Zheng Yonggang: Analyzing Fickle Of Shan Shan

Among the many businessmen in Zhejiang Province, Zheng Yonggang is probably the most "changeable" person. He said he was not familiar with every industry after the diversification of the company, but he was familiar with the most fundamental way of operation of the enterprises and was familiar with the general direction and strategy of the enterprises.

The "fir" department, led by Zheng Yonggang, has also come out of a unique road through the continuous involvement in the new business category.

The origin of Chinese fir originated in 1989.

In those days, Zheng Yonggang took over a small factory which was on the verge of collapse. The company named Ningbo Yong Gang garment factory was the predecessor of the Shanshan Group.

Shortly after taking over, Zheng Yonggang saw a young man wearing a train on a business trip.

Inspired by this "junk Costume", Zheng Yonggang immediately organized a technological force to develop a new suit after he returned to Ningbo.

The traditional Chinese style suits, which are very different from the traditional suits, are praised for their appearance. The slogan of "Shan Shan suits not too natural" is also suitable for the selling of Chinese fir suits at that time.

Since then, Zheng Yonggang has pioneered the mode of "production, supply and marketing through-train". By 1992, Shanshan had built the largest direct selling network in China's domestic clothing market.

In 1997, the annual sales income of Chinese fir suits was 2 billion yuan, ranking the first in China's clothing market for 7 consecutive years. The highest share was 37.4% of the market.

In 1996, Shanshan Limited by Share Ltd (600884) became the first A share listed company in China's apparel industry.

However, the dazzling performance did not dazzle the minds of the Chinese fir. Western-style clothes are the characteristics of the shortage economy era. At that time, the Chinese fir suit was positioned at the age of 18-60, regardless of consumption level.

There is no design element, and the understanding of brand concept is not perfect.

However, the one-stop mode and the poor division of labor are no longer suitable for market segmentation.

At the same time, in order to maintain 2 billion of revenue, inventory will have 8-9 billion.

These problems have attracted the attention of Zheng Yonggang.

"The shortage era has passed, and the buyer's market has come."

Zheng Yonggang's strategic judgment is exceptionally accurate.

He began to consider the two aspects of sales network and design to get rid of the past industrial production mode.

Zheng Yonggang summed up in an internal speech, "why should the old mode be changed? The production and sale mode must have a premise: the demand of the market is great, and how much goods are sold.

Once the demand for the market slows down, the channel is no longer a channel. It becomes a storeroom. Just like a city's pportation system, if there are problems, streets and roads will become temporary parking lots.

At that time, there were 26 branches and more than 30 offices in Shanshan, and there were as many as more than 6000 salesmen in the outlets.

By 1999, the pformation of Shanshan to its network began to be carried out drastically. All the outlets were cancelled and changed to franchising.

Zheng Yonggang thinks: franchise is China.

The stock discount of the original fir is pferred to the franchisee. For the newly opened franchisee, Shanshan sells shop on the basis of installment payment or loan.

The benefits and risks of the selling and selling of Shanshan commodities have been shared by manufacturers and franchisees.

In the past 10 years, the stock bubbles accumulated in Shanshan were all squeezed out once and for all, and the stock pressure of Shanshan threatened to disappear.

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At the same time of reconstructing channels, Shan Shan has entered a new field -- brand operation.

Brand operation, that is, to increase product segmentation by subdividing the market, and increase the design elements to enhance the gold content of the brand.

As early as 1996, Shanshan began to combine the famous brand with famous teachers. This is the first step for the domestic garment enterprises and designers to join hands.

Since then, FLRS women's wear and Venson men's wear have become the original brand of Shanshan according to the international advanced garment concept and quality.

The pformation of Chinese fir led to the entry of Chinese clothing into the era of "design brand" from the industrial age.

But 3 years later, FLRS and von van's two companies, which were built as high-end brands, failed to make profits, the two original.

Drawing on the above lessons, since 2001, Shan Shan has embarked on the road of "multi brand internationalization", and has been promoting its original brand through cooperation with the international Brand Company.

At present, Shanshan Group has directly controlled 22 brands, including 3 self created brands, 9 international registered designer brands, 8 international cooperation brands, and each brand's cultivation period is 3 years.

"We are now doing brand operators. Shanshan is investing in capital, and it controls many fashion brands with capital as its link."

Zheng Yonggang said, "what we are doing now is the way for multinational companies to make money."

By 2004, the clothing industry and other new industries of Shanshan were in a period of adjustment, with little increase in revenue, but profit margins were rising.

Taking Shanshan stock as an example, its net profit margin in 2000 was 16%, lower than the average profit margin of 18% of the industry. By the third quarter of 2004, the net profit rate of Shanshan stock was 12%, much higher than the average net profit margin of the industry 4%.

Now, Shan Shan will also cultivate its mature brand authorization pfer.

In 2005, Shanshan stock was purchased from Shan Shan jeans and fir.