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    There Are Two Reasons Why Clothing Brands Are Not Big.

    2012/11/6 11:37:00 25

    Amoy BrandsTaobaoClothing BrandsTaobao Women's Wear

    Jian Jiang, vice president of venture capital investment, recently published his opinions on "brand name" in different occasions.


      

    The old "Amoy brand" lives uncomfortably.


    On the DCCI investor salon, he revealed, "before Taobao grew up a large number of" Amoy brands ", but those old" brand "brands are large scale, no profits, and the development is very uncomfortable.

    and

    TaoBao

    A group of small brand enterprises that are coming up with new opportunities have great opportunities.


    What is the reason? The old "Amoy brand" got the VC investment that year, and VC investment needed the company's explosive growth in a short time. This is not suitable for many enterprises in the consumption field, especially the brand or non-standard enterprises.


    He believes that non platform businesses are not suitable for investment.

    Brand Company must have a period of natural growth.


    From the perspective of American corporate history, good brands basically have decades of natural growth cycle. These enterprises are very concerned about the operation, and the teams are slowly running in and growing slowly.

    If some brand enterprises like China have to discount, reduce prices and promote sales in pursuit of quantity, sales will indeed go up, but the profitability will go down, and the brand premium will go down. If it is bigger and not profitable, it will face a crisis.


     

    The new "brand name" method: small and beautiful


    Jian Jiang attributed the new "Taobao brand" to several major characteristics: first, it was founded around 2008, basically established at the end of Taobao traffic; second, almost no investors; third, they had relatively low dependence on Taobao's marketing resources; fourth, the personalization of shop front was generally more prominent.


    These enterprises have a narrow customer base, but on the contrary, they can lead to high price and high gross profit. Such enterprises have many sales scale in 2000~3000 million, but in the future, they may become Taobao's "small and beautiful" brand.

    Chiang said that he was very optimistic about these enterprises. They were "big and beautiful" after "small and beautiful", but these so-called slow growth enterprises without VC money did not grow very slowly, many of them doubled every year.


     

     

    Clothes & Accessories

    Why is "Tao brand" not long?


    Jian Jiang also published an article on the Internet business world.

    Clothing brand

    Why not do so in Tao? It's worth reading.


     

    His main ideas are:


    The Taobao stage is different.


    Before 2009, it was Taobao's "traffic bonus period". At that time, there were few decent sellers. In order to enhance customer satisfaction, Taobao was interested in supporting the larger sellers with relatively high quality to become "Amoy brands". After 08 years, it took great efforts to persuade a large number of traditional offline brands to enter the Amoy. At that time, as long as you are a good seller, "Xiao 2" will give you a lot of traffic resources free of charge.

    At that time, no matter "

    Amoy brand

    "Or the traditional line of entering the Amoy brand is the golden period of growth.


    09 years later, as Taobao's trading volume soared year by year, Taobao's sellers and goods grew much faster than Taobao's growth rate.

    The result of the rapid growth of sellers competing for limited traffic prices is that the average purchase cost of online passenger traffic has increased rapidly, even increasing at a rate of half a year.

    Taobao will not sign a traffic price contract with a brand seller, and sellers can only bear the pressure of uncontrollable traffic price increase themselves.


    Unlike the mature retail brands in Europe, America, Japan and South Korea, the apparel brands under the Chinese line are still in the middle stage of development. During this period, the brand only created "popularity", most of which did not complete the "loyalty" and "love degree" shaping.

    In other words, most customers only go shopping by feeling when they are "wandering". Few people take the initiative to look for a brand's clothing, and are willing to pay a higher premium because of their love.

    The lack of loyal repeat customers leads to the pformation of the flow of customers.

    From this point of view, there is no essential difference between the brand that emerged early in the Taobao traffic dividend period and the traditional line brand, but it has a disadvantage in popularity.


      

    Sellers profit margins squeezed


    In order to increase paction volume and conversion rate, most Taobao brand sellers, regardless of whether they come from Amoy or Amoy, are mostly promoted by discount sales.

    This led to the original price of Taobao is not high, the seller's profit margins have been further compressed.

    One side is the pressure of discount sales, the other is the rising flow purchase cost, resulting in a lot of profits within the market.

    Meager profits make it afraid to let go of buying traffic, and the more you buy, the more you lose.


    Looking at the European and American clothing brands, there are only two ways to look at it roughly.

    The first is to maximize user preferences and premiums, so that even if the scale is small, it can maintain a higher net profit margin and moderate growth rate.

    Recently, there are many "two generation" Amoy brands represented by Hua Sheng Ji. This is the way to seek "strong" first, then seek "big", from childhood to beauty to beauty.

    The second way is to be a supply chain company, guided by the efficiency advantages of large-scale supply chain, and take the way of branded apparel retailers. The most typical representatives in this regard are Zara and UNIQLO, but the real achievement of this road is very difficult and requires strong operational capability.

    From a worldwide perspective, retailers who really regard supply chain and operational efficiency as core competitiveness are few.

    So for the Amoy sellers, the first road is more realistic than the second way.


    And those traditional bigwigs who blindly believe in the power of the electricity supplier can take up their illusions. The golden age of traffic has passed. No matter what the online and offline businesses are, if they want to develop further, they must reconsider their strategic thinking, brand positioning and market anticipation on the consumer's standpoint.

    Companies in the retail sector, "strong" and "fast", are hard to get together.

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