Hidden Dangers Behind The Discount Of Clothing Retailing Industry

Recently, reporters visited some shopping malls in Beijing, and found that most of the clothing products in the mall had begun to discount. Take the right store in Hua Tang mall as an example, the brand clothing in the mall, such as Vero Moda, only, ege and attachment, are all on sale. Brand clothing Most of the 50 percent off discount, partial discount even lower to 2-3.

It has been reported that in Sijiqing, Hangzhou, the women's wear market is the largest distributing center for women's clothing in Zhejiang province. In sharp contrast to the hot weather outside the market, customers in twos and threes do not see many of the vendors who come to pick up the goods. Most of the most obvious locations of shop doors and windows are advertisements with reduced prices.

A clothing brand salesperson at the right store of Hua Tang mall told reporters that it is not the peak season for clothing sales now, and that many businesses have large stock of goods, so discounts are normal.

In fact, inventory problem has been a domestic tradition in recent years. Garment industry The pain of development. At present, the domestic textile and garment manufacturers rely more on the traditional management mode. In the whole supply chain, the development of textile and clothing is restricted by bullwhip effect. The effect is mainly reflected in the Retailer Managed Inventory mode, that is, ordering, replenishing and digesting inventory on its own. The traditional RMI mode is destined for its high inventory rate.

The haze of high inventory is wrapped in textiles. clothing The whole industry chain has been choking the enterprise. "Cautious production in textile mills, cautious orders in garment factories, and cautious purchase in the sales market have led to a whole industry panic contraction. Under tight conditions, the consumer market is becoming weaker and weaker, forming a vicious circle. A clothing company official said.

Last year, many domestic garment enterprises seemed to concentrate on their stocks. "It's hard to survive the financial tsunami and 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 decline, which would aggravate capital turnover and eventually lead to the entire business in a desperate situation.

In addition, the majority of garment enterprises in China plan production quantity, or adopt the "order meeting" mode to determine, six months to a year ahead of time to produce products. This mode mainly depends on downstream distributors rather than consumers to provide market information. Enterprises often judge the consumption situation because of information asymmetry, and the output of their products is far greater than the actual market digestibility, resulting in backlog of inventory.

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 continuous replenishment of production led to the "bigger and bigger" inventory. Another is the logistics factor. Most of our garment enterprises headquarters deliver to the branch on average for 15-20 days / times, and the frequency of delivery to the channel outlets is 3-5 days per time. This not only reduces the speed of new product listing, but also leads to the backlog of stock at headquarters and branches.

Lining annual report shows that in 2011, the average stock turnover time of Lining was 73 days in 2011, which increased by 21 days compared with the 52 day of last year, almost twice as fast as that of Anta sports, which had the fastest turnover rate. Higher inventory increased Lining's inventory provision to 188 million yuan in 2011, which was 63.48% higher than that in 2010.

The 31st degree Bulletin shows that the brand's inventory in 2011 was 4 billion 512 million yuan, 81.8% higher than that in 2010. The annual report of Anta also showed that, as of December 31, 2011, the stock of Anta was 618 million yuan, up 36.1% from the same period last year, compared with 454 million yuan in the same period last year.

In the view of industry experts, behind the high inventory is the comprehensive reflection of clothing enterprises in brand, design and channels. Behind the frenzy of discount sales, the marginal effect of clothing brands is decreasing, and it is easy to damage the brand image. The major brands are promoting discount activities at different levels to digest inventory, and some brands even offer new products. This is mainly based on discount sales promotion to solve the inventory problem. In fact, it is a temporary solution, although it can solve the urgent need of the enterprise, but it is not a permanent solution.

Wang pointed out that in the long run, we should strengthen product innovation design, reduce homogenization, and set up a fine inventory control process so that enterprises can "sell one for one" instead of "buy one for one".

Therefore, it is more strategic to control and prevent inventory generation and find another way to develop inventory. For example, electronic commerce, which is now in full swing, can alleviate the pressure of enterprise inventory, but it is not a panacea.

Wang Qianjin believes that most of China's clothing enterprises do business, not to build a network brand, but to increase a de stocking channel. 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 will be more likely to cause inventory.