Small Luxury Market Becomes The Goal Of The Old Textile Brand

Many enterprises believe that it is time to restart the glory of old brands. But in fact, the revival of old brands is no easier than building a new brand. Since June, Yu Zhengsheng, Secretary of the Shanghai Municipal Party Committee, has investigated the light textile industry and old brand enterprises for many times. He asked governments at all levels and relevant departments to care about the needs of enterprises, study policies, provide support, do everything possible to help enterprises achieve transformation and development, protect and develop national brands, Make our own brand bigger and stronger, and effectively improve the competitiveness of enterprises.

The living conditions of those familiar old brands have attracted wide attention from all walks of life.

And the fierce competition for the "Wanglaoji" trademark also made the market focus instantly. Why are they so valuable?

In fact, after years of fierce competition, most of the old brands' current living conditions are not satisfactory. "The definition of old brands has evolved. It used to refer specifically to the brand founded before 1949, but now the concept has expanded. The earliest old brands are about 65000, and now about 1500 can be seen in the market, and only about 10% are in normal operation. The overall situation is not very good," said Yu Mingyang, secretary of the Party Committee of Antai School of Economics and Management of Shanghai Jiaotong University.

He said that the most common reason for the decline of most old brands is that the product quality is seriously aging and cannot meet the needs of modern society.

However, according to market observation, as the economy continues to decline, the manufacturing industry is facing a bottleneck in development, and the transformation of industries and products is even more difficult. Many enterprises place their hopes on the revival of old brands or intend to purchase old brands to help enterprises overcome difficulties.

The enterprise's plan is justified.

Lin Yi, Director of Urban Industry Department of Shanghai Economic Confidence Commission, introduced that in 2011, among more than 400 manufacturing enterprises, light industry spin The added value of enterprises with brand advantages in the industry is 13%, and the total output value increases by 18%, much higher than the industry average.

"The production categories and enterprises with brand advantages are destined to be competitive. They will have great potential in driving employment and service industry," said Linyi.

However, the revival of old brands is no easier than building a new brand.

The best time?

China's old brands are mostly concentrated in the field of consumer goods, such as cosmetics, catering clothing Etc. Its survival has gone through countless checkpoints. However, the reform of state-owned enterprises in the 1990s was an important watershed in the development of old brands. After this round of baptism, many old brands were washed away.

"At that time, the marketization mechanism was open, and many state-owned enterprises were suffering from worsening business conditions due to lack of incentives, inflexible mechanisms, backward management, international brands were seizing cities, private enterprises were thriving, and many old brands under state-owned enterprises were quietly disappearing," market participants said.

This is also related to the consumption concept. "At the beginning of the country, consumers worshipped foreign trademarks, and even those with pinyin letters on the trademarks were very flattering. They were all disgusted with domestic trademarks and lacked a sense of the times, which was disastrous for old brands," Yu Mingyang said.

After this battle, most of the old brands failed to recover. Even if they were not eliminated, they could not recover their previous glory. "For example, Feile Audio, Eternal Bicycle and Venus TV have gradually disappeared in the market," Yu Mingyang said.

But at present, many enterprises think it is time to restart the glory of old brands. Their reason is that the living soil has changed. "The time has come for China to become a brand," said Ge Wenyao, chairman of Shanghai Jiahua.

Shanghai Jiahua is going to take a stake in Tianjin Watch Factory, whose main brand is Haiou Tuo flywheel watch. "The technology of the tourbillon watch is no worse than that of the famous Swiss watch, but its price is less than 1/10 of that of others. We like its brand and technology, and decided to carry out market-oriented restructuring, leading the design and operation of it. We are confident that it will be built into a high-end watch brand comparable to the famous Swiss watch." Ge Wenyao said.

Ge Wenyao said that the so-called ripe time is based on a variety of reasons. First, the market can see that foreign companies will also make mistakes. After media exposure, the halo of foreign investment gradually receded; Secondly, China's manufacturing level has made great progress, and its R&D level and marketing ability are also gradually improving; Third, Chinese consumers are gradually mature, pragmatic and assertive, but more worship foreign things, which is the most important soil for the development of national brands; Fourth, this year, three major economies in the world have problems, and China's comprehensive strength has increased, which also helps enterprises build national brands.

Xie Guoyi, deputy director of the State owned Assets Supervision and Administration Commission of Huangpu District, said, "To a certain extent, the development of enterprises is to create brands, and then to maintain brands. Chinese enterprises have reached the stage of creating brands. They also have the strength to maintain and innovate for old brands. As a result, many old brands are beginning to glow new life." {page_break}

In addition, the government is constantly introducing policies to encourage enterprises to build their own brands, and the recovery of old brands has come to the best time?

But time alone is obviously not enough.

The reality is very complicated.

Urban Industry Department of Shanghai Municipal Commission of Economy and Information Technology Textile industry The old brand enterprises have been combed and investigated. Lin Yi introduced that most of the old brands in the textile industry are concentrated in textile holdings and Shanghai garment factories, but the old brands in the light industry are scattered to various districts and counties or Shanghai municipal state-owned enterprise groups due to the restructuring of light industry groups.

Since they are decentralized, the attitude and vision of the competent department and the enterprise group to the old brand are different, and the operation of the old brand enterprises is also quite differentiated. Even, some old brand enterprises have no intention of operating for a long time, and only rely on authorizing other foreign enterprises to produce similar products, they can paste their own brands and charge licensing fees.

"Production, manufacturing and sales are all the other enterprises, and they have no control over the quality channels of authorized enterprises." Industry experts introduced.

"At present, old brand enterprises can be roughly divided into three categories, one is well managed, such as Lao Fengxiang, San Gun, etc., and the other is balanced enterprises, such as Big White Rabbit Candy, Warrior shoes The other is already sealed. " Introduction to Lin Yi.

Revitalizing old brands has different difficulties, needs and foundations for enterprises, so there will be considerable gaps in the future and process of revitalization.

The revival of old brands is not as easy as expected.

present situation

Shanghai Kaikai Group Co., Ltd. is striving to maintain the living environment of old brands.

Shanghai Kaikai Group under the State owned Assets Supervision and Administration Commission of Jing'an District is a gathering place of old brands. There are 8 old brands under its jurisdiction, including Longfeng Cheongsam, Leiyunshang, Kaikai, Hengsheng, First Siberia, Hongxiang, etc., of which Longfeng Cheongsam and Hengsheng are included in the national intangible cultural heritage.

These brands belong to two enterprises under the group. In 2001, Leiyunshang and Kaikai entered Kaikai Group, a listed company, to start their business. The other six old brands were classified as unlisted platforms - Shanghai Hongxiang Department Store.

Among the eight old brands, Leiyunshang has the most outstanding performance. Its profit is 30% every year. The profit in 2008 is 14 million yuan, and it is expected to reach 35 million yuan in 2012. It is not easy to maintain rapid growth in the increasingly competitive pharmaceutical circulation sector.

"We adjusted our strategy in a timely manner, highlighted our characteristics, turned to the health care industry at the expense of consumers, and avoided the pharmaceutical field where the pharmaceutical policy was frequently adjusted," said Zhang Xianghua, chairman of Leiyunshang Pharmaceutical West Area Co., Ltd.

Their strategy is not to jostle with others on the same road, and try to explore new areas. "With the improvement of living standards, consumers will invest more and more in health care."

In the field of health care, its main products include Chinese herbal tonic and Chinese herbal decoction pieces. "We will upgrade the traditional nourishing cream to a standard that can be used for standardized production, and Shanghai will soon set local standards according to the cream we produce," said Zhang Xianghua.

Because of grasping the market change trend, the profit of its "Shanglei" series of traditional Chinese medicine products has doubled in the past three years, from about 10 million sales in 2005 to more than 100 million sales revenue now. There are as many as 500 varieties of health care products such as ginseng and antler, which have become its leading products.

But other old brands have a much harder time. "Most of the old brands are small and medium-sized enterprises, and in the current environment, they can only be described as miserable operations," said Chen Huiquan, chairman of Shanghai Kaikai Group Co., Ltd.

It is understood that the annual sales of the Hongxiang brand clothing founded in 1917 were only 20000 yuan four years ago, and there were few stores. Only in the last two years did it reach 2 million yuan to 3 million yuan. We have tried our best to maintain the operation of the old brand. Now, those who have lost money have achieved the goal of closing the gap, and those who have lost money have achieved a small profit, while those who have lost money have continued to expand. " Chen Huiquan said.

Kaikai Group has indeed taken a lot of trouble for old brands. Including subsidy of rent, establishment of brand fund investment, and establishment of design center for old clothing brands.

"For example, the rent subsidy for Longfeng cheongsam stores is more than 12 yuan per square meter, and the group has subsidized 3 yuan per square meter for three consecutive years," said Shi Guozhen, general manager of Hongxiang Department Store.

In addition, Kaikai Group has invested 2.87 million yuan in the past three years to set up a design center for Hongxiang Department Store.

"We will introduce design, exhibition, marketing, publicity and other talents from the market and carry out training to help enterprises train successors," Shi Guozhen said.

At present, the annual profit of Hongxiang Company is only close to 1 million yuan, so the most critical design center of clothing enterprises still relies on the support of the Group.

However, Kaikai Group itself also bears a heavy burden, which also shoulders the work of people's livelihood in the district. "For example, the vegetable market, grain and oil market are operated by the group, and we have social responsibility," Chen Huiquan said.

In addition, Kaikai Group suffered a business accident 6 years ago, which resulted in a loss of more than 1 billion yuan. Only by selling its assets, it was able to repay its debts, and it had little spare power to support its subordinate enterprises.

　　“ Dragon and Phoenix Cheongsam We intended to hire an internationally famous consulting company to package and plan for the enterprise, but the price was millions of yuan. We didn't have so much money, so we had to give up. " Chen Huiquan said.

Old brands lacking funds are not enough to attract young talents. "The old clothing brands pay more attention to design and inheritance. With the old employees getting older and retiring, the lack of successors is the main factor that bothers us," Shi Guozhen said.

It is understood that, for example, the dragon and phoenix cheongsam is hand-made, but it will take two or three years to learn the basic skills of sewing, embroidering, discounting, measuring, proofing, and garment making. "These skills need to be taught by mouth, and explored in long-term practice. With high intensity and low pay, fewer and fewer young people are willing to join the industry," Shi Guozhen said.

On the one hand, the new force is insufficient, on the other hand, the number of retired and laid-off people is increasing, and it is difficult for the old brands to easily display in the market.

Obviously, old brands cannot be maintained by themselves.

Why not introduce strategic investors or simply sell? However, it is understood that old brand enterprises attach great importance to their own responsibilities and are extremely alert to outsiders.

Difficulties in introducing investors

"Old brands can't be destroyed in our hands, and they can't be sold." This is Chen Huiquan's bottom line. {page_break}

Because of this, he opposes the simple sale of brands. Even if we introduce strategic investors, we also have high requirements for investors. Chen Huiquan's request to investors seems simple, just to keep the brand, but in fact, it is difficult to negotiate without trust. "As long as the other side slightly reveals that it doesn't want to invest in the old brand management, we will give up the negotiation immediately," he said.

Longfeng Qipao contacted two strategic investors two years ago, but failed. The ideal investor of Kaikai Group is, "It's better to be a state-owned enterprise in Shanghai. We can trust that we can cooperate boldly, and we don't necessarily hold shares. But if it is a foreign-funded or private enterprise, we are very worried that they will put these time-honored brands on the shelf." Chen Huiquan said.

Even for PE, a financial investor, Chen Huiquan has some reservations. "PE is eager for quick success and instant benefit, which is inconsistent with the pace of doing business. If we can support and help, it is the most important."

This actually represents the common concern of old brand enterprises. Ge Wenyao, the chairman of Shanghai Jiahua, also stressed that it should not be sold to foreign-funded enterprises.

Once contacted PE, an investor said bluntly, "We have contacted many old brands in many places, but they are very wary and not very pragmatic. The requirements are very high, such as not holding shares, we can not dominate the operation, and so on. Finally, the cooperation has not achieved much."

In this way, there are not many enterprises that meet the ideal. Most of the state-owned enterprises in Shanghai are large manufacturing enterprises, and few garment manufacturing enterprises, so it is difficult to integrate similar Longfeng cheongsam factories. However, foreign state-owned enterprises or central enterprises have more difficulties in integration, which involves local taxes, personnel placement, approval and coordination at the level of multi local governments. What's more, how to estimate the value of old brands? As a state-owned enterprise, the high or low valuation of assets or brands will cause widespread discussion in the market.

However, in addition to capital investment, the introduction of investors also has another meaning, that is, to accommodate franchisees, which can not only solve the capital problem, but also rapidly expand the market.

Chen Huiquan is still cautious about this.

Its Kaikai shirt adopts the form of chain franchise, but it has no intention to expand the Longfeng cheongsam in the form of franchise.

"Kaikai shirt is a standardized production and assembly line manufacturing. The headquarters has a good quantitative standard to control the franchisees, but the Longfeng cheongsam is purely handmade, and the quality cannot be guaranteed. One is a popular standard production, the other is a customized niche, and the franchise form cannot be adopted as well," said Shi Guozhen.

It is not uncommon for old brands to have the same idea. For example, Lao Fengxiang. "We require all stores to have unified product packaging, unified standards, unified publicity strategies and unified quality. Old brands are famous stores, which have a great social impact. Chain stores will certainly save the cost of opening stores, but once the expansion is rapid, the headquarters will be difficult to manage the quality and standards of franchise stores, and if there is a quality accident, the attack on old brands will be fatal," Xie said.

However, no matter the introduction of strategic investors or the attraction of franchises, there are no lack of successful precedents for old brands. For example, Ruby Food Company cooperates with British businesses, Huangpu District Red Star Glasses Company cooperates with Holland HAL Company, etc., and Quanjude also expands the market in the form of chain franchise.

How to choose? It is a difficult choice for old brands.

Luxury Route

It is understood that many old brands have made the right choice to break out of the tight encirclement and pursue the niche luxury market?

Enterprises have their eyes on the luxury market. This, of course, stems from the attractiveness of China as the world's second largest luxury consumer market.

Longfeng cheongsam has improved since it was adjusted from the mass market to the luxury market. "The annual output has reached 800 to 900 pieces, with the lowest of 2000 yuan per piece and the highest of nearly 40000 yuan per piece. Six sets of products have been sold," Shi Guozhen said.

The lowest selling price and the average selling price in the market are 1500 yuan higher than each other, opening the gap. Because it is customized, there is no inventory.

However, the luxury line is destined to be a niche market. If Longfeng cheongsam does not want to give up the tradition of handicrafts, it must give up scale. Can niche sales support enterprise operation?

"The tailor-made characteristics of cheongsam are suitable for the high-end line. Moreover, China is not short of luxury goods market but of its own luxury goods. Longfeng cheongsam is all handmade and can ensure quality by relying on inheritance. The annual output of Swiss famous watches is also small, but the profit margin is quite high, which is enough to support the growth of enterprises. Longfeng cheongsam should make a difference in the luxury goods market." Chen Huiquan is very firm.

However, it is still a long way to go from an old brand to a fashionable luxury product. It will go through a long cultivation period, and the cost of initial investment is high, including research and development, marketing, packaging design and other links, which require enterprises to have super strength support.

Shanghai Jiahua's redevelopment of cosmetics "Shuangmei" can fully demonstrate the difficulty of luxury line.

Shuangmei brand was born in 1898 and won the gold medal of Panama World Expo in 1915, but gradually faded out of Shanghai in the 1940s and 1950s.

In 2007, Shanghai Jiahua was transformed into a fashion group. At that time, cosmetics began to subdivide. Shanghai Jiahua is striving to build a brand portfolio that vertically covers high, middle and low-end markets and horizontally occupies multiple market segments. Against this background, Shanghai Jiahua has continuously launched high-end cosmetics brands, such as Baicaoji, Qingfei, Kecai, Goufu, etc. On the 110th anniversary of the birth of the "Double Sister" brand, in 2008, Shanghai Jiahua decided to take the opportunity to revive the "Double Sister" brand, which is positioned as the top brand of Shanghai Jiahua.

In order to attract the market at one stroke, Shanghai Jiahua has invested heavily, and it has tried to integrate global resources, referring to foreign countries luxury goods Operation experience, "tell the story of Shanghai in the world language". In addition to inviting brand consulting companies and overseas teams to do product packaging design at the initial stage, we also invited well-known French design companies to take charge of store design, and invited Yaen to serve as the art director of the twin sisters. The latter served as the image ambassador in Bruti (a famous handmade customized shoe brand under LVMH) for five years, and then served as the global image and media director of Dunhill for seven years.

However, at present, despite the huge investment, the market share growth of Shuangmei is still not obvious, which also shows that it is still in the front end of the cultivation period. "From the perspective of its revenue structure, the operating revenue of Liushen accounts for about 45% of the total operating revenue, and Baicaoji accounts for about 25% of the total operating revenue. Shanghai Jiahua should let Shuangmei enter the harvest period as soon as possible," said the market person.

Revival prospects

Many industry experts have considerable reservations about reviving old brands.

Xie Guo said that if the brand is not maintained for three years, it will take six years to restore it. Some old brands have been silent for many years, and their maintenance costs are high. Moreover, most of the old brands belong to the completely competitive market, and the competition has become saturated. "Whether it's creating new brands or digging up old ones, the chances of getting ahead are small."

He believes that both old and new brands need certain conditions to enter the market, such as capital, culture, maintenance, talents, promotion and operation. "The advantage of restoring an old brand over creating a new one is that it has a story, a precipitated culture, and it is easy to reopen the market, but there are also limitations. The innovation and transformation of products, such as the transformation from mass consumption to luxury goods, is not easy to accept."

Yu Mingyang also said that the cost of restoring old brands is not low, such as R&D investment, sales investment, promotion investment, etc. Therefore, "recovery is not for the sake of recovery, but to give yourself and consumers a reason to have the value of recovery."

But there are also optimists. Chen Huiquan said: "Old brand enterprises mainly rely on persistence, step by step, and accumulate foundation and experience." He did not deny that it is not easy to restore the glory of the old brand, but "operators must have confidence and determination, and believe that time is on our side."

However, no matter how they view the prospect of rejuvenation, business operators and market experts are relatively consistent in saying that government support policies are indispensable for rejuvenating old brands. "We can set up a brand building fund in the state-owned assets income, further favor high-quality brands in terms of capital, and support enterprises to develop brand strategies. At the same time, we hope to make full use of the capital platform to continue to support advantageous enterprises with broad market prospects and strong brand effects to enter the capital market." Xie said.

Chen Huiquan also expects the government to favor old brands in terms of taxes and bank loans, "so that small and medium-sized enterprises have a chance to survive."

It is understood that Shanghai will issue several opinions on promoting brand building, and will set up a joint conference on brand promotion to gather the strength of all government departments to jointly promote enterprise brand building.

"Every year, about 20 old brands will be selected to focus on promotion, and support will be given in terms of capital, land and talents." Lin Yi introduced.

In addition, the Shanghai Municipal Government will build a public service platform and convenient service system to create a better production and sales environment for enterprises.

"What the government can do is to create a good development environment, but the business initiative is in the hands of enterprises. Every year, there are 20 key enterprises to promote. We will choose enterprises with certain industry influence and market potential, so enterprises must take the initiative." Lin Yi said.

Market experts also suggested that old brand enterprises should establish flexible market mechanisms as soon as possible to capture market information keenly and should not be conservative.

There is a long way to go before the old brands can revive.