The Road Of Private Brand Of Clothing Business

Clothing products e-commerce is a rising star in the Internet industry. According to the 2011 Research Report on China's apparel online shopping industry, the clothing business has been developing rapidly since 2010. Its market scale was 105 billion 240 million yuan in 2010, an increase of 111.2% compared with the previous year, and in 2011 it reached 204 billion 900 million yuan, an increase of 94.7%.

According to projections, by 2014, China

The overall scale of the e-commerce market will reach 519 billion 500 million yuan, and the proportion in the overall e-commerce market will reach 27%.

With the development of time, many electric business enterprises have tested the water clothing field. Dangdang and Jingdong mall have heard the news that they are ready to sell their own brand clothes.

Zhang Dazhi, a consultant in management strategy, believes that in the traditional industries, clothing products with relatively high profits have not yet got rid of the state of losing money.

Looking back on the development of related enterprises, it is easy to see that the main reason for the current situation is "impure purpose, lack of innovation in business mode and light company".

Dangdang behind its own clothing brand

It is understood that Dangdang has lost its net loss of $36 million 300 thousand last year since its listing, due to its endless price war with Jingdong mall. Its losses far exceeded the US $30 million 800 thousand in 2010.

I would like to ask in the capital chain of the electricity supplier environment, Dangdang when the launch of its own brand plan will bring to yourself what good?

Zhang Dazhi: first of all, loss and capital chain tension are not a concept. Some electricity providers are not "short of money" but are not profitable.

Dangdang makes its own brand clothing, while improving its product line, it can add weight to his profit, and the profit of clothing is far higher than that of books.

According to Li Guoqing, Dangdang's own brand is far from trying to play a small game. The size of its layout includes three categories of clothing, home textiles and home furnishing, and three thousand or four thousand kinds of specifications.

"Only clothing, it will involve underwear, shirts, T-Shirts, sweaters, trousers, sweaters, jackets, windbreaker and other different categories, both men and women wear; and home textiles, will involve bedding, bathroom supplies; as for household products, will involve DIY furniture, kitchen supplies, daily life, hardware and so on."

While making the above statement to the outside world, Li Guoqing also launched Dangdang's independent clothing brand plan: "there are three different areas of clothing, shoes, bags, and so on. One is the basic fund, the basic price is the lowest, the cost is the lowest, and the gross profit rate is very good.

The second is the classic style. The style remains unchanged for many years and is not afraid of backlog.

The third is fashion money. ZARA is a representative. Fashion needs to react quickly and quickly. The first time it is finished, the fashion will soon be over, which will easily cause inventory backlog.

To be a private brand, Dangdang will certainly not choose fashionable money. Instead, it will do the basic and classic style of the high-end, and take the route of GAP and UNIQLO. This will help control the cost and win the scale by volume.

It can be seen that as early as a year ago, Dangdang had already made a profound plan for "doing its own clothing brand".

Will the development strategy of Dangdang's own brand be different from its big platform strategy? Will its platform advantage help its free brand's opening?

Zhang Dazhi: the platform does not conflict with its own brand, just like closed and open is not absolute.

The success of Dangdang's platform is based on its many years of customer accumulation.

But in some ways, it will also choose the way of opening up. For example, we have opened a channel with Gome, and in some ways it will choose the way of its own brand, for example, the relatively high profit and relatively low threshold service area.

It can be said that what kind of strategic choice Dangdang makes has a close relationship with its brand recognition, operation cost and customer recognition. The final choice is the result of the game between the merchant and the market.

In fact, before Dangdang developed its own brand clothing, there were bets on its own brand.

It is not necessary to say that, as far as it is concerned, the products of the cosmetics business, such as the Internet, and so on, are also regarded as Brand Company, rather than e-commerce companies, just like Fan Cheng pin.

It is understood that only in 2011, Le bee network launched Jplus, Jmixp, Siqi, Kevin and other four brands, at present, Le bee net own brand accounted for 40% of its total sales.

Today, Le bee network announces an investment of 600 million yuan to support itself.

It plans to build about 10 new private brands this year, and the category will expand to the clothing industry.

At the same time, jumei.com CEO Chen Ou also said that the exploration of its own brand is the future trend of the electricity supplier.

"One is the higher profit rate, the two is the supply chain controllability."

Chen Ou even believes that the cosmetics own brand will probably create an analogy like "Ma Huateng creates instant messaging era" and so on.

Does it mean that it will face fierce competition from many vertical clothing suppliers? Will the Dangdang have competitive advantage in the competition of garment prices in China?

Zhang Dazhi: there are many market segments in clothing. When Dangdang net cuts in, most of them will choose products that are simple in style and diverse in color.

PPG and everyone from the men shirt started to do business is the reason.

Dangdang's existing customer base and its mature operation system are all its competitive advantages.

In addition, the advantages of Dangdang are also reflected in the overall operation advantages of brands, traffic and more resources from distributors, suppliers and channel providers. Such an open and integrated platform is to compete with Jingdong and Taobao in the future instead of making vertical B2C private brand developers with different profit models.

Once Dangdang's own clothing brand is on the market, it means that it will face fierce competition from many vertical clothing business operators.

However, Dangdang's own brand has also failed attempts. The Bond e-commerce analyst Chen Shou Shou has pointed out that as early as 2007, Dangdang once modeled on the fan mode, launched the brand of the Bond Street, but soon after, it was forced to go offline because of the gloomy market reaction.

Dangdang seems to have been caught in the shadow of the price war before it can't be seen. It has painted its own brand positioning at high quality and low price.

According to the investigation of Dangdang's own brand Bond Street shirt, there is no channel fee, no advertising fee, distribution with books, unconditional return, high quality and low price, this is Dangdang Bond Street shirt.

So far, it has started its own business.

The PPG of the electricity supplier road has long been closed down, and after all, it has been unable to find a clear profit point after advertising and low price quickly grabbed the market share. The combination of clothing and electricity providers should not have found a precedent for success.

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Is it difficult for clothing suppliers to create their own brands?

So far, from PPG to fan Ke Cheng pin to Marceau Marceau, as you said, there is no precedent for clothing business to succeed in its own brand.

Please illustrate separately the reasons for the failure of the clothing business enterprises, such as PPG, Fan Cheng pin, Marceau and Marceau, etc.

Zhang Dazhi: PPG, founded in 2005, integrates e-commerce with traditional retail businesses and relies on call centers for sale.

Soon, its low cost bundling strategy has become a dazzling new star for online men's clothing direct selling websites, which makes consumers feel that "even if products are not good, they will not lose where they buy", thereby stimulating their initial purchase behavior.

Accompanied by huge media, TV media advertising fees and celebrity endorsements, PPG reached the peak of his career in 2007.

Even at this time, the company did not put the customers first. Online complaints about products such as rough workmanship, shrinkage and untimely returns were all compared.

PPG, which lost the trust of its customers, increased the scale of advertising investment with cheap products.

In January 2010, PPG was sentenced to economic compensation by the Shanghai district court. Its bank's 1 million 800 thousand deposits were frozen and the company's surplus materials were moved away.

"DELL of the clothing industry" fell to the ground, because they have always ignored the development concept that DELL computer is always serving customers as the core.

In addition, PPG once made a plan for IPO after attracting venture capital, and later it felt that it was solely for expansion.

Investors need companies to list and cash in. The founders want the company to expand quickly and occupy the market.

It can be seen that at present, a considerable part of the clothing electric business is still the old way of website operation, that is, the investment of building station and listing.

After entering into venture capital, it also requires rapid expansion to occupy market space and reach a certain scale, and then packaging will be listed.

And the rapid expansion of the electricity supplier naturally can not take account of profits, operation depends entirely on investment support, once the consequences of the capital chain rupture are unthinkable.

Compared to PPG, van Kee pin and Massa Marceau are still on the road. They still can not talk about the outcome of the failed clothing business. But the lesson of PPG failure has also sounded the alarm for them. That is, products and services are always the key to successful operation of the clothing business.

If these two kinds of things can't work, the clothing business will spend more money to advertise, and it will not bring positive effect to them.

In terms of users, why do most of the electricity suppliers prefer to focus on maintaining their regular customers when they are training new customers?

Zhang Dazhi: more than electricity providers do this.

China's mobile operators, whether mobile or Unicom, focus their marketing on developing new customers every year.

Now, from the perspective of the entire electricity supplier industry, there is no doubt that the buyer's market is formed. The homogenization degree of products is getting higher and higher, and the life cycle of products is becoming shorter and shorter.

And online store marketing strategy and means are also very similar, such as Taobao's through train, spike marketing and so on.

Nowadays, consumers are becoming quite rational, so it is very important for them to carry out effective maintenance and after-sales service to their old customers.

It is worth noticing that in the actual marketing activities, quite a few of the shops pay attention to developing new customers, but ignore old customers, or do not know how to attach importance to old customers.

The management center of the shop is placed before and after sale, resulting in many problems that can not be solved in time and effectively in the after sale service, thus resulting in a large number of old customers losing.

However, in order to survive, shops must constantly replenish new customers.

This is the famous funnel principle.

Today, there are 10 losses and 10 more. On the surface, sales performance has not received any influence. Actually, the cost of publicity and promotion to win over these old customers is obviously much more expensive than maintaining old customers.

Considering the degree of return on investment, it is very uneconomical.

Clothing electricity supplier "light assets" company

Please give an example of what kinds of business models are currently adopted by the clothing business? What are their advantages and disadvantages?

Zhang Dazhi: now it seems that the clothing business providers mostly adopt two business modes, one is investment type, the other is operation type.

The former relies on VC, while the latter is mostly converted from traditional clothing to online sales.

The advantage of the investment type is that it can grow fast and can only be replicated and grow fast only when the funds are sufficient. That is why PPG can cover the whole country in the short term.

But the problem is that "burning money" is hard to make profits in the short term, and most of the domestic electricity suppliers are not profitable.

The operators are mostly from the traditional clothing business and do not introduce VC, so there is no great pressure for rapid expansion.

The advantage is that it can be more stable, but the shortcoming is that it is not growing fast enough.

Personally, I prefer the operation type of electricity supplier because burning money is not a long-term solution. Any enterprise should aim at making profits, which is also in line with the interests of customers, investors and the three parties of the electricity supplier.

No matter which way it is adopted, the mode of electric business relies on the display of the front end website to attract customers, and the back ends cooperate with corresponding warehousing and logistics.

As the pattern is fundamentally the same, homogenization is also very serious, the expansion of business operators and seize the market space, so the electricity supplier enterprises can only rely on increasing advertising efforts, improve services, reduce product prices.

In terms of advertising, VANCL once claimed innovation and adopted the way of sharing, that is, using the advertising of relevant websites, according to the way of sales distribution.

This method seems to be very innovative, but it is actually the most commonly used mode of Internet Co advertising. In terms of service upgrading, customers feel the "30 day unconditional return" and "on the spot try", which is at the cost of losing 5% to 7% profits. The last move is also the most effective move, that is, the price war.

From 29 shirts to 59 pieces of canvas shoes, although sales are large, how much profit this business can bring to businessmen has always been a question.

In addition, the image of clothing business to consumers is still low, how many loyal users this impression can retain, and how many users recognize the brand of e-commerce is also unknown.

An electricity supplier once said, "now the company has large plates and strong profitability.

It is not yet the time to profit.

You see, I have so many single goods now, the profit is very substantial if I add 1 yuan each.

I think most of the people do not realize that before the formation of brand, customers' demand for ordinary consumer goods has strong elasticity, and the cost of each additional 1 yuan will lose quite a lot of customers, and consumers have high price sensitivity.

It is said that Dangdang is still in the domestic market after the listing and financing in the United States, the old way of price war is based on the above considerations.

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The industry has a view that the clothing business is "light assets" company? Do you agree with this view? Why?

Zhang Dazhi: I don't agree with you.

"Clothing business is" light assets "company, but the foreground interface (website) is relatively light, background production, storage and pportation links are still not light, the operation mode determines the electricity supplier company is not light at all.

Therefore, clothing electricity providers are not universally recognized as "light assets" companies, besides servers, personnel and operating expenses, they also include warehousing, logistics and distribution.

And "no shop" is only for the customer interface, it is worth noting that many of the electricity providers have been planning under the "next step" under the "offline experience shop", in a sense they become very heavy.

"Light assets" is mostly a concept for clothing business.

In addition to selling front desk from the Internet to the Internet, other links have not decreased.

In particular, the purchase and storage and pportation of customers after a low price occupy more resources of the company. When the latter third party logistics can not meet the delivery time and after-sales service requirements, the electricity supplier can only be forced to build its own warehousing and logistics. Jingdong and VANCL have built their own warehouses. Jingdong has built its own logistics and VANCL has also set up such as Feng Da express.

Although the Internet can provide more accurate customer supply and demand information for the enterprise, thereby greatly improving the turnover speed, but it is impossible to achieve zero inventory of clothing, only the procurement volume is slightly larger than the volume of shipments, otherwise it will affect the customer purchase experience because of the loss of goods.

Even if the provider of the platform only provides some resources support to the incoming merchants, from this point of view, there is no "light" company in the clothing business.

At the same time, as the category increases, the electricity supplier is also becoming "heavy".

In the early years of VANCL, she once said, "we don't make women's clothes!" later, it was developed into a website to provide all kinds of clothing products due to competition requirements.

The display of goods on Internet websites is unlimited. More than one commodity or category is more than a few pages on the surface.

But behind the stock storage, logistics and distribution doubled the pressure on the electricity supplier.

In addition, the level of management can not be expanded rapidly with business, which is very easy to cause problems.

Taking into account the diversity of customer needs and the characteristics of online and offline stores, some of the garment manufacturers who started out from the website are also preparing to set up their own experience stores. We can imagine that the high rent, labor cost and management mode will create new challenges.