Li Rucheng: Let The Chinese Brand Go Further

YOUNGOR chairman Li Rucheng

"From the present point of view, not only in our domestic counterparts, our strength will be stronger than that of the general industry, but also in the international arena, it has been favored by some multinational companies. Recently, we have talked more about brand mergers and acquisitions and strategic cooperation."

Li Rucheng said.

When it comes to the development of YOUNGOR brand, Li Rucheng said, "YOUNGOR brand has been put into the market since 1991, and has been recognized by the market through more than 20 years of operation. Its market share is also growing. It has maintained more than 20% growth every year. The gross margin of sales is higher than that of any brand in China, and its brand vitality and development prospects are good."

In order to make up for the fact that YOUNGOR's original customer base was characterized by a large number of business personnel, relatively formal, and a certain gap with the public fashion, and based on the consideration of market diversification, YOUNGOR implemented multi brand strategy in 2009 and created five brands.

The main brand YOUNGOR is for the official business crowd; MAYOR aims to build China's tailored high-end brand; the GY brand takes

In addition, it talks about how to learn from POLO and LV.

For this year's situation, Li Rucheng said, "it will be better than 2011," because we have a solid foundation.

Let the Chinese brand go further

Reporter: YOUNGOR diversification strategy is a very wise choice and a particularly good way to mix and match. In terms of diversification of the main industry, should we focus on international enterprises, such as Europe and America, especially the European luxury brands, which have fully derived related fields?

Li Rucheng: from the clothing industry, I think China's overall industry level is still in its infancy, and now there is a distance from YOUNGOR to Europe, no matter in terms of industrialization level, information level, design concept and brand operation.

15 years ago, I saw all the big clothing enterprises in Europe, America and Japan. At that time, I thought blindly that they could surpass them in 10 years.

5 years ago, they moved their industries to Asia - China and Southeast Asia, especially in Nordic and southern Europe. They were very successful in their pformation. They adopted the idea of information technology and design and brand operation to make the brand bigger.

Under the great cultural background of China, the practitioners in the clothing industry, whether management team or marketing team, are deficient in information level and foreign language. Tian Ji's horse racing story is the three category of horses in the industry, because the industry is different from the Chinese people's expectation of value orientation, and outstanding talents are more willing to invest in the financial and IT industries.

In Europe and the United States, the clothing industry managers generally have two qualifications: professional qualifications and management degrees.

The different structure of talents in the industry also directly affects the speed of integration with the international market.

There is still a long way to go for Chinese enterprises to participate in international competition. The media should also give us enough time and tolerance, not to require Chinese enterprises with European standards.

Now the world's clothing industry, the real big brands such as Zegna, Armani, BOSS, etc., because of high operating costs, high market prices, the actual amount is not large, basically in a state of no profit.

The truly profitable ones are more popular brands, such as POLO and ZARA.

Looking back at YOUNGOR, the actual gross profit is above 65%, basically flat with LV, and sales profit margin and return on investment are above 20%.

Many high tech industries now have a gross profit margin of only 17%.

Making brand into a cultural industry

Reporter: YOUNGOR has derived from the traditional functional leading brands, such as GY, which is fashionable, young and personalized. The difference between them is very obvious. What are the weak links that are facing the more difficult and need to be solved now? What are the assumptions about the future of GY?

Li Rucheng: YOUNGOR brand has been launched since 1991.

GY is a supplement to YOUNGOR's main brand in the young series.

At present, our target audience is basically located in the 25~35 age group (the core age is 28 years old and ~33 years old). The young elite group should not only embody the characteristics of youthful vigor, but also conform to the needs of the society for the maturity of the professionals, which is in line with the aesthetic and value orientation of the mainstream social groups.

In fact, we launched this brand, also considered the factors of the change of the domestic population structure. From the end of 90s to the present, the development of sports brand in the industry is very fast. It indirectly reflects the demand of students - high school students and junior high school students. This is just like the American baby boom. It is in the stage of consumption growth. The birth of GY conforms to the needs of the times.

From the perspective of channel construction and brand promotion in recent years, we take East China as the core, and have built more than 100 outlets. This year, sales can be over 100 million, especially in Jiangsu and Zhejiang. Sales in Hangzhou and Yintai can be up to ten million.

Next, we will extend our tentacles to key cities such as Beijing and Tianjin, and promote the development of neighboring cities through image stores and flagship stores.

Reporter: General Li, about the brand of GY, do we have some highly targeted publicity, advertising or marketing strategies?

Li Rucheng: GY and "YOUNGOR" are two separate brands with their connotations and blood ties. They are put together because they haven't grown up yet and want to eat YOUNGOR's milk. At present, they are still in the "blood pfusion" period, and the next step is the independent operation of the brand.

Reporter: General Li, I would like to know the market performance of hemp in the application of civilian products. Can this new industry become our new growth point? Is there any relevant policy support at the national macro policy level?

Li Rucheng: the state has very clearly identified the hemp industry as part of the national "12th Five-Year plan" plan, and approved a hemp Industrial Park in Anhui, indicating that the country's expectations for this new industry are still relatively high.

In 2003, when the hemp industry appeared as a concept, we roughly made a frame: China imports about 700000 tons of hemp from abroad every year. If we can replace half and develop some new markets, if applied to the fields of medicine, food, health care products, decorative materials, fiber and so on, we can reach 1 million mu planting scale, drive hundreds of thousands of farmers to become rich, and bring 100 billion of China's fixed assets.

From planning to completion and commissioning in 08 years, all the production facilities were developed by ourselves.

He grew up and grew up and was recognized by the FAO and won the Innovation Award.

The products we produce will be able to equip the general soldiers next year. This is a good news and turning point.

This year's basic guarantee will be profitable next year.

It has passed through winter and has entered the spring stage.

At present, there are 22 stores in the whole country, which may reach 30~35 next year.

We are not in a hurry to develop the market quickly, but we want to dig a bit more of our products and brands, do more perfectly, bring more unique enjoyment and experience to the society and the consumers, and benefit mankind.

At the same time, I hope more people can participate in the development of this new industry.

Exploration of "going out"

Reporter: we have been concerned about the "going out" of YOUNGOR in the form of merger. How did YOUNGOR come along? What difficulties did we encounter and how did we overcome it?

Li Rucheng: since 2008, YOUNGOR has spent $120 million to buy new Malaysia. After 3 years of operation, I think we have gained three benefits in this international M & A:

First, the integration of our industrial chain, originally our textile enterprise - Sheng Tai, Japan, its large orders to go all over the world to find, after mergers and acquisitions, formed from upstream to the retail terminal of the integrated operation system, no longer worry about the order.

And we have explored a way for YOUNGOR's internationalized operation. Now we have a sales company in the US, a sales headquarters in Hongkong, and a dozen factories in Southeast Asia, Vietnam, Philippines and Sri Lanka.

These belong to the integration of industrial entities.

Second, we have integrated international resources, and have been supported by the import and export bank through international mergers and acquisitions, lending us $eighty million at low interest rates, splitting it into two through Hongkong's new Malaysia, partly integrating into the textile industry, partly establishing an international financial platform in Hongkong, and melting hundreds of millions of dollars, enabling our capital chain to have international support.

The third and most important thing is that we have mastered some new core technologies of Singapore and Malaysia through the acquisition of new horses, such as YOUNGOR's DP shirt technology, from the new Ma Na, for two years, the development of light shirts has grown by 30%.

After three years of integrated operation, YOUNGOR has not only broadened its horizons, but also has gained worldwide recognition, and has been recognized by international and domestic peers. Now, Goldman and other investment banks often come to us for mergers and acquisitions.

But buying a new horse is equivalent to eating a big dumpling. It needs to digest slowly. After digestion, it will be easier to eat Xiaolong Bao.

Reporter: you once said that you have a dream to build YOUNGOR into a special consortium like LV.

So how do you locate YOUNGOR brand in the future, continue to be a popular brand like POLO, or a luxury brand like LV?

Li Rucheng: POLO and LV are two concepts.

POLO has many brands, such as green leaves, which support the POLO brand. Light shirts can sell US $200 from 20 US dollars, and the entire POLO can retail in the US for us $10 billion.

What we know about LV seems to be only packages. In fact, she has 40 brands, specialized financial investment groups for brand acquisitions, but 50% of the profits and sales capabilities come from packages, and 50% of its profits come from its champagne wines. Many other brands are actually losing money.

In brand operation, we can learn from POLO's practices, not necessarily to be specialized, but the span can be larger.

At the same time, we can learn from LV group's practice of buying and acquiring some luxury brands through a large number of acquisitions and mergers.