Clothing Industry: How To Raise Prices? &Nbsp; Low Value Brands Are Hard To Bear.

Pit father

Spring is coming, and the heavy winter clothes on the models of the clothing counters in the department stores have been replaced by light and bright ones.

Reporters visited the shopping malls in Beijing, found that this spring's new clothing brands, such as ONLY, Vero Moda, E-LAND, and so on, their knitted sweater, small suit is basically not less than 600 yuan, t shirt not less than 300 yuan.

A brand of a long boots, after seventy percent off more than 800 yuan.

In most stores in Kunming, children's clothing prices generally increase by about 20% compared with last year.

In Daguan children's village and dun Kang infant supplies shop, children's clothing also took part in promotional activities in the mall.

For example, the domestic brand "Yu Nuo Qian Jin" is suitable for 6 month old children to wear thickened conjoined clothes. After playing 20 percent off, the price is 150 yuan, while the price before the festival is less than 120 yuan.

The same size of "Qibao" thickened conjoined clothes, the price after 15% off is 168 yuan, the price was 145 yuan a year ago.

In the international brand area, the brand "Rabbi" also has 10 percent off concessions, the original price of 6 months old children's conjoined clothes is 259 yuan, the current price is 230 yuan, and the "Ha Babby" same size conjoined dress is priced at 218 yuan after 10 percent off.

Gift boxes for baby garments are more obvious. Domestic brands are about 120 yuan before the festival. Now the price is around 150 yuan. The international famous brand boxed baby clothes are priced at about 280 yuan to 300 yuan before the festival, and the price rises to 330 yuan to 350 yuan after the festival.

According to the sales staff of Dun Kang baby products store, the design cost, cutting, processing, marketing, pportation and other costs of children's clothing are equivalent to that of adult clothing.

It aims at a relatively narrow consumer group, with a small scale of production and a high cost.

In addition, cotton prices rose at the beginning of the year, and children's clothes were basically 100 percent cotton, and prices would follow suit.

In Heze, Shandong, according to a survey of sales of goods in spring this year, the price of spring clothes is generally higher than that of the same period last year.

Statistics show that in February 21st, the average price of men's clothing in Maui department store in Heze averaged 938 yuan, up 17% over the same period last year.

Women's wear was 1699 yuan, up 15% over the same period.

For example, the price of the Spring Festival dress is 359 yuan per piece, up 12% compared to the same period. The price of the Spring Festival is 1899 yuan per piece, up 15% over the same period.

According to the Ginza mall operation Department, this winter and spring clothing overall rose by about 20%.

The change of consumer prices in January 2012 released by the National Bureau of statistics showed that clothing prices rose by 3.3% over the same period last year.

Among them, clothing prices rose 3.4%, footwear prices rose 2.8%.

The survey confirms that consumers believe that the general increase in clothing prices is not a unilateral feeling.

In fact, not only is the price of new clothes rising just now this spring, but in fact, since last year, the price surge of clothing has already struck.

Wang Yong, vice president of Chaotianmen Chongqing clothing association, said that the wholesale price of winter clothing in Chongqing rose by about 10% in 2011.

According to a booth owner of the wholesale market in Chaotianmen, an ordinary men's cotton plaid shirt at the booth sold for about 80 yuan last year, and 100 yuan this year. The cotton coat with wool collar is generally 250 yuan, up 50 yuan from last year's starting price.

The gross price of the sweater is 150 yuan to 200 yuan.

Although there are bustling people in the market, they buy less.

Some merchants from suburban counties buy goods at wholesalers, but the quantity of goods they receive is much less than before.

The staff of the "fashion pioneer" shop specializing in children's wear and fashion, said: "recently, the goods have gone up by more than 10 yuan per piece. When they are good, they sell only a few pieces a day, and sometimes they can't sell one day."

Chongqing Junxiang Clothing Co., Ltd. sells wholesale leather clothing and casual wear at Chaotianmen Heng bin shopping mall.

Pei Guoyun, chairman of the company, said: "since 2011, the purchase price has risen by 10% to 20%, and the market in Chongqing is hard to digest, so the business is not very good.

The goods were sent out, but they could not be paid back, and the debts amounted to hundreds of thousands of yuan.

Let's take a look at the price of clothing in Yantai, Shandong.

According to the statistics released by the Yantai investigation team of the National Bureau of statistics, in November 2011, the price of clothing in Yantai increased by 5.8%, up 6.9% compared with the same period last year, and the price of clothing was higher than that of last month and higher than that of the same period last year.

According to statistics, in all kinds of clothing prices, children's clothing ring price index rose 12.9%, or significantly higher than men's and women's clothing.

For men's wear, the price of men's clothing in Yantai increased by 2.8% in November.

Among them, the price of the down garment loop is up to 11.1%.

From the changes in consumer prices that had been released by the National Bureau of statistics, the price of clothing rose by 3.7% in October 2011, of which the price of clothing rose by 4% and the price of shoes rose by 2.5%.

In November, clothing prices rose by 3.5%, of which clothing prices rose by 3.6% and shoe prices rose by 2.7%.

Clothing prices rose by 3.8% over the same period in December.

Among them, clothing prices rose 3.9%, shoes prices rose 3.1%.

It is worth mentioning that in 2011, because of the obvious rise in clothing prices, it had a certain impact on clothing sales.

According to the data from the China National Business Information Center, the number of retail sales and retail sales of all the major retail enterprises in China dropped in 2011.

The China national business information center points out that the actual purchasing power of residents has declined in the overall environment of rising prices, and the rise of brand clothing prices in 2011 has further reduced the consumption space of residents for clothing, making the annual growth rate of clothing sales of large retail enterprises showing a sharp downward trend.

According to statistics, in 2011, the number of clothing retail sales of all the major retail enterprises in the country increased by 20.39%, a decrease of 2.24 percentage points compared with the previous year, while the growth rate of clothing retail sales was only 4.88%, less than half that of the previous year.

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Perspective price increase

Faced with the high price of clothing, many consumers said that they could not afford it, preferring to fight for more extensive online shopping.

So what has pushed up the price of clothing?

In fact, under the pressure of raw material prices, labor costs, RMB appreciation and other factors, the price increase of garments as labor-intensive products can not be avoided.

Industry experts have said that in the traditional garment manufacturing cost structure, raw material costs accounted for 60% - 75%, processing and manufacturing costs accounted for only about 25%.

The reality is that both raw material costs and processing costs are rising.

The rigid rise of manufacturing cost is bound to pass through the next link, directly facing the clothing of terminal consumers, and it will lose money without price increase.

An important reason for the rising cost of materials is the rise in the prices of chemical fiber materials. In recent years, international oil prices have continued to rise. The rapid development of China's economy and the strategic upgrading of the country's crude oil have led to a substantial increase in oil prices, which directly leads to a marked increase in the cost of raw materials in the apparel industry.

Cotton prices used to be like "roller coaster" ups and downs.

By October 2011, cotton prices had fallen by more than 30%, but the price of autumn and winter clothing did not decrease.

Why is that?

In the final analysis, it still depends on cotton.

Although cotton prices have been down all the way since last March, the longer the industry chain is, the longer the production cycle is needed. For example, the fashion trend is released 6 months ahead of schedule, and the fabric trend is released 12 months ahead of schedule. This requires enterprises to make a prediction for a relatively long future and supply the downstream products through the production inventory mode.

Therefore, autumn and winter clothing began to start in the early spring and summer or earlier. According to the cotton price at that time, the garments produced were bound to rise in price.

According to the insiders, many textile and garment enterprises are in the stage of de stocking. The main reason is that cotton prices have risen sharply in 2010, cotton mills have hoarded cotton in large quantities and expanded production capacity, and cotton prices have fallen sharply in 2011, far exceeding the general expectations of manufacturers.

The sharp fluctuations in cotton prices will not only cause the production and marketing of cotton spinning enterprises to be sluggish, inventory increase and profit decline, but also the negative effects will extend to the industrial chain, which will affect the normal production and market confidence of the upstream and downstream enterprises, which will reduce the market purchase of consumers and hamper the stable operation of the entire textile and garment industry.

Of course, the problem of raw materials is not the only factor causing the rise in clothing prices.

Other cost increases will also have a big impact on price increases.

For example, in recent years, the rising cost of manpower has become a headache for enterprises.

Zhejiang Xiangrun Garments Co., Ltd. is a large garment manufacturer in Xiaoshan Industrial Park, Zhejiang. According to the introduction, the average wage of its workers in 2009 was 1900 - 2000 yuan / month. By the end of 2010, their average wage rose to 2600 - 2700 yuan / month, and the average wage of the bottom workers in 2011 has increased to 3000 - 3100 yuan / month.

At present, the number of workers in the company is 1800 to 1900, that is to say, the cost of labor alone is 20 million yuan more than that of 2009.

This year's "recruitment difficulty" problem has also led to higher wages for workers.

Earlier, in an interview with reporters in Wenzhou, Lin Shaodong, President of Wenzhou soma Clothing Co., Ltd. told reporters that today the wages of workers are rising and rising again.

The salary of "soma" general worker is more than 2000, and that of sample workers is about 3600.

Even such wages still feel that recruitment is not easy, and now some enterprises are unable to get workers if they get rich.

Lin Shaodong was helpless.

Wang Tiankai, President of China Textile Industry Federation, said at the seventh annual meeting of the China spinning round table forum held at the beginning of this year, the prices of all key elements in the textile industry continued to rise in 2011, of which the increase in labor cost was the most prominent, with a year-on-year increase of more than 15%.

While the cost of all kinds of production factors continues to rise, the interest rate of banks and the appreciation of RMB are superimposed. Although the level of production efficiency management has been improving, most enterprises are unable to fully cover the multiple cost rising factors. Under the fierce competition market environment, the price of products is limited, and enterprises are facing increasing pressure of rising costs.

Sun Ruizhe, vice president of China Textile Industry Federation, said in an interview with reporters that the era of high cost will become an irresistible "new normal".

Faced with high cost, industry enterprises should gradually realize the decentralization and reduction of cost risk through technological research and development of alternative raw materials and targeted use of financial instruments.

If we want to speed up the acquisition and substitution development of cotton like chemical fiber, we should use hedging and other financial instruments to anticipate strategic locking and avoid price fluctuations.

In addition, supplier management cost can account for 60%-80% of production cost.

Through the implementation of supplier management, manufacturers can bridge the gap between the supplier's capabilities and their expectations, increase the control capability of the procurement business, ensure the purchase requirements through the trust guaranteed contract, and save unnecessary inspection costs.

"Profits are thin like razor blades, and losses are like shadows."

This sentence describes the current survival situation of manufacturing enterprises in the era of high cost.

In this regard, Sun Ruizhe believes that only by not being bound and controlled by foreign objects, focusing on efficient, open and harmonious supply chain management, focusing on brand building, focusing on shaping the core competitiveness of the entire industry chain, can we pride ourselves on the high cost era.

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Channel cost dragging garment enterprises

Nowadays, the Spring Festival has passed for some time. In the face of the general rise in clothing prices, many consumers seem to be waiting for the next wave of discount frenzy.

It is no doubt that consumers are looking for opportunities to buy good quality and inexpensive products. But for clothing brands, on the one hand, constantly increasing the price of clothing, and on the one hand, they continue to participate in more and more discount activities in the shopping mall, this phenomenon is really strange.

What causes this garment supplier to increase the price and discount?

There is no doubt that in addition to the cost of raw materials, labor and so on, site rentals, shop fees and logistics costs are also a major factor affecting the profits of China's textile and garment enterprises.

Earlier, Li Rugang, vice chairman of YOUNGOR, said that the sales volume of its franchised store in Nanjing East Road in Shanghai was about 20 million - 30 million yuan a year. The store had been bought out by YOUNGOR, but if it was to rent other people's stores, the rent and income had been basically unchanged because of the sharp rise in rents. If the enterprise had to maintain its original profit level, the retail price would probably be 10 times the cost price.

In the past, clothing retailers could sell their clothes at a price of 3 to 4 times the factory price.

And for some other Garrison

In addition, clothing enterprises should also deal with the high price entry fees of department stores and some arbitrary charges of "no sense". The only way to take measures is to increase the selling price of products.

Insiders revealed that a price of tens of dollars of shirts in department stores are often priced at more than 1000 yuan.

In fact, the "commercial monster" has become a gold suction black hole that encroachment the profits of textile and garment production enterprises and the exploitation of consumers' pockets.

According to the person in charge of a local supermarket chain in Hefei, the resident population in Hefei is less than 6 million, but almost all famous businessmen are super brand. With the expansion of brands, customers are shunted one time at a time.

On the one hand, suppliers will raise their prices to make profits. On the other hand, with more shopping centers, business investment will be even more difficult.

Many retailers at the provincial level have unanimously reflected that all kinds of operating costs have been soaring rapidly, especially the rapid growth of site rents, so that the cost of hypermarkets is rising.

Discount sales are hard suppliers.

As consumers gradually develop the habit of shopping without discount, "maintaining the original price is very difficult to boost sales significantly."

The head of many shopping malls said that the reason for the current strange circle is to cater for consumers.

"Price is the killer of product sales. This is the game rule of the market. Many consumers have to buy because of blind obedience and irrational shopping habits."

First commercial network president Huang Huajun thinks.

Peng Peng, a senior researcher at the Guangzhou Academy of Social Sciences, also said that Chinese people like to discount and bargain. This leads to discount sales activities in many shopping malls, but at the same time, it also reduces business profits and increases the cost of producers.

Therefore, clothing manufacturers have to raise the price tag, which reflects the problem of discount mode in marketing.

A well-known clothing business owner recently told the media: "now this strange circle has become a common phenomenon in the industry.

There are still deeper factors hidden in nature.

The person said, "in fact, the market often discounts, manufacturers are the most miserable.

But now there are many problems in the market. Manufacturers have to raise the price because they charge various entry fees to suppliers.

How much can a department store charge for garment suppliers? Many garment suppliers believe that there are only two kinds of terminal sales channels for high-end textile and clothing brands, one is to open stores, the other is to enter shopping malls in two.

The cost of setting up a large store such as high rent, decoration and so on will cost at least 600 thousand yuan to more than one million yuan, so many garment enterprises will not give up the department stores.

Most stores are currently in accordance with the way of joint deduction, according to the sales ratio of about 10% - 40% or so.

"This strange circle reflects the high cost of marketing."

Peng Peng believes that this will lead to a bad business model. Shopping malls, manufacturers and consumers will not be honest with each other. They will hurt the normal business culture.

At present, the damage to the three party is gradually expanding.

On the one hand, consumers complain that the price of clothing is becoming more and more expensive. They feel that they are being cheated on discount clothing in department stores. Meanwhile, department stores are becoming more and more worried about sales. Clothing suppliers are also worried. They can only raise the price and offer a discount.

"At present, suppliers and shopping malls have no other means to increase profits."

Hua Tao, President of the Shenzhen retail business association, believes that the operation of the whole market is not enough. The fundamental reason is that the formation of such a vicious circle is driven by interest, which may be difficult to change in the short term.

"Now the market requires manufacturers to discount, but manufacturers are suffering from no other recipe, but can only get deeper and deeper.

It can be predicted that this year's craziness will be intensified.

A well-known clothing enterprise official said.

"Good products create their own brands through creativity and innovation. These goods are bought even if there is no discount, for example, some luxury brands, or some brands that only offer discounts to members."

Huang Huajun, President of the first commercial network, thinks this is a revelation.

Some brand clothing enterprises general manager said that manufacturers only try to develop exclusive stores, carry out economic pformation and upgrading, to deal with this strange circle.

The government should crack down on all kinds of commercial misconduct.

"The rules of the foreign countries are very harsh and the market dare not go wild.

We should also learn from the business philosophy and methods of foreign markets. "

Hua Tao further explained that for the shopping malls, the market environment affected the phenomenon of no discount and no sales, and tried to introduce a unique brand before. But soon these brands spread all over the shopping malls, so they created their own brands, implemented brand agents, plotting to walk out of this strange circle, and walked out of this strange circle to survive. Instead, they would fall down if they did not go out.

"As far as I know, many shopping malls and manufacturers are racking their brains to change.

Consumers will also change.

This is the darkness of the commercial market before dawn.

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Brand clothing is rising all the way.

In 2010, the price of the general brand clothing in the mall was mainly based on three figures. The situation of 1000 yuan, a shirt and sweater was only common in the main high-end shopping malls. But this year, all the clothing brands are like the "hormone", and the four figures become the general price of the shopping mall.

It is estimated that 2011 autumn winter clothing prices generally increased by 20% over the same period last year, some even as high as 30%.

In the face of the rise of domestic brands, foreign brands appear to be more "calm".

The trend that domestic brands are becoming more and more foreign brands is becoming more and more obvious. This also exacerbates the competition among brands.

The price adjustment of clothing brand is not a special phenomenon every year, but as the autumn and winter of 2011 and the beginning of 2012, the overall rise is a rare phenomenon. Why does the price of clothing brand enterprises remain high? What is the view of the clothing brand behind this phenomenon?

Facing all kinds of cost increase in 2011, the common measure for sports brand is to raise prices.

After the end of the fourth quarter of the domestic sports brand, including the products of Lining, Anta, XTEP, PEAK, and 31st degree, the price and price of shoes and clothing in the fourth quarter will rise by one to 20%.

The price of sports brand products has risen by 10% to 20% this year, according to the data released at the beginning of the annual ordering and annual reports.

Li Hao, general manager of Anta Sports Products Limited's public relations department, also said that Anta will adjust with the general trend of the industry. It is reported that Anta will raise the selling price of footwear products, with an average increase of about 10%.

The rise in price is a double-edged sword for clothing brands. On the one hand, sales will be promoted because of the increase of prices, but at the same time, price increases will also have crowding out effect on sales volume, which may inhibit sales growth. Besides, prices can not promote the growth of retail sales in the long run.

Xia Guoxin, chairman of Shenzhen Ellassay Apparel Industrial Co, said of the rise in clothing prices, "there are two factors in the rise in clothing prices, one is passive, such as rising prices of raw materials.

Another is initiative, such as brand upgrading, image building, image design and so on, which cost a lot of money, so we need to raise the price to make up for it.

Passive factors are external forces that all brands have to face.

The price of raw materials has gone up, and it depends on which enterprises have greater digestion capacity.

The active price rise is good for the brand. The price of luxury goods is very high, but the number of people who buy it is more and more, because the brand image is good.

If a brand raises its price voluntarily, and many people buy it after raising the price, it shows that the influence and tension of the brand have expanded, so it is a good thing for the brand.

How to change passivity into initiative requires increasing the added value of the brand itself.

Li Meng, deputy general manager of Shandong sulang costumes and garments, said that the rising cost is a common phenomenon. Whether it is brand enterprises, or foreign trade processing, OEM production enterprises are faced with no small risk.

In addition to adjusting product prices to ensure the survival space of enterprises, we must also avoid risks arising from rising costs, improve our capability of independent innovation and increase the added value of products.

Li Meng believes that for garment enterprises, we encourage the R & D design of innovative clothing products to attract consumers' attention from various aspects of styles and fabrics.

In recent years, sulang fashion has hired top global designers such as Italy and France to improve the overall R & D strength and core competitiveness of the entire design team.

"In order to alleviate the pressure brought by the cost of the enterprise, change the traditional production mode and reduce the management cost, Shu long uses the innovative" 6+1 "mode to integrate all the links in R & D, production, processing and sales of the product, so as to reduce both the operation cost and the value of the product itself.

Li Meng said so.

Xia Guoxin also said that if the brand does not have its own tension, it can only accept passive price increases, which will undoubtedly have a great erosion to the profits of the brand, which will cause difficulties for the enterprises to run.

"If the brand meets this problem, it can only work hard on the brand itself. First, it is more innovative in product design, selling what others do not have, and breaking away from the simple price competition.

Second is to improve the quality of products, better quality, so that customers feel value for money.

The third is to improve brand service capabilities, including courtesy, expertise and so on, which do not require extra cost, but the value of creation is very great, that is, turning service into value.

New theory of Xia kingdom.

Consumers face rising prices

When it comes to the question of the rise in clothing prices and the acceptance of consumers, Li Meng said: "there are many factors for the rise in clothing prices. In fact, the rise in clothing prices is a microcosm of the overall rise in commodity prices.

With the pressure of economic inflation increasing, production costs, pportation costs and labor costs continue to rise. Clothing products will grow correspondingly, so as to maintain corresponding profit margins and maintain the normal operation of enterprises. However, the rise in clothing prices has not been divorced from the actual income level of consumers.

The brand garments of Shu long are all made of high-grade imports, natural environmental protection fabrics, catering to the increasingly updated consumption concept of consumers, vigorously developing and innovating.

In recent years, the concept of life of consumers has been escalating, advocating healthy, comfortable and environment-friendly consumption concept and pursuing higher quality and high standard of living. High level consumption is not only a symbol of status, but also a pursuit of healthy life.

He also believes that consumers of brand clothing tend to have a certain ability to consume. In the case of rising costs, it is necessary to ensure that sales are more dependent on the brand loyalty of consumers, clear consumer demand, establish a good brand image, form a centripetal force on the brand, and do what consumers want and do for consumers.

Xia Guoxin said that for the consumers of song's brand, the price increase will not obviously affect the consumption of consumers.

"China's brand is now in the upgrading stage, and the consumption power of Chinese consumers is also upgrading, which is not very sensitive to price, especially for some high-end consumers who can not even care about the price.

The clothes that we buy will still be bought, and we will not pay for them because of the rising prices.

Cao Shengkui, chairman of Beijing Carmen Clothing Co., Ltd. believes that the degree of consumer acceptance of price increases depends on whether purchasing power is rising correspondingly. On the other hand, the majority of consumers are dependent on rising brands.

If the price of most brands increases, but consumers' purchasing power (disposable income) has no corresponding growth, consumers may turn to buy cheap clothing or even brand clothing, which will cause the overall consumption to move downward.

If the price of a few brands increases, consumers may choose those brands that do not rise in price, resulting in the pressure of survival of the rising brands. If the consumption power increases with the increase of most brand prices, it will probably reflect the trend of consumption upgrading as a whole. If only a small number of brand prices rise, then consumers themselves will have further subdivision, which should be a benign development of China's consumption.

In the face of the overall rise in clothing in 2011, the high-end market is still better off because consumers are not sensitive to price, and for the low-end market, life is not so good.

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Low value brand unbearable pain

For some smaller and less influential brands, cost increases are fatal.

Small brands, because of their small brand influence and low customer loyalty, need to win market share at a low price. The impact of rising costs on small brands difficult to raise prices is enormous.

All along, in the low-end market where the wholesale market is the main living environment, there are all kinds of small and micro garment enterprises. The price of the market which exceeds supply is much higher, and it can not change the reality of it as a buyer's market.

For the buyer's market, the dominant position of consumers is unshakable, while consumers in the low-end market tend to be more sensitive to the price of clothing. Therefore, the rise in prices will affect their sales volume.

This allows small brands that sell profits to fall into the dilemma of rising prices and declining sales. The rise in prices caused by rising costs does not bring more profits to enterprises, and the decline in sales is bound to make profit margins narrower.

Profits are squeezing and sales are decreasing again, making the low-end market where competition is fierce, showing a more competitive situation.

And the price rise caused by rising costs can be said that there are few beneficiaries in the low-end market, from producers to wholesalers to retailers and consumers.

"The rise in prices is painful for those who win at a low cost, especially for those with low gross margins.

Costs will rise, prices will not be shifted, profits will be affected, and pressure will be great.

Because low-end consumers are relatively sensitive to price, sales may be affected.

In this way, a number of enterprises will withdraw from the market, but for real excellent brands, it is an opportunity instead.

It's always like this. It's not good to get rid of it, but the rest is the best.

Xia Guoxin said so.

The optimistic view is that as long as the enterprise can evolve continuously, it can enhance its viability. Cao Shengkui, chairman of Beijing's Carmen Clothing Co., Ltd., said: "the brand price increases and the acceptance of the brand with high added value is smooth. The brand with low added value will cause considerable pressure. Whether or not they will withdraw from the market depends on whether the brand's operation ability is enough to pform the pressure of price increase into the efficiency of management.

If we can enhance the design and development, supply chain management and sales capabilities, the pressure of price increase can be completely pformed.

For any market, the stronger the stronger, the weaker can only shrink and withdraw.

Those who have the ability to get rid of the weak part of survival are more likely to be the evolution of viability than the survival of the fittest, rather than polarization.