Wang Zhuo Interpretation: Cooperation Between Brands And Agents Wins OR?

Market rule is the criterion of division.

Recently, a lot of women's clothes were in trouble. brand ONLY and some of the agents' cancellation events have touched the eyes of the insiders, and once again become the focus of the future development of the brand agents. What did this incident say? We interviewed with this question. China Apparel Association Secretary general, Wang Zhuo, Secretary General of China clothing distribution retailers joint conference.

Reporter: Recently, there was a dispute between ONLY and agents. What stage do you think China's agent group is developing to?

Wang Zhuo: agents are internationally accepted rules. At present, China's agent group has become stable and mature with the improvement of its capabilities and operational strength. In the future, with the accumulation of agent funds, the accumulation of sales experience, the accumulation of brand resources and the accumulation of industrial resources, it will become more and more powerful. The influence of agents and the ability of market control will become stronger and stronger.

Reporter: does the dispute between women's clothing brand ONLY and agents indicate that the relationship between brands and agents has become fragile?

Wang Zhuo: this ONLY and part of the agents to terminate the cooperative relationship is a purely market-oriented behavior. With the increasing market coverage, brands begin to emphasize the effectiveness of storefront and enhance the efficiency of single store. In this process, there is a gap between agency stores and direct stores in terms of executive power, information feedback speed and brand understanding, which will lead to the cancellation of cooperation with agents.

Now is the time to stress shop quality and distribution quality. Marketing has entered an era of quality. Agents must pay attention to the accumulation of their abilities so that they can continue to face such market changes. The division of brands and agents is a normal market behavior.

Reporter: can it be seen that when the brand enters the new market, it needs the clothing agent to expand the market, and so on when the market is mature, it will withdraw the agency right?

Wang Zhuo: it can not be said that when the brand begins to enter the market, it will do the breadth of the market, the access system of agents will be relatively loose, and the quality of agents will be mixed. With the fierce competition in the market, the brand will enter the deep market competition. This is the main task to improve store efficiency and efficiency.

At present, most market competition has entered from breadth to depth. Brand is also constantly following the market innovation, change and upgrade. Agents can keep up with the spanformation of brand sales strategy, culture strategy and management strategy, and the two sides will continue to cooperate. If we can not keep pace with this step, we will break up, which is a very normal behavior in the process of market operation.

Reporter: do brands need agents to invest continuously in brands?

Wang Zhuo: the brand requires agents to invest mainly in learning, cultural understanding and personal quality, and is a devotion to brand business. Brand is not only an economic benefit for enterprises, but also a business. Whether this business can become an agent's business is also the foundation for their continued cooperation. Money is not the first element here.

Reporter: is it an inevitable trend for foreign brands to gradually withdraw their agency right after 2002?

Wang Zhuo: no brand ownership, this is the weak side of agents. Foreign brands recover the agency power to maximize profits. Of course, this also involves market coverage, involving brand cost accounting, which belongs to individual market individual analysis. Brand will analyze and evaluate the market, then make decisions. How to get the maximum profit at a smaller cost is the basis for the final decision of the brand.

Reporter: now many agents do their own brand and brand combination shop. What is the reason for this?

Wang Zhuo: agents will also find their own new development path in the course of their operation, such as financial strength, management ability, discourse power in the market and the assurance of brand. The cooperation between agents and branding partners is more about partnership, and they are compatible with each other and match each other. If agents want to keep up with the development of brands, the brand must also keep up with the accumulation of agents. This is a dynamic development relationship. Only matching can cooperate for a long time.

Reporter: will there be any change in the future cooperation between the two sides?

Wang Zhuo: in the future, cooperation between the two sides will become more and more equal, more and more just, and growth must be synchronized. Everything will follow the direction of market economy development. {page_break}

The way of Chinese brands for foreign brands

In the face of foreign brands' access to China, Chinese agents can be regarded as "the founding fathers." they also had the biggest permissions of brand management as "Princes", and as time went on, more and more foreign brands began to "sell", and Chinese agents gradually withdrew from the market they laid down.

Agents open up new territories for foreign brands.

In the early 90s of last century, with the rapid development of China's economy, foreign brands began to enter the Chinese market gradually. However, because of the internal and external factors such as macro policy and market access, foreign brands are watching the huge cake in the Chinese market, but it is hard to swallow it.

At that time, international brands eager to open up the Chinese market tried to find agents in the mainland market. At that time, Chinese consumers' awareness of international brands was not as large as they are today. Most brands are still unfamiliar to Chinese consumers. The risk of brand directly "killing" into the Chinese market is huge. Agents who are familiar with the operation of Chinese market have become the best partners.

The process of international brand entry into China can be divided into 3 stages.

The first batch of brands entering China is not the most famous in the world, but they first locked the target in China. In the late 1970s and early 80s, international brands including crocodiles, Montagut and golden fox appeared in China's large shopping malls, and Chinese people began to understand foreign clothing brands. Mr. Pierre Cardin can be said to be the first international top designer to enter the Chinese market.

In the mid 1990s, more and more international fashion brands began to focus on China. Dunhill (Dunhill), YSL (Saint Laurent), LV (LV), CHANEL (Chanel), PRADA (Prada), FENDI (Fendi), Cartier (MONTBLANC), MONTBLANC and other luxury brands also came to China to dig gold.

During this period, all international brands took the form of dealers in Japan, Korea, Thailand and Singapore, and used these dealers who knew international brands, knew brand management, and became familiar with Chinese culture to develop the Chinese market.

With the development of China's economy and the increasing demand of Chinese luxury brands, these companies have begun to abandon the springboard and choose to enter China directly. For example, Ermenegildo Zegna (Zegna) cancelled its agent from 2004 and set up a branch in China. LV also cancelled the agency and operated directly through the company.

Between the end of 1990s and 2000, another group of brands began to march into China. This is the fast fashion consumer oriented brand for the masses. ESPRIT can be said to be a representative of such brands. The brand from the United States has been popular among young people in mainland China, and has achieved good sales results in Hongkong, China. However, with the rise of China's independent brands and the development of personalized consumption demand, its influence has weakened. In recent two years, MANGO, ZARA, H&M and other fast fashion and luxury luxury brands also began to test China.

Analyzing several stages of international brand entering China, it is found that when the brand is unable to manage or unwilling to operate at risk, it will adopt the agent system of the import total distributor, so that the agent can develop the market for the manufacturer. The agent at that time not only has the function of the distributor, but also shoulders the responsibility of brand promotion and channel sales, which requires a lot of manpower, material resources and financial resources. At that time, the agents really invested a lot in the development of the brand.

"For foreign clothing brands, early entry into the Chinese market relies on agents as expedient measures." A Chinese brand agent of the US leisure brand said: "before 2004, there were many restrictions in China's market regulations, and the market prospect was uncertain. Therefore, most foreign brands hope to pass on risks. Finding a Chinese agent is the best way to pass on risks. This is very small for foreign brands, almost zero, and these agents are more familiar with the Chinese market, and some already have ready sales channels. "

So, naturally, international brands began to look for Chinese local enterprises to act as agents, while Chinese enterprises hoped to improve themselves through international efforts.

The honeymoon period gradually disappeared in 2009.

Agents are gradually being replaced by direct operations.

The recall of foreign brands is not only a phenomenon in the apparel industry, but also a common phenomenon in other industries.

"Bloody men want to have a Land Rover." Song Siming, the hero of the humble abode, has attracted many men to be fascinated by the luxury brand of Land Rover. However, the spanformation of the Land Rover brand in the Chinese market is taking place quietly.

In the early days of entering the Chinese market, Jaguar Land Rover has developed four agents in China, such as Huitong Lu Hua, China automobile southern, Shanghai World Trade and Dalian honor and glory, which have independent Jaguar Land Rover products import rights, parts allocation rights and brand promotion rights. It is understood that since its entry into the Chinese market in 2003, Land Rover's luxury SUV brand has been directly ordered from headquarters at home by several major agents in China, and then distributed to the distributor's operation mode to carry out sales work, which has made very evident achievements in market development and sales.

Jaguar and Land Rover brands have been declining in different markets in Europe and the United States since they were acquired by Tata Group in 2008. Only in the Chinese market has maintained growth, the Chinese market has grown into the third largest brand of Land Rover brand in the world. The importance of Land Rover is self-evident.

However, good market performance has led Land Rover's original regional agent mode to be regarded as a hindrance to the further development of the brand. The problem is that the brand influence is not enough, the price is not uniform, the supply of parts and components can not be coordinated, and the independent dealers are subject to agents, etc., all of which are attributed to the original regional agency mode. In 2010, Jaguar Land Rover recovered the agency's power through the establishment of a Chinese sales company.

It was not only China's agents who had been seized by proxy. In 2011, the luxury brand Coach, headquartered in New York, withdrew its agent in Singapore and Malaysia at the beginning of the year, instead of being operated directly by the company. Victor Luis, President of Coach international retail business, said that the resumption of business was based on the consideration of accelerating development.

Coach entered China through agents in 1998. In September 2008, Coach recovered its retail business in Hongkong and Macao from its dealer Junsi group, completed the first phase of the buyback plan, and withdrew its agent in mainland China in April 2009. Victor Luis revealed that the choice of the right to recall was due to a huge opportunity for China. Coach then launched a massive investment in China, and now it has begun to expand to the two or three tier cities.

The fiscal year of Coach is from July to the end of June next year. Victor Luis revealed that in the first year of the recall, Coach's sales in China amounted to 50 million US dollars, or about 350 million yuan. This year, Coach's sales in China will reach $175 million. Coach hopes to increase this figure to US $500 million in fiscal year 2014.

In fact, the rapid growth of China's market does not bear the expectations of foreign brands. In order to fully control the sales profits in China, more and more international brands are eager to get rid of Chinese agents. {page_break}

Some brands' outlets have even thrown aside the original discount rules to put agents on the edge. According to the original practice, new products are only allowed to discount after 3 months of listing. Now it is on sale for a month, and then they enter the outlet (brand discount store) channel directly. "In the past, outlet could only sell products two or three quarters ago, and many of them were last year's products, and now even season merchandise can be obtained." Guangzhou Tianhe City Department Store Huambo Lai Lai brand discount shop weekly manager said.

According to an agent, under the current interest pattern, brand dealers often use the capital injection of agents to complete the sales channel construction and the expansion of the Chinese market and the establishment of brand influence. At the same time, the original excess capacity is effectively released after the market has been released; and the Chinese agents who bring in capital are often rashly cooperating at the very beginning. After a few years' sales channels have been completed, they can get the compensation and leave the people, unable to "share indefinitely".

Alliance of domestic brands and agents

In the face of domestic brands, agents do not seem to enjoy the "lifelong system" care. They also get "very hurt" after the rush. And the brand is also a face of innocence and no resistance, in fact, in front of the interests of who is right or wrong.

The agent was injured.

In the initial development years of clothing industry, agents are indispensable to the brand business. The relationship between the two can even be described by the relationship between "founding a country hero" and "new king".

Because, once upon a time, the clothing agents set up a huge regional market network and effective sales mode for those brands that just set sail, and expanded and enriched their "territory" and "silver warehouse" step by step.

But in business, after all, the relationship between the two sides is built on the basis of acquiring their respective interests as the first criterion. Therefore, in a certain period of time, contradictions inevitably arise. Especially when the wings of the brand become more and more plentiful, the agency's initial effort may be gradually forgotten, just like many of the founding fathers of the past dynasties, and finally they can barely retreat.

Especially in recent years, some brands are developing more and more fiercely, and the demand for their brand image and overall profits is getting higher and higher. Some agents or subjective reasons or objective factors prevent them from catching up with the brand's rhythm in time, resulting in an endless stream of "agents being hurt".

Some people have classified the injuries of agents as follows:

Deliberate and difficult. When an agent takes over the sales of a brand dealer in a certain area and becomes a regional general agent, he has worked hard to open up the market with less than half a load and several years. After being recognized by the brand, it has not lasted for a long time. The brand business has begun to increase its sales volume year by year, and the number of orders has been greatly increased. As a result, conflicts between the two sides will threaten the brand, and even unilaterally break the contract.

Destroy the bridge. When the agent completes the local sales channel, the brand business will terminate without any reason even if it fails to expire. Branding is to see agents eager to make money "soft rib", sign "overlord clause", such as agency contract 3 months, a sign.

Deceive the fool by deceiving the truth. This is a rather bad method. Some of the clothing displayed at the ordering meeting are high-end, fine workmanship and fashionable. But after signing the contract, the brands and samples are quite different. The fabric is low-grade, rough and old, and the agent can't sell the goods after receiving the goods. But because the agents can not get the proof that the quality of the sample clothes and goods are not uniform, the brand dealers refuse to return the goods and compensate them.

Buy strong and sell strong. There are also some brand dealers' requirements for agents: "orders must reach a certain limit, otherwise they will not be allocated and not returned." For example, a brand dealer requires that the order quantity of an agent must reach the lower limit specified by himself. If the agent fails to reach the line, he will not deliver the goods, and if he takes the goods away from the brand dealer, he will not bring it back again.

All of the above have made the agents who have made great contributions to brand businesses feel sad. Agents encounter not only mental attacks, but also material losses.

Brands are also aggrieved.

Everything is divided into two parts. When we see the contradictory side, we should also look at the other side of the contradiction. In fact, as brands, there are many untold difficulties, and many times they feel wronged.

Many brands complain that agents have taken away most of the profits they made, and they have become "gowns" for agents. For example, if a single profit is not high enough to be sold to an agent, the brand will get a profit of only a few dozen dollars from the item, but if it is a brand operator, the profit of the same garment will reach about 10 times.

Apart from the fact that profit is separated from the brand by the agent, the brand is also afraid of losing control of the market. He Junfeng, the chief marketing consultant of marketing planning, believes that at present, some agents are acting multiple brands at the same time. They do not put eggs in one basket. They are coercion, contend with manufacturers, ask for greater preferential policies and so on. Disobedient, not easy to control, many manufacturers to terminal store concessions, directly digested by agents, clothing enterprises can not control the market.

What worries most brands is that their brand image has been damaged. Because many agents are "traders" origin, "buy and sell" is better, but the company's management and brand image maintenance may not be familiar, or not necessarily so, after all, the brand is not its own.

At the same time, the continuous changes and developments of the external environment and situation are the reasons why many brands decide to abandon their agents. With the development of the garment industry and the continuous innovation of business models, diversification of channels has become a major trend in the garment industry. The idea of flat and strengthened outlets has gradually been recognized and sought after. Some new channel models are developing more and more fiercely. The most important point is that brands get all the benefits they can't get from agents.

The essence of business activities is profit seeking. As Cui Hongbo, senior partner of Lian Zhi Da, said, most brands will take the form of franchisee in the early development of the market, so as to take advantage of the funds of franchisees to get rapid expansion. But after the maturity of the brand, the company will often take the agency power into account in order to take into account the brand image upgrading, the overall strategic layout of the company, and the problems of general franchisee's lack of motivation to shop and management to keep up with brand development. {page_break}

How brands and agents face the future

In the face of huge market interests, brand dealers and agents seem to have difficulty in developing independently from each other. Therefore, solidarity, cooperation and mutual benefit should remain the current direction of development.

Although the relationship between the two agents and brands has gone from the initial interdependence and fraternal relationship to the present conflict and complaining each other, but looking forward to the future, based on the "no permanent enemy, only permanent interest", which is equally applicable to the business field, the two can not split up as long as there is interest relationship. In the future, we must rely on agents and branding providers to support each other and work together.

Li Jianguo, President of ASIC EDTIONS international trade group, analyzed the relationship between the two in an interview: "brand dealers and agents should be coexisting and win-win cooperation. With more and better agents, we can make the brand bigger and the brand benefit better. Similarly, the better brand benefits, the more consumers can attract, the more profit they can bring to agents. Therefore, agents and brands should not be hostile, but should be mutually beneficial.

Since the premise is clear - cooperation. In the process of cooperation, the weight sharing and interest protection of their respective resources should be the core issue of the two party's tacit understanding. But this is a problem of circular games. If interest is not guaranteed, it will affect the enthusiasm of resources input, and the degree of resource input will in turn affect the protection of interests. It is precisely because there is no one can accept both sides of the "input income guarantee system", so that the dispute between the two sides.

Can agents and brands change their way of thinking and abandon selfish ideas of maximizing individual interests and face the maximization of overall interests?

If we want to maximize the overall interests, we must first consider the strategic unity of the two sides and plan the regional development objectively and objectively. Secondly, we should effectively link the resources between the two sides and share the resources scientifically.

In fact, there are very few two identical regional markets. Each region will be different because of the agent's concept, ability, resources and regional economic characteristics, business circle distribution, competition pattern, development history and so on. Different regions need different strategic steps, rather than "one size fits all" policies that can promote the development of all regions. Therefore, branding should be pragmatic and targeted in supporting business agents and resources.

For China's clothing market, there will be more powerful agency dealers in the future. This part of the agent will control the most advantageous areas and pavements, and even control the largest and most capable dealers in the second tier market. Under such circumstances, no matter what brand wants to enter the market, it is impossible to break away from their channels.

Moreover, the department stores of new world, Parkson and other department stores have 100 stores in China and dozens of them. When they become a main channel for fashion products in China, any brand will have to choose them if they want to enter the terminal channel of the market. The "trust" group of this channel is being formed, which will have a far-reaching impact on the channel pattern of Chinese apparel enterprises.

Therefore, the channels of China's apparel industry are undergoing a great spanformation from traditional channels to diversified channels. Every brand dealer and distributor need to be able to see this trend and seize the opportunity of the channel and strive for greater development.

On the other hand, on the basis of targeted assistance from the brand, agents should also respond positively, from the organizational setup and business mode to the brand dealers and franchisees.

Dr. Wang Xiangsheng, President of the IFB international fashion brand development management center, once had a figurative metaphor for the relationship between the two. "The relationship between brand dealers and agents is similar to that between men and women in love. When they first started dating, they definitely appreciated each other before they got married. They only saw the benefits of each other. The second stage is just marriage, honeymoon period, the feeling is also very beautiful. There are several possibilities for the development of the third stage. The first is that we can understand each other better and live together. The second is that one of them has changed, find another lover (agent), or there are third kinds of people who have broken up because they do not cooperate with each other.

Only two of them can think of one thing, and one can make concerted efforts to achieve their goals, so as to achieve common development and become an enviable "lover".

Event playback

In July 18, 2011, more than 20 ONLY brand agents and store employees arrived at the World Trade Center's bestseller fashion limited. The Danish fashion company suddenly decided to take back the agent of the ONLY brand in Hunan. Several agents in Hunan were not satisfied with the Dong Jia fashion company.

Bestseller fashion company, which belongs to the Danish best seller company, is a family enterprise founded in 1975. Now it has four sub brands in China, namely, ONLY, VERO MODA, JACK&JONES and SelectED. According to incomplete statistics, the four brands have developed to more than 3000 stores before entering China in 1996, with sales of up to ten billion yuan. Such rapid development relies on the way of agents to join, opening up the market quickly in China's two or three tier cities, covering nearly half of the country's cities above the county level. But at present, the company is reforming the operation channel of the company, that is, reclaiming some franchisee's agency power and changing it into a company's direct shop. This undoubtedly robbed the agent's rice bowl, especially when the agents had just joined two years, and the sunk cost had not been collected yet, which caused the Hunan agent to go to Beijing collectively for argument.

A ONLY agent in Hunan said that the agency's right of acting for three months was quite strong compared with other companies, but there was no problem in the previous two years. But in the third years when it began to make profits, a fax from the seller in June abolished their agency right. It was equivalent to the first two years. The most important thing was that in May, the agents had ordered 10 months for the goods, so the agents thought it was not too much to ask for compensation.

But there are quite different opinions from the customers. According to media reports, the general manager of the company said that the cancellation of the dealership of these stores is because there are many deficiencies in these stores, which have affected the brand image of ONLY, and the agent's claim for compensation of 13 million yuan is unreasonable.

Disputes between agents and Brand Company are common in recent years. Most people in the industry say that most brands will take the form of franchisee in the early stage of opening up the market, so as to take advantage of the funds of franchisees to get rapid expansion. But after the maturity of the brand, the company will often recover the agency power in order to take into account the brand image promotion, the overall strategic layout of the company, and the problems of general franchised stores having insufficient power to shop and management to keep up with brand development. But agents also have a sad side, the market that has been laboriously nurtured, and the Brand Company says it will take away. So the most important thing is the contract. The rules of the game are signed by both sides. They are binding on both sides. For agents, there is a reasonable assessment of potential risks before signing contracts, otherwise it will be easy to conflict with manufacturers.