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Rising Cost Of Foundry, China'S Rapid Development Of Fashion, Fear Of "Brakes"

2013/5/8 20:40:00 23

P, a big sale after another, has already made Miss Tian and her boyfriend lose interest in the brand of JACK&JONES (Jack&Jones).

In the past year, JACK&JONES hit 50 percent off, and they would all rush to buy it like crazy.

But at the beginning of this year, the discount of some single products had been reduced to 2~4 discount in a large sale of JACK&JONES held in a department store in Shanghai.

despite the fact that the new season hardly ever takes part in sales promotion, since last year, the discount of JACK&JONES and its sister brand Only, VeroModa and Selected over the same season has become more frequent.

a professional buyer told reporters that recently, he saw in the central provincial capital city that almost every department store and shopping center were making a sale of the bestseller, which started 50 percent off, and a few cross season payments were as low as 2~3.

"crazy discount, mainly because the inventory pressure is very large."

A senior executive who left the company recently told reporters that since 2011, the company has begun to strengthen its direct operation and gradually resume the franchise of franchisers. Although the performance has gone up, the gross profit is decreasing, the inventory pressure is also increasing, coupled with the historical low level of the whole industry, the demand for terminal is not prosperous, and there is no discount, so it is difficult to alleviate the pressure of inventory.

high speed development or stop

the above four brands come from Danish well-known international fashion company Bestseller group. In 1996, Bestseller entered into China's wholly owned subsidiary fashion fashion, and introduced four brands of Only, Jack&Jones, VeroModa and Selected.

Among them, Only is a denim style dress, Jack&Jones is a cowboy style of men's clothing, and VeroModa is the main city style women's clothing brand, Selected is the business men's wear route.

Bestseller official website shows that these four brands currently cover more than 300 cities in China, with the number of stores reaching 6100, of which the number of JACK&JONES stores is the largest, 1748.

it is noteworthy that in the 2011/2012 fiscal year, the net pre tax net profit of Bestseller decreased by 48%, which was only 161 million euros, but the sales and profit data of China were not included in the accounts of Bestseller, and could not be found.

"this is red in the wall of the wall."

In recent years, these four brands are not strong in Europe, but are developing rapidly in China. The four major brands have strong complementary and integration capabilities, and the speed of updating is amazing.

Yang Dayun, President of China Fashion Group UTA, who has systematically studied the fashion fashion, told reporters that the brand introduced by the bestseller was the fastest fashion brand that came to the Chinese market the earliest. It was also the fastest fashion brand to achieve "global design and Chinese Revision" and seized the best development period in the Chinese market.

for example, when Only just came in, it happened to have a similar position in the shrinking period of the women's wear brand. In order to increase popularity, the major shopping centers used Only to fill the vacancy.

And JACK&JONES has an advantage in style. The street culture style of men's clothing was the first in China, giving consumers a fresh look.

"two or three years ago, the annual sales volume of its four brands has exceeded 20 billion yuan. At that time, it was the largest in China's fast fashion" a target= "_blank" href= "http://www.91se91.com/" clothing "/a" category.

Last year, the sales volume of the four brands exceeded 30 billion yuan at one stroke.

The former chief executive told reporters that although sales of "JACK&JONES" have been repeatedly seen at a discount, their sales have not gone down. However, due to the higher inventory rate in the current quarter, the profit rate has not been able to decrease compared with that year.

"Nevertheless, JACK&JONES's profit margin is still far higher than that of the fast fashion brands such as the United States and Semir."

Said the man.

P, who had worked in a JACK&JONES generation factory, told reporters that the price of 499 yuan a pair of jeans on the market was two or three years ago. The total cost of fabric, accessories, tag and processing fee was less than 50 yuan, and the loss of the brand to the factory was about 2/1000 or 3/1000, that is, 1000 or 2 items or 3 defective products.

So no matter how much discount, the brand is still profitable.

the cost of subcontracting is increased .

"the development of bestseller in China belongs to the overdevelopment of overdraft".

In particular, the growth rate of two brands of Only and VeroModa is much faster than the average speed of the market, and backlog and inventory are unavoidable.

Yang Dayun said, taking JACK&JONES as an example, positioning in the mass brand, consumers demand higher prices.

Therefore, the brand has no room to rise in price, but it can only be low.

of course, there are also passive reasons for discounts.

The top executives told reporters: "we are lowering prices for competing products. Are we going to drop?" he said that since the second half of last year, the competition has been fierce. Some of the second-line brand new products have hit 60 percent off, which has hit the whole market, and the discount has become more and more intense. This undoubtedly causes some harm to the brand itself.

in addition, products such as Jack&Jones and VeroModa have also been exposed to quality problems for several times, such as the color fastness is not up to standard, and some harmful residues are exceeded.

the industry believes that the attention of fast fashion brands to productivity, channel and terminal market far exceeds the importance of product quality, plus more than 90% of its brand is in China's foundry production, and its supply regulation also can not keep up with the speed of brand development, so the problem level is not poor.

because the cost of foundry is higher and higher, the demand for updating products is faster and faster.

In addition, the right to speak in behalf of the industry and Commerce and franchisees are very strong, but also lead to substitution of foundry and channel, which has an impact on quality.

the agency contract between the general brand and the franchisee is signed one year, and the brand is open for the early development and opening up the three years. However, the contract period of the agency contract is only 3 months. In terms of subcontracting, the demand for compensation for the products with high quality is very high, and the profits are stuck.

above executives said: "because of the high cost of manufacturing in China, the three or four years ago began to try to pfer some foundry links to Southeast Asia. For example, the processing cost of Bangladesh is now 40%~50% for the domestic market, which can save a lot of money."

P executives also told reporters that last year, the foreign suppliers who had just taken over the supply chain were somewhat different in understanding foreign and domestic supply chain management, which may cause instability in the supply chain system in the short term.

electricity supplier "sewer" /p >

The reason why P is so strong is also closely related to its "no shopping mall" model in China.

Its brand has almost become the "standard configuration" of large shopping malls in China. Almost all large shopping malls wishing to cover the market of young casual fashion apparel will be invited to admission.

"for example, there is strategic cooperation between Wanda and bestsellers. Wanda stores and thousands of stores will open up new stores that will give all brands a low discount."

The executives told reporters that bestsellers never advertise, but put the money into shop and shop decoration.

In the brand layout, the brand does not belong to different brand stores in different locations, but as close as possible to each brand store, to consumers strong impact.

however, with more powerful international competitors such as H&M, ZARA, UNIQLO and other fast fashion giants in China becoming more and more widely covered, it also feels great pressure.

at present, the electricity supplier is becoming a new channel for bestseller pformation, and JACK&JONES is a typical representative.

Last year, "double 11", the four brands of the group reached a total turnover of 208 million yuan, of which Jack&Jones turnover amounted to 127 million yuan, topping the list.

Jack&Jones electricity supplier official told reporters that in recent years, Bestsellers have attached great importance to the electricity supplier channel.

In the daily electricity supplier channel, about 1/3 goods and retail entity shops are the same, and 2/3 goods can be distributed.

In the days of "double 11", nearly 50 operators of the core business of electronic commerce will be prepared two months ahead of schedule. Only 300 customers will be assigned to customer service, and the staff responsible for warehouse delivery will reach 1500 people.

Jack&Jones positioning itself is also suitable for electric business. Yang Dayun analysis shows that on the one hand, its target consumer group is between 18 and 35 years old, just in line with the average age of Chinese netizens. On the other hand, its price is originally low in the middle end, suitable for network marketing, and online can also expand the channels that can not be covered under the line.

reporters log on to JACK&JONES Tmall official flagship store and see that their daily discounts are also quite large.

The new product is 10 percent off package postage, the rest is divided into 30 percent off districts and 50 percent off districts, of which the "Juhuasuan" spring and summer festival is 3 fold. We can see that the electricity supplier is also one of the indispensable channels to clean up inventory.

of course, some people also criticized JACK&JONES and other brand oriented e-commerce models, especially from the perspective of ultra-high return rate and refund rate.

With such a large sales revenue on Tmall, why does it not build its own B2C channel and bind Tmall? Is it not able to keep up with its network information system?

"the whole electricity supplier system is in a groping stage. It is not easy to find a balanced way quickly."

The executives said.