and improving services.

Risks and challenges

However, the seven wolves also face risks and challenges.

At present, the world's first tier luxury brands have basically reclaimed the right to be represented in China, while the second tier luxury brands also show a trend of becoming a direct battalion. This means that the international brand dealership of Kenna is likely to be recovered in the future.

In this regard, Zhou Shaoxiong frankly said, "this is indeed our greatest risk, this situation is entirely possible."

Some analysts believe that agents can not become the main contribution to the company's profits. "This is the rule of the clothing industry. If we spend too much energy and do well in performance, the brand will probably take back the agent and do business on its own. Businesses must balance this. Ultimately, the company's goal is to expand its main brand.

However, while frankly speaking of risks, Zhou Shaoxiong insisted that "only a few companies in international brands must reclaim agents because of their own business structure, and the ability to direct operations is very strong. However, most companies feel that they have sent people to China to manage them too high, and because of cultural, economic and other differences, they do not understand the Chinese market, and they need to find agents in China. At this point, the key is whether you can create value for these brands, and how your management is concerned. There will be new brands coming out of the brand, and I would like to believe this. " Zhou Shaoxiong said. "What we need to do in this period is to build this platform, and we will further seek opportunities for agents to have more international brands, including acquisition opportunities."

"China's garment industry is developing from simple manufacturing to creative fashion industry." Zhou Shaoxiong said, "the impact of the financial crisis, the transformation and upgrading of economic development and the improvement of the national income level will bring about a revolutionary change in China's textile and garment industry."

Zhou Shaoxiong's ultimate goal is to build the seven wolves into an internationally famous brand, and turn the seven wolf company into a world-class garment enterprise. Though ambitious, he needs to face many challenges. "Management, talent and many other aspects need to be perfected. The designer team is not a problem, but there is still a need to improve design management." Zhou Shaoxiong said.

With the increasingly fierce competition in the domestic industry, more foreign brands are accelerating the expansion of the Chinese market and further advancing to the two or three tier market in China. In addition, rising costs will also be a long-term trend for seven wolves. Zhou Shaoxiong admits that the price of seven wolves will increase this year. "Raw materials, labor and so on are rising prices, products can not be no price increases, more than 10% of the increase will certainly be there." Zhou Shaoxiong said.

"We will not pursue low gross profit or pursue high margin." Zhou Shaoxiong said, "we want to reduce the middle cost through our service creation or the creation of supply chain. This is the future trend of men's clothing.