Clothing Reverse Price Increases &Nbsp; Industry Is Facing A Shuffle?

Sports brand collective price increase

From the end of last year to the beginning of this year, sports brand launched a wave of price rise.

Recently, the second round of price rises and hustle and bustle.

From the fourth quarter of the sports brand, the sports brand still has an average of two digit increase.

Li Ning Co announced ahead of schedule that the price of shoes will increase by 7.8% in the fourth quarter and that clothing will increase by 17.9%.

In the same way, Anta, XTEP, PEAK and 31st degree are selling up at the end of year market.

Among them, the situation of 360 degrees is close to Lining's.

According to the XTEP winter orders, the order increased by 27% compared with the previous order, while footwear and clothing prices rose by 10% and 17% respectively.

When Anta announced the first time this year to raise the price of its products, Anta chairman Ding Shizhong once said, "the annual growth rate is expected to be no more than 10%".

When the order was released in the fourth quarter of 2011, Anta concealed the specific figures, only saying that the average selling price of sports shoes and clothing was double digit increase compared with the same period last year.

For this price increase, the industry said that when the first price increase, the product is spring and summer clothing, its product price base is low, consumers feel unobvious.

The price of winter clothing is more expensive, the increase is more than two digits, reflecting the terminal will be very obvious.

Luxury goods rise again

In recent years, the major brands have been raising the price of luxury goods and high-end consumer goods.

This rising price is dominated by high-end cosmetics Estee Lauder.

It is understood that some products including Estee Lauder, Clinique and other brands have increased their price from 5% to 8% since July 1st.

At the same time, Cartire, Rolex and LV, PRADA and other luxury brands also added to the price list.

This is also the second price increase of luxury brands this year.

At the beginning of the year, luxury products including LV, Chanel and Hermes have already raised some of their products.

This time, more brands including high-end cosmetics, leather goods and watches have been priced.

Estee Lauder insiders said that the price adjustment is not a global price increase behavior of the company's products. Different countries will adjust according to the local market situation, but it is unclear whether other countries have recently raised their prices.

According to the introduction, the pricing decision of luxury goods and high-end consumer goods is not only considering the consistency of all market prices, but will be priced according to different markets.

If LV has a price adjustment system based on different markets, Burberry also has a global pricing framework. In ensuring that the overall profit target can be achieved ultimately, all regions can give advice on the final pricing based on the benchmark assessment.

Half a month ago, the Ministry of Commerce announced that it would cut tariffs on high-end consumer goods to reduce the sharp spread of such products at home and abroad.

In 2010, the scale of overseas purchasing market based on cosmetics and luxury goods reached 12 billion yuan.

At present, when most of the international high-end consumer brands have landed in China, a large number of consumers also take the "shopping list" to the airport duty-free shops, Hongkong, China or Europe and the United States to buy.

The direct reason behind this is that the domestic price of the same commodity is obviously higher than that of foreign countries.

The Ministry of Commerce has made a statistics. 20 kinds of high-end consumer goods, such as watches, bags, clothing, wine and electronic products, are priced at 45% higher than the mainland of Hongkong, 45% higher than the United States, 51% higher than the United States, and 72% higher than France's.

The high import tax rate is one of the main reasons for the spread of high-end consumer goods at home and abroad.

Take cosmetics as an example, the import link should pay 30% of consumption tax, 17% of value-added tax and 10% of customs duties.

Therefore, the Ministry of Commerce announced that it would lower the tariffs on high-end commodities, including cosmetics and high-end tobacco and wine varieties. In the view of the industry, the intention of the government to lower taxes is to reduce consumption at home by narrowing the price gap at home and abroad.

Spread of inflation

In June, the national consumer price level rose 6.4% year-on-year, a record high in 3 years.

Clothing prices rose by 2.1% over the same period last year.

Among them, clothing prices rose 2.3%, shoes prices rose 0.5%.

In shopping malls, thousands of T-shirts and dresses can be seen everywhere, indicating that high prices and severe discounts have become a marketing method that both shopping malls and brands agree.

The discount is certain, after the price increases, the same discount will be paid to the ordinary people.

Even the cheap fashion brands, such as UNIQLO, bought 99 pairs of pants last year, and the cheapest one this year will cost 149 yuan, or nearly 50%.

In Nanjing, such as Kowloon and other foreign trade malls, the brand scissors T-shirt also exceeded 50 yuan, while last year, 30 yuan was almost enough.

Wang Baokui owns his own brand tengguan shirt, which is mainly sold through supermarkets.

A shirt cost about 20 yuan is priced at about 120-130 yuan in the supermarket.

Compared with last year, the price of shirts per year increased by around 15 yuan, or around 15%.

But when it comes to profits, he says it's barely around 6%.

"Our brand clothing has also adjusted the price. According to the different varieties, the unit price increase is about 10-20%.

To be honest, hard price increases are well known, but for brand clothing, it can be digested by internal management. The fundamental reason for the rise is that everyone has gone up. We have to maintain the image of the brand and give an account to the shopping malls, so we follow suit. "A brand manager who did not want to be named said.

His brand clothing is selling well at present, positioning fashion and leisure, price is in the middle, brand development is in the rising channel.

Reasons for rising prices

Speaking of reasons for increasing prices, it is also very sufficient. Raw materials, energy, logistics and labor costs are all rising.

For some low priced clothing, rising costs will certainly drive up prices.

In Wang Baokui's view, the rise in labor prices is an important factor in pushing up production costs.

Following last year's announcement by many provinces and municipalities to raise the minimum wage standard, the employment cost of ordinary enterprises has increased rapidly this year.

Taking Hangzhou as an example, after the new adjustment in April 1st, the monthly minimum wage rose from 1100 yuan / month last year to 1310 yuan / month, raising 210 yuan, or nearly 20%.

Fang Changjun, general manager of Hangzhou Ben Xin garment company, began to stock up the autumn and winter down garments.

The labor price is 65-120 yuan / piece this year, while the average level last year was 45-80 yuan / piece.

The cost of a down jacket with a price tag of 1000 yuan is around 300 yuan. According to this calculation, the labor cost accounts for about 1/3 of the total cost.

In addition, there is also the cost of raw materials and logistics, and the rise of hard prices, making the basic price increase of low price garments inevitable.

However, just as cost is never the real reason for the rise of luxury goods, the mere rise in cost is not the exact reason for rising prices for brand clothes.

Generally speaking, product price = production cost + R & D cost + marketing expenses + sales cost + management fee + exchange gains and losses + reasonable profit + brand premium.

For luxury goods, the reason for its rise is more to maintain the fundamental attribute of high price, which is also the spiritual value of luxury goods.

"The price increases are in line with the brand strategy of high-end consumer goods. These brands need to maintain a continuous climb in price to ensure their high end, while the slow price will be eliminated by the market," said Gao Jianfeng, managing director of Boge consulting.

Cai Sujian, chief executive of China Luxury Goods Association, also believes that in the face of China's rising household consumption power, high-end consumer goods enterprises need to maintain their brand's high-end positioning through regular annual price increases, and "low price brands will become mass consumer goods".

This is the reason for the price rise of luxury brands.

In fact, there are also reasons for the rise in price of some brand clothing.

Generally speaking, the brand clothing which operates normally has about 30% gross profit, and the rise of cost has a great influence to a certain extent.

However, brand clothing has its own position, and has its own position in the price division of the clothing industry such as the cloud. In order to maintain such a position, following the price increases becomes the choice of these brands.

"Other brands have gone up in price. If we do not go up in the past, it will lead to misunderstanding. We believe that we will economize on the use of raw materials, so that we will lose consumers who have become brand audiences."

Continuous high in pmission

As mentioned above, a price tag of 120 yuan will cost more than 20 yuan, and the price down of 1000 yuan will be 300 yuan.

The price of clothing is far from the market price, which is well known. And the links that push up the final price are also an old topic.

The operation system of the joint operation of the shopping mall makes the clothing brand have to consider the demand of the shopping mall, and the rising price is inevitable.

In addition, the multi-storey agent system that has been formed over the years has also brought a garment from the factory to the counter, which has experienced multiple agency sales links, and the gross profit increase in each link is currently around 15%.

Regional agents also have to bear the pressure of inventory, plus the deduction and promotion costs of shopping malls, and may enter the retail terminal after the price increases themselves.

"From the perspective of asymmetric business relationship, shopping malls are the ultimate winners.

Shopping malls often hold promotional and discount activities. All these discounts need to be paid by brands, not higher prices, and profits will be directly affected.

At present, the price increases by about 30%, "said a woman dress shop manager who works in a shopping mall.

In this way, a shirt that has gone out of the factory for only 30 yuan has been pferred to the provincial agent. It may have turned into 40 yuan, and the price has risen to 60 yuan when the agent is sent to the municipal level.

However, at what price they will be bought by consumers, it depends on the final retail terminal of these garments.

According to the industry, the increase in price is ultimately decided by brand awareness: "the general brand may increase its price by about 5 times (i.e., the price is 6), and the famous brand can even reach 10 times, and the international top brands are more than tens of times.

In addition, different retail terminals will also affect the rate of increase, for example, the retail price of general community stores is lower than that of downtown stores.

Price rises and volume rises?

According to the statistics of the China National Business Information Center, the volume of retail sales of all kinds of clothing in the first half of 2011 has increased by 6.86% over the first half of the year, which is 6.81 percentage points lower than that of the same period last year.

5-6 of them continued to grow at low speeds over the same period of two months. The growth rate was only 0.86% and 1.23%, which was 15.53 and 14.24 percentage points lower than the same period of the previous year.

It is important that although the year-on-year increase in clothing retail sales is basically equal to the same period in the previous year, the increase in retail sales is mainly the contribution of the average price increase from the structural contribution.

Recently, the first half of the year, sales and profits retrogression Lining, the announcement of the price rise has been widely questioned, the key question is whether the price increases help them to increase sales volume, consumers should continue to improve sales pay?

"Clothing is not like food, it must be bought every day, the price is higher, it is less to buy, or to browse the Internet." this is the most widely heard statement. In some shopping malls without activities, the consumers of shops are scarce.

Although some salesmen are reluctant to disclose specific figures, their helpless expression and the statement of "more effort to sell" illustrate the difficulty of increasing sales.

Ma Gang, a famous sports brand observer, believes that a new round of price increases will only do more harm than good.

The reason is that many domestic sports brands are targeted at the middle class, and these people are more sensitive to price movements.

While raising the price of domestic brands collectively, some middle and low-grade markets are also sold.

The result of price increase undoubtedly increases the difficulty of marketing.

On the one hand, the brand will follow the inflation to stabilize or enhance the brand grade by raising the price. At the same time, because of inflation, consumption will drop, and we need to increase sales promotion efforts to expand sales.

This is a contradiction. It is true that the price increase is not a matter of brand, but it is a matter of consumers if the volume increases.

Of course, when the equivalent does not increase, the price increase can also maintain the interests of the brand, and the brand in the rising period will gain greater profits.

However, how can we continue to win the trust of consumers in this period of inflation and maintain loyalty to the brand? Can we simply increase the price of inertia?