Urban Beauty Sold 4 Billion Last Year. What Makes It Profitable?

In the downturn of the apparel industry, one company added more than 1000 stores in 2014, with a total of more than 7000 stores, 78 days of inventory turnover and 1 million 160 thousand yuan a day, with a market value of more than 10 billion Hong Kong dollars.

On the Internet,

For its endorsement of "exploding milk" advertising detonated the topic, now added Huang Xiaoming endorsement men underwear + running male cooperation.

This is it.

Its founder and chairman Zheng Yaonan was a security guard for WAL-MART 20 years ago.

However, as a media report said, "how did Zheng Yaonan start from a small security guard in a supermarket? It took only 20 years to make a history of the struggle of a listed company owner, not a key point.

The point is, when the domestic apparel industry is sad, the physical stores have already been sold.

At the time of the impact, a city beauty selling underwear has opened more than 7000 stores in more than 330 cities across the country, and the speed of opening this shop is growing at the rate of 1000 per year.

Wonderful one: others close shop, it opens shop.

It is no longer one or two years for clothing enterprises to close shop, and it is still continuing in 2014.

Data show that in 2014, the number of Baleno stores decreased from 3820 to 3432 in the last fiscal year of 388.

2014 in the first half of the year, 73 stores were closed, 134 were in the first half of the year, 53 were in the card shop, and 46 were in the shop.

In the men's clothing listed companies, the seven wolves who had the largest number of stores actually closed 505 stores in 2013.

The situation of women's clothing enterprises is not so good, and its Esprit owns 38 brands in 2013.

Compared with Giordano, such as leisure brands and seven pack wolves and other formal brands, Anta, PEAK, and 360 degrees represented a number of Chinese sports brands that have gone through the baptism of the tide shop several times ago.

Lining, Anta, XTEP, 360, PEAK and other sports brands close to 3000 stores, of which PEAK and Lining have reached 1000 stores in 2012.

And the urban beauty 2014 financial report communication will show that the urban beauty takes the market penetration low North China area and the development potential high three or four line cities as the main battlefield.

By the end of last year, 980 new franchised stores and 256 self operated stores have been added. Now it has 6049 franchises and 977 self operated stores, and the proportion of franchised stores is close to 90%.

In 2014, the sales revenue increased by 37.4%, up to 4 billion 8 million yuan.

Wonderful two: an ant eating elephants

In 2015 and March 2nd, the city beauty bought the high-end underwear brand Ordifen for 92 million yuan.

According to the research report, Ordifen ranked fifth and seven in China in 2014 in terms of retail sales of bra and women's underwear.

In the past, high-end underwear brands represented by Ordifen and admiration were almost the standard of a second-class mainstream department store.

After the urban beauty and the popular brand, the starting point of the choice is the three or four line city and the county-level store.

By the end of last year, urban beauty stores had been allocated to 330 prefecture level cities in China, and even to more remote Township markets.

But the energy of these small shops is amazing.

According to the report of Sullivan, according to the total sales volume of China's underwear industry in 2013, urban beauty accounts for about 2.8% of the market share of the clothing industry, which is almost three times that of the second largest Chinese practitioner, an Li Fang.

Zheng Yaonan said: "through the Shanghai Ordifen's sales network and well-known brands in China's high-end clothing market, so the group is expected to expand its market penetration in China's personal clothing market."

Wonderful three: underwear brand inventory and quick response supply chain

The clothing industry is most afraid of inventory backlog, and the turnover period of goods also represents the barometer of enterprise operation.

Yu Zhenqiu, vice president and chief financial officer of urban beauty, said that the number of days of inventory turnover in urban beauty is 78 days.

And its SKU has more than 11000 or more than 1000.

According to its introduction, in the industry many underwear colleague, the commodity turnover time is as long as 200 days.

According to Yu Zhenqiu, when the franchisee makes two spot purchases per week in its "Taobao" backstage system, from the moment of clicking the order, the store managers will receive their orders within one week and express them directly from headquarters to stores, which is comparable to Taobao.

Moreover, for franchisees and agents, they basically do not need to set up warehouses, because the goods of 65%-70% are purchased on a weekly basis, and all goods are hung up for sale at the store.

Under the surface of these wonderful flowers, what is the business mode of urban beauty?

In essence, it is a single store franchise mode. However, in the case of single store franchisee's "not doing much", the beauty of the city relies on the highly praised Lin Chiling and Huang Xiaoming to endorse the air advertisement and cooperate with the ground channel to make the wind and water rise.

The secret of "wonderful flowers": parity underwear positioning

The urban beauty who positioned the parity underwear market is more like * the "pig on the draught" than the other garment segmentation industry.

On the one hand, it is the rise of the overall underwear consumption market: according to Frost&Sullivan, a consultancy, in 2014, the consumption of China's underwear market was as high as 20 billion dollars, and this year's expected growth rate is around 18%.

On the other hand, the brand of the market is highly dispersed, and there are more than 3000 brands and manufacturers in the market.

According to the data given by urban beauty, the market share of retail sales in 2014 accounted for only 2.9% of the total market share.

Under this background, the urban beauty who has a price of 80-300 yuan and the price increase rate is only 2.5 times -3 times has chosen a mass market with "small profits but quick turnover" and rapid rise.

Xinhua quoted industry reports as saying that the total sales revenue of China's underwear market increased from 113 billion 700 million yuan to 194 billion 400 million yuan over the past 2009-2013 years, equivalent to 14.4% of the compound annual growth rate of the same period.

Among them, compared with the low-end or high-end market, the middle end mass market has higher growth potential, occupying more than 50% of the market share.

China's local underwear industry has long been on the scale.

This industry is clustered, including Shantou, Guangdong, Fujian, Shenzhen, Shanghai, South China, Zhongshan, Siu Lam, Shenzhen Gongming, Zhejiang Yiwu and so on.

Therefore, becoming a "pig on the draught" is only the foundation.

Why is urban beauty taking the lead?

According to his own founder Zheng Yaonan's own summary, there are four points: first, the mode of OEM, two is joint research and development, three is the rapid reaction of the market, and four is the information system.

Confined to space, we only focus on one of its major features -- the establishment of flat channel mode.

The secret of "wonderful flowers": flat channel

Compared with the general agency system of traditional clothing enterprises, the rise of urban beauty depends on the franchise system.

"Many traditional clothing brand channels constitute a multi-stage franchise mode, but the inefficient distribution system increases the cost of brand channels, but also seriously weakens the market competitiveness of these brands."

A senior securities analyst said.

However, the drawback of franchise system is that when a franchising store is too large, a store problem will affect the reputation of the whole brand.

At the same time, the management and sales guidance of franchising is also a problem.

However, city beauty shows that the requirement of flat channel does not mean that the brand must insist on direct operation.

First, diversify shop location and push community stores.

Rooted in the mass market and rising in the three or four line of urban beauty, its shop formats also have very localized characteristics, mainly from 30 to 50 square meters of small shops, which are different from 150 to 200 flat clothing and sporting goods enterprises.

At the same time, Yu Zhenqiu, vice president and chief financial officer of the company, said: "the investment cost of big shops is relatively high, and large stores can only be opened in commercial and pedestrian streets.

But in addition to these two formats, the urban beauty shop has opened the store to the community, pportation hub and school.

In fact, another advantage of this layout is that these stores are like the "last mile" function of e-commerce, which is close to consumers.

At the same time, the function of fitting is also indispensable for underwear brand.

In an interview with reporters, Zheng Yaonan said that more opportunities were given to him under the new normal because many people are afraid to start shop now and fear that they will not make money.

"The business model of urban beauty is low in investment cost. It costs about 300 thousand to invest in a store, but the rate of return is high. The cost can be recovered in 12-18 months, so we will open more stores."

Second, strong control of stores.

Many franchisees, because the franchisee's confusion and difficult to control, finally fell on the threshold of thousands of stores.

In the face of widespread distribution in more than 300 cities and regions of the country, how to control the franchised stores, especially franchisees?

"The company directly controls the retail network, manages the franchisee according to the same pattern as the direct store, implements flat business mode, and does not involve distributors or separated multi tier franchisees.

If they are compared with sporting goods, they have provinces and generations, and there are franchisees under the province, and there are still small franchisees under the franchisee, and only one layer of urban beauty.

We are a single store franchise mode.

All sales systems, monitoring and deliveries of a single store are directly responsible for the headquarters. "

Yu Zhenqiu, vice president and chief financial officer, said (specifically "control" model, see related links).

Third, futures + spot purchase mode.

The spot purchase refers to the system of city beauty ordering weekly and courier goods to the store every week.

In order to stimulate sales, urban beauty imitates Zara, H&M and other fast fashion practices. New models are launched every year, and 75% of the sales in 2014 are new.

According to Yu Zhenqiu, "successful marketing" reporter, each quarter is ready to launch new products, but for mainstream products such as bra, underwear and so on, we can only see the mode of goods can not be ordered, for some seasonal products such as home clothes, thermal clothing, bottompants and so on, you can place orders at the order meeting.

The order will be booked on the spot as "futures", while the shopkeeper will go back and place the order in the store system weekly according to the supply of the company, and make a reservation for "spot", of which the spot booking takes up 65%-70% of the total quantity of the franchisee.

According to their needs, each store orders the company through the software backstage in the form of "Taobao". The contents of the order vary from place to place, and from time to time.

Every week, the company opens two order platforms, and each order in stores takes only about a week (including logistics time) to arrive.

This spot mode poses a challenge for urban beauty.

In the initial stage of the system, "there are more than 1500 stores ordering us every day. We order and deliver almost every day."

Its chief information officer, Sha Sha, said.

For Direct stores, city beauty launched an automatic replenishment system in early 2014 and was installed in 977 self operated stores by the end of 2014.

This system is modeled on Zara, H&M and other fast fashion orders to get goods, the original people to take goods, into the system according to the volume of goods, hot sales and other parameters of the automatic order and replenishment, the system directly on the line of urban beauty overall inventory turnover days from 85.2 days to 78 days.

"We have done a lot of calculations and found that the commodity structure of the stores has been greatly improved," he said.

For example, we originally need a store of about 20 thousand yuan to support a day's sales, and now only 10 thousand yuan of inventory can be achieved, this is because the store's commodity structure is more reasonable.

According to Yu Zhenqiu, in order to deal with this spot system, the urban beauty usually stocked the stock products in the form of "334".

30% of them are raw materials in raw material warehouse (such as cloth, nylon and so on), and three become semi finished products in the foundries (lace, shoulder straps, cups, etc.), and four become spot goods in the urban beauty store.

Because of the similarity of underwear products, if the product is sold in general, this "334" model can also use nearly 60% raw materials or semi finished products as other series products.