Discount Ahead Of The Clothing Industry Haze Hard To Disperse, Look Forward To The Breakout Of E-Commerce

In spite of official PMI data, inventories of finished goods rose for two consecutive months, and the finished goods inventory index in July was 48%, down 4.3 percentage points from last month.

But correspondingly, orders continued below 50%, and prices dropped sharply.

Qu Hongbin, chief economist of HSBC Greater China, said: "inventory has become an important factor in dragging down the economic rebound.

This round of inventory growth has not yet ended since the tightening of policy in the second half of 2010.

Because the enterprises are facing unprecedented pressure of destocking, this restricts the company's desire and ability to expand production capacity in the future, which can explain why the credit demand in the near future is so weak, and the monetary policy means the reduction of marginal utility.

Hot summer is still cold.

Customers in Xidan shopping mall are scarce.

Almost all brands in the region are on sale.

Reebok's total half off; new thinking part seventy percent off; Li Ningman 100 yuan back to 35.

A salesperson of a brand sportswear in a shopping mall told reporters that it was not the peak season for clothing sales, and that the volume of goods in many businesses was relatively large, so discounts were normal and no discount was abnormal.

Whether it's first-line brand or domestic two or three line brand, all kinds of ways are being discounted, and some brands even lower to eighty percent off.

The sales staff said that this year's discount is not only much higher than in previous years, but also the discount time is ahead of schedule.

Before it began to promote sales in the near season, but now summer begins, it has already attracted the consumers by changing the season's big discount slogan.

"High clothing inventory is an open secret in the industry."

Mr. Li said that the current situation is that the inventory and sales ratio of the first tier brands is generally 6:1, and the sales of their single retail stores also fell by at least 10%, which is even worse than the 2008 financial crisis.

Statistics show that in the first quarter of 2012, the total inventory of 85 listed companies in textile, clothing and fur industry reached 73 billion 172 million yuan, an increase of 10 billion 849 million yuan over the 62 billion 323 million yuan in the first quarter of last year, an increase of 17.4% over the same period last year.

In 2011, while most of the textile enterprises were in high inventory, due to the shrinking of orders, too much inventory was hard to digest.

In 2011, after creating 71 billion 103 million yuan of high inventory, the inventory of textile and garment industry in 2012 was not digested, but it was higher than that in 2011 and increased to 73 billion 172 million yuan.

Under the background of two production and sales, the "credit" business mode of the textile and apparel industry seems to be very difficult. "Triangle debts" make enterprises face the crisis of capital fragmentation at any time.

"In the first half of last year, the amount of money can be returned to 90%, and this year has not been a shadow." Mr. Li said, "no, I borrow 2 million from the bank, only interest is 170 thousand in one year."

Reason

Since last year, many domestic garment enterprises seem to be concentrating on their inventory. What is the "haze of inventory" coming from?

"It is difficult to survive the financial tsunami, but also to meet the European debt crisis."

Wang Qian, chief analyst of China's first textile network, pointed out that human resource costs, rising prices of raw materials and changes in the trade environment made the business environment of garment enterprises "sudden change" in recent two years.

The export orders of some garment enterprises have declined sharply this year. A large number of hoarding goods are forced to be sold domestically, coupled with the economic downturn and relatively weak consumption, resulting in a large backlog of stock.

Wang pointed out that in the economic downturn, the turnover of product inventory slowed down, which not only occupied the operational capital, but also led to the failure of enterprises to update their products. Without new products, there would be no way to attract more customers, and their performance would go down seriously, thus exacerbating the difficulties of capital turnover and even eventually causing the whole business to fall into despair.

In addition, most garment enterprises in China adopt the "order meeting" supply mode, producing products six months to a year in advance, and mainly rely on downstream distributors rather than consumers to provide market information. The judgment of the consumption situation of enterprises is often too optimistic because of information asymmetry, and the output of products is far greater than the actual market digestibility.

Leisure, sportswear and so on belong to the mass fast moving consumer goods. Once the season is over, they will depreciate rapidly.

Moreover, the characteristics of clothing enterprises are to constantly introduce new products, and they can not clean up their inventory before putting them into production again.

The result of continuous replenishment production is that the stock is getting bigger and bigger.

Apart from the internal and external environment, there are also problems in the management of enterprises themselves.

Mr. Li said: "in the stage of horse racing in the garment industry, the speed of channel expansion determines the income growth of enterprises, which is easy to understand."

Many companies have adopted the operation mode of franchising, supplemented by direct operation. The franchisee should use the brand, trade name and service mode of the garment company, and pay the royalties ranging from 500 thousand yuan to 3 million yuan (the order discount rate is different) to the company, and 25% of the final sales revenue will be returned to the franchisee.

In this way, the effect of the expansion of sales channels will be immediate. The US stores will grow at an initial rate of 50 per year.

In contrast to the speed of opening stores, most franchisees and garment companies have a rigid regulation on the annual growth of their business contracts.

"Every quarter has an order index, which is far beyond the digestibility of the stores," he said.

If you order less, you will be told to pfer the agency. "

"Inventory is a gradual accumulation process. Once inventory problems arise, it will be difficult to control effectively in the short term.

Relatively speaking, inventory needs to be kept below 5% of total assets in order to control its deterioration. However, the inventory of most garment enterprises in China is far from the figure. "

Wang went ahead.

E-commerce breakthrough?

Enterprises are plunged into the "going to stock" and discounted "selling" whirlpool. The major brands are promoting discount activities at different levels to digest inventory, and some brands even have new products at a discount.

Some enterprises rely mainly on discount sales to solve the problem of high inventory. In fact, this is a temporary solution, although it can solve the urgent need of enterprises, but this is not a long-term development strategy.

Wang pointed out that promotion and profit making can only be an emergency. In the long run, we should strengthen product innovation design, reduce homogenization and set up a detailed inventory control process, so that enterprises can "sell one for one" instead of "buy one for one".

Another way to go stock is to let businesses hate hate business channels.

Without bottom line price war, enterprises sometimes have to push goods at close to zero profits, thus becoming an inevitable move to "break the tail and survive".

Take Anta's new leisure men's shoes this year as an example, selling 239 yuan in the physical store, while in Tmall mall, the group buying price is 155 yuan, which is equivalent to a discount.

The 31st annual report shows that the company will focus on developing e-commerce and has sold shoes and clothing products on Taobao through an independent third party agency.

Lining, Anta and PEAK also mentioned in the annual report that we should continue to strengthen the construction of e-commerce channels so as to meet the current consumer demand and cope with high inventory.

Global shoe net data shows, take China sports brand base Fujian Quanzhou as an example, at present, nearly 70% shoe clothing enterprises are involved in e-commerce.

Last year, the sales volume of Anta's electricity supplier was 160 million yuan, XTEP 120 million yuan, Hongxing Erke 100 million yuan, and Jordan 50 million yuan.

Wang said, "most of China's garment enterprises do not want to build a network brand, but to add a channel to go.

If the target is taken for a long time, killing the brand will cause great harm to the brand.

"If the control is not good, the electricity supplier channel is more likely to cause inventory."

He said that as an example of the electricity supplier brand, as far as the end of the three quarter of last year, the total stock of van guest was as high as 1 billion 445 million yuan, almost half of its sales in 2011.

Such a clothing supplier brand, rely on the low price to compete for the offline market, when there is a salable style, it is difficult to like the offline brand that rely on large discount sales to digest inventory.