&Nbsp Has Developed Rapidly In China, Luxury Goods Paradise Has Become "Tail Cargo Inventory".

There is one on the North Road of Xiangjiang River in Chaoyang District, Beijing. Europe and America The town's architectural style of outlets business Street. In this town, there are fountains, squares, gourmet foods, and the most important thing is genuine goods. international Luxury is a big deal, and there are still discounts.

Every weekend, a parking lot with 1000 parking spaces is full of traffic. The horse's teeth outside the fence are full of twisting and twisting. Two years ago, even on weekends, the car in the parking lot in this town was also sparse.

Chen Junming travels to Seth outlets in the North Fifth Ring every week. Chen is the general manager of Seth group, and has been here for two years at weekends. Here, it is Chen Junming's happiest thing to see the young girls in the luxury sports car and the Amoy guests who come by subway to get what they want.

In fact, the project invested two years ago is a rare rich ore that Chen Junming found in recent years. Compared with the Seth shopping center managed by him, the growth rate of Seth orles is rapid, with annual growth rate of over 70%, and sales in 2012 are expected to exceed 2 billion yuan. It has been in operation for 21 years and has long been one of the top shopping centers in Beijing. The sales volume is 2 billion yuan last year.

Goods paradise and "luxury" inventory

Chen Junming's management is not a special case. In the past few years, the domestic market has been developing rapidly and widely sought after. In 2006, Swiss real estate dealer Seville. Takiy (Silvio Tarchini)'s Fox city company (Foxtown) and the Orient venture group in Songjiang, Shanghai to create the first foreign capital Oteri J. Immediately after that, Simon, a real estate operator of the largest American outlets, Japan Mitsui realty Co., and French retail giant ROSM group entered the Chinese market one after another.

The translation of English word Outlets by orris was first born in the United States, and has nearly 100 years of history. The oldest outlets are brand stores built around the factory for "handling tail cargo and breaking code products". Later, different brands gradually came together to form a large shopping mall similar to the Shopping Mall style.

After the 90s of last century, Americans carried forward this model. They build beautiful towns beside tens of kilometers or even hundreds of kilometers away from the downtown area, bringing together a large number of international first-line brands to attract consumers with "discount". According to statistics, the United States now has more than 300 large outlets, and Oteri J has become a retail form that can not be ignored outside chain supermarkets and department stores.

Today's outlets, in addition to cleaning up inventory, for some brands, there is a special "channel" function.

Luxury brands can lead the trend and eliminate the last season's fabric to make this season's products. Therefore, the extrusion of raw materials is also a great waste for them. For example, it is said that Armani will use the raw materials of last season to make some special products for otter Leicester. It is also an entry level brand Coach for luxury goods.

To enhance its performance, Coach has opened its flagship store in busy commercial centers of various cities, and has expanded its brand discount stores in a big way. In order not to damage the image of Coach, the products sold in discount stores are not the ones that are changed in the exclusive stores but are specially designed for discount stores. This is a decision made by Coach after rigorous analysis. They find that consumers who choose to shop at outlets and consumers in the price stores do not completely overlap. The special products for discount stores can create another market without damaging the original consumers.

The story of the rise of orlies is also being staged in China. In the foreseeable future, Oteri J will also become another important form of Retailing in China after supermarkets, department stores and shopping centers. And the rapid growth of the support of orlies is the rapidly rising middle class group in China and their huge potential demand for luxury goods.

A few years ago, the emergence of wealthy groups in China stimulated the luxury industry. China's rich became the main force of luxury goods sweeping around the world. Many consulting agencies such as McKinsey and Bain have predicted that China will soon surpass Japan to become the world's largest luxury market.

To cater to the huge appetite of this rapidly expanding consumer group, luxury brands are rapidly expanding their stores in China. At present, LV has 36 stores in 29 cities in China, but in 2005 it only entered 10 cities in China. Hermes has grown from 5 stores in 2005 to 20 stores today, a 4 fold increase. Gucci (micro-blog) expanded faster, and in 2006 there were only 6 stores, and now there are 39 stores. {page_break}

With the increase of stores, the sales of luxury brands are also rising. But at the same time, it brings another annoying problem. Stock, handbags are not bad. Consumers are not always so eager in the timeliness of handbags. But the more fashionable clothing and shoes are, the easier it is to become the past tense. In the past, luxury brands preferred to destroy products, and were unwilling to let their "noble" flow on the streets of the people to prevent their price system from being impacted. However, after the rise of outlets, luxury brands gradually found that this new channel that could provide a good shopping environment provided them with a good solution to inventory problems and would not damage their brand value.

China Opportunities

It was not until 2002 that otles came to China. At the end of that year, Yansha group opened China's first Oteri J in East Fourth Ring Road, Beijing. Since then, Oteri J's shopping channels have springing up everywhere. It is estimated that although there are about 400 shopping centers in China, which are called "outlets", there are only a few of them truly meet the characteristics of orter. In fact, these so-called "outlets", including early Yansha orlies, are not true "outlets".

At the beginning of its establishment, most of the brands sold by Je Ssha O Teles were mid-range brands, not many luxuries. The industry even said that the few luxuries, which were swept from otter, abroad, were just for "filling the door". It was not until December 2007 that after the official opening of the two phase of Yansha Ole, the international first-line brand was officially registered, and it also marked the mainstreaming of Yansha ole. However, most of the outlets in the country do not have the ability of attracting investment such as Yansha Ole, and can not attract good brands to enter.

Do not worry if anyone who has slightly defective exhibits or clothing that has been in season is willing to pay for it. In a report on the rising China consumer market released in April 2011, Mccarthy pointed out that there are 13 million upper middle class families in China (annual income of 100 thousand to 200 thousand yuan, which is equivalent to 15000~30000 dollars). Although they can only buy luxury goods occasionally, they occupy about 12% of the market share, and the number is increasing rapidly. McKinsey predicts that by 2015, 76 million households in China will enter this income range, accounting for 22% of the total consumption of luxury goods.

Compared with the middle class in the United States, the Chinese middle class is more young. They have received good education and believe that the future will be better. The recognition of the brand is no different from that of the international mature market. Therefore, they have certain requirements in their own circles. They prefer to wear a basic shirt of Zegna, rather than wearing the most popular brand of shirts with unknown brands. Of course, their purchasing power is relatively limited. Compared to CBD's flagship store, their main shopping methods are Taobao or their friends.

So, why is there no reason for orter to be their choice?

It is not just Chen Junming who sees the opportunity, but also the commercial real estate developer, Luan Yimei, has realized the great potential of Oteri J. In April 2011, the first oris, founded by China property developers, opened near the two airport of Beijing airport, and another small town was built. Almost the same period, RDM, a real estate company owned by Fingen group from Italy, opened its first store in Wuqing between Beijing and Tianjin. Fingen group is a famous European Orai operator. There are 17 large outlets in Europe.

For the future, both Chen Junming and Fingen are full of hope. According to Fingen, they will open 5 such ole in China in the next 5 years, and Chen Junming's store in Qingdao and Shenyang will also enter the opening countdown. According to the plan of the Seite group, the number of stores will reach 7 in 5 years.

Of course, in the rapid development of China, there are still some problems in the operation of the outlets in China.

First of all, investment is the most important part of operation. Whether a commercial project is a real sense of orlies is the key factor. Even the famous shopping group such as Yansha, its early outlets can not attract the attention of international brands, let alone those commercial real estate without foundation and resources.

Secondly, even if we can attract famous brands to enter, the supply of goods may still become the bottleneck of the future. After all, most brands only regard ole as a channel to clean up inventory.

Finally, although it is a discount store, the shopping experience provided by outlets is not "discounted". Chen Junming has made many useful attempts in Beijing's Xiangjiang North Road. Of course, a charging mode suitable for China's national conditions is very necessary.

Although there are worries about the future, at present, whether it is Yansha, Seth, these old shopping centers, or overseas professional orlies operators such as Fingen, and the developers who are looking for this market in China, they are still sketching the "spring day of China's Oteri J", the name of "consumption upgrading" in the world's largest market.