Li Mingguang's UR Follows ZARA's Business Model To Expand Itself.

Name of enterprise: fast forward Latest fashion (Guangzhou) Limited

Founding date: 2006

Founder: Lee Ming Kwong

Location: Guangzhou

Financing record: in 2011, it was invested by Gobi venture capital A, and won the B round investment of Jing Lin investment in 2012.

Business mode: create local fast fashion brand, attract consumers through luxurious storefronts, rich products, fast updates and affordable prices.

In Huaihailu Road, a commercial street in Shanghai, UR's store is full of air. Gobi venture capital investors had a strong curiosity about the first time: fashionable and diverse design, from casual wear, white collar work clothes to evening dress, everything from 149 yuan to 699 yuan.

Gobi investors Quartet, only to know that UR is a native fast fashion brand in China. So Gobi venture capital initiative contacted UR founder Li Mingguang, the two sides hit it off.

In the past 5 years, UR has opened 15 branches from scratch in the first and second tier cities, all over 1000 square meters. What is rare is that when there is no advertising investment, the new store opens a profitable one, its sales volume continues to grow, and its gross profit margin is far higher than the average level of the industry.

　　 Learn from scriptures Zara Open shop

In Guangzhou to see Li Mingguang, the fashion brand "behind the man", wearing fashionable fashion, red lattice shirt is particularly eye-catching. Although he was a professional accountant, he loved fashion design from an early age. After decades of struggle in the clothing industry, he finally targeted the local fast fashion, and the inspiration came from a trip abroad.

At that time, Li Mingguang, who had a keen sense of fashion and touch, immediately flashed the opportunity of Chinese local fast fashion. "Domestic clothing is mostly high quality, high price, low quality and low price. Zara with low quality and low price also focuses on the European market, which gives us room for survival."

In order to create a brand new local fast fashion brand, Li Mingguang summed up the four characteristics of fast fashion from the Zara teacher: store must be big, product should be rich, update should be fast, and price should be substantial. "One of these four key elements is not enough." Li Mingguang said.

UR's first store was chosen in Guangzhou and heavy capital stores. In 2006, Li Mingguang took a 1000 square meter store in Guangzhou's Tianhe business circle. His devotion to store decoration is never stingy. The clothes in the shop are also fashionable in international fashion, but the price from 149 yuan to 699 yuan is very popular.

Then Li Mingguang slowly groped out a way to set up shop, such as forming a strategic partner with the hypermarket, where the shopping mall went, and where the U R went, so as to reduce the risk of location. In the past 5 years, U R has opened 15 branches in the country, all over 1000 square meters, 13 of which are direct stores, which has accelerated the expansion of the first and second tier cities in the past two years.

　　 Fast fashion UR optimization chain

Advancing into the advanced shopping mall is just the appearance of fast fashion. If there is no abundant product and quick renewal capability, it is difficult to support the sales of large stores. This is the reason why many enterprises want to be fast fashion in China, but there are not many enterprises that can really get started.

There are more than 100 buyers and designers in the UR team to ensure that there are 100-140 new shelves per week. But fashion sense is not the key. For the fast fashion oriented clothing brand, the longer the lead time (from the time of clothing design to the shelf), the smaller the profit margin. Zara is known for shortening lead time in the industry, and UR is also pushing ahead.

According to Li Mingguang, the leading time of UR is 40 days, the fastest is 10 days, which depends on the quick reaction. UR will conduct terminal analysis every day, understand the most popular and the 10 worst selling styles, and put forward the arrangement of return order, extended design and transfer. For the most popular style, in order to save design time, the existing version will be applied to the two design, and the design can be completed within 2 working days.

The traditional clothing industry advocates "dumbbell style" structure, and brand and marketing are both ends of key inputs. But Li Mingguang went the other way and broke the financing proceeds into production. In Li Mingguang's view, only by setting up factories can we make the connection between design and production more closely and achieve the goal of rapid response.

In order to put money on the knife edge, UR currently uses railway transportation and road transportation, which usually takes 3-5 days of transportation time. Li Mingguang said with a smile, if the energy efficiency is imitated by Zara, the leading time of UR can be pushed forward a few days.

　　 Guest: Huang Wenchao, head of Gobi investment office in Southern China

Fashion and speed are indispensable.

UR is a leader among these explorers. It can achieve frequent frequent updates in the season according to the market reaction, and fashion parity, so that consumers can get fashionable products and enjoyable shopping experience at a low price.

　　 Commented guest: Xie Heng, capital analyst at Wei Xi

Optimizing supply chain is the key.

At present, most garment processing enterprises in China are accustomed to mass production, and the cost of small single production is very high.

At present, the overall scale of UR is still very small. Whether it is production outsourcing or self production, the pressure of production cost will be very large, which will bring great pressure to the whole operation. Coupled with inventory and unavoidable slow-moving sales, the pressure on the cash flow will be very large. In the future development, how to optimize the supplier system, establish flexible production mode, and establish a dynamic management system for sales, inventory and production will be an unavoidable challenge for UR.

The electricity supplier mode is also a kind of sales method that UR can consider. The electricity supplier mode can reduce the time cost of store expansion to a certain extent, and can also conveniently collect and analyze sales data, and is also a means to publicize the brand. When the supply chain system is relatively mature, e-commerce can also help UR achieve rapid growth, cover a wider range of consumer groups, and make UR brand more stereoscopic.