Fashion Enterprises Are Chanting Chain Models To Walk The Way Of Agency Distribution.

Franchising is favored by many enterprises because of its advantages such as reducing investment in capital and manpower, and quickly capturing the target market in a low-cost manner.

As a result, since the 90s of last century, domestic garment enterprises have been releasing investment advertisements and seeking franchisees regardless of their size and strength.

But in the view of Wu Ruiling, Deputy Secretary General of China Chain Store Association, many garment enterprises have launched "development".

"Slogan", but in fact it is "old wine in new bottle". It calls chain mode, and it is still a way of agent distribution.

"Not all enterprises are suitable for joining."

Reporter: why do domestic clothing enterprises still walk the old way of agent distribution? What are the characteristics of genuine franchise chain mode?

Wu Ruiling: the basic characteristics of franchise chain are unified image, unified purchase, unified distribution and unified price.

If we take this definition to observe, most domestic garment enterprises can not be called chain operation.

Most of the franchisees buy a buyout system when they buy goods. The quantity of sales is not related to the brand dealers. The agency sells more commission and price difference in the form of trade. From the perspective of franchise mode, this practice is a failure.

The relationship between franchisees and franchisees is more like "marriage" relationship, similar to a family combination.

Reporter: Why did our country not succeed in joining the chain system?

Wu Ruiling: the fundamental reason is that enterprises do not understand and grasp the mode of joining.

A few years ago, I emphasized at the international conference that the success of chain operation must have four elements, which can be summed up as "BOSS".

First is the requirement of brand (BRAND).

Chain headquarters need to be able to provide a strong brand for franchisees; secondly, in operation (OPERATION), there must be a standardized process to standardize.

For example, KFC, a successful restaurant business, has a 600~700 page operation manual.

This requires chain headquarters to constantly sum up their daily work experience and standardize them.

At present, there is no mandatory standard for chain operation in China.

The second is chain headquarters to supervise and urge and support the franchisees (SUPPORT).

The last point is also the goal of chain operation, that is to form an efficient operation system from headquarters to franchisees (SYSTEM).

Reporter: chain headquarters must have strong and charismatic brands. The reality is that many new brands are recruiting the franchisees on the one hand, hoping to expand the market by relying on the strength of franchisees.

Wu Ruiling: the franchisee joined the company because of their strong potential. He hoped to get the operating profit under the mature operation system and support system of the brand.

However, many domestic brands want agents and franchisees to have extensive market resources for sale. If sales of goods do not go out, brands will be irresponsible, which is totally unfair.

McDonald's in the world's more than 30000 stores, 90% are franchised stores, its affiliate mode has been more than 60 years.

More than 70% of McDonald's stores in the United States are McDonald's own property or long-term lease and then sublet to franchisees. Franchisees can also pass shops as heritage to the next generation.

In addition, McDonald's supply chain construction is also in place. Suppliers are working with McDonald's all year round. Where McDonald's goes, suppliers will follow wherever they go.

Through its unique property, supply chain, unified advertising and other policies, it enables the franchise mode to be both compact and dynamic.

Reporter: now many.

How do you view this phenomenon when enterprises gradually reduce their franchisees and expand the proportion of direct sales?

Wu Ruiling: in addition to some of the more prominent fashion and leisure brands in the domestic market, the chain operation mode of China's clothing industry seems to be in a predicament. But as the market and enterprises continue to mature, enterprises are constantly groping and honing to find their own business models.

In the long run, clothing enterprises should be able to invest in the system of product design, research and development, supply chain system and channel management, which is the prerequisite for the success of the franchise model.

If the brand has strong financial strength and wide influence, it can insist on doing direct battalion mode. From a capital perspective, when the product development capability of these enterprises is strong enough and the operation system is perfect enough, capital will naturally pursue, and the intervention of capital strength is a good thing for enterprises adhering to the self operated mode.

Compared with franchising, I am more optimistic about direct chain stores. Nowadays, a good clothing brand is best to stick to direct camp rather than join.

Not eager for quick success and instant benefit, without interference from the outside world, and persistently studying their brands, products and consumers, this is a necessary way for the success of direct chain operation.

"Clothing shops in the real sense are still blank."

Reporter: what brands have done better in chain operation?

Wu Ruiling: France and Spain have done a good job in the fashion chain.

Mango was developed in the form of franchising, and ZARA was also mainly joined in the early stage, and then gradually evolved into a form of alliance and direct integration.

This mode is especially embodied in the two or three line brand.

First of all, from the analysis of the format itself, brand franchised stores are the main franchising modes, while the specialty brand shops of C&A are mainly direct businesses, and the popular one is clothing department stores assembled by multi category garments.

There are few such shops in China, that is, clothing shops in the true sense are still blank.

Interviewer: are you talking about a chain store?

Wu Ruiling: it is a comprehensive professional clothing retail shop.

Although department stores are mainly clothing, they still have other products. Although the brand store is a clothing store, it is not a comprehensive clothing store.

In fact, domestic department stores do not assume the role of retailers, but brand dealers or agents are doing retail work.

So before us, brand operators are opening up clothing stores, whether they are in commercial streets or department stores, brand players are still dominant, they sell their own goods, recruit guides, etc.

No clothing retailers like Primark and P&C have appeared in China.

P&C is Germany's second largest clothing retail chain store, second only to C&A.

Its shop area can reach forty thousand or fifty thousand square meters. It combines many brands and categories such as men's wear, women's wear, children's wear, senior clothing and so on, and integrates multiple suppliers' brands. Each floor is sold with related categories.

The layout of the store is divided into categories according to the category, and the rules are differentiated according to the brand, so as to facilitate consumers to purchase.

This form of retail format is almost nonexistent in China.

Such a large scale, multi category shops, clothing retailers must do, and can include its own brand.

Primark, a real clothing retailer in the UK, integrates many brands, which I call "fashion hard discounts", while P&C is a retail price.

Primark has many trend brands, and the price of goods is extremely cheap, but it is different from the discounted inventory discount stores like Oteri J and top grade discount.

Reporter: in the current situation, excellent clothing agents are most likely to grow into large garment retailers?

Wu Ruiling: clothing agents and brands in large domestic areas are facing pformation.

The innovation is necessary and possible. Although the brand is part of the domestic market, we must learn from foreign experience and practice, and believe that Chinese retailers will surely have Primark in China.