Why Are Costumes So Expensive?

At the moment is the season of clothing, the price of clothing in the store is often thousands of yuan, and the problem of the high price of clothing has attracted the attention of many consumers again.

However,

Affordable price

Mid October is exactly

During the season, brand new products were launched in the market, but new products were also launched.

On the weekend, reporters found that Baleno, broadcast:, ONLY and other brands began to offer new products for autumn and winter wear.

Why are these new brands listed on sale? "It seems to be the promotion of profits, in essence, is the blind pricing of products, trying to lure consumers through small temptation."

Cheng Weixiong, general manager of Shanghai Liang Qi Brand Management Co., Ltd.

Under the premise of the brand name system of clothing brand, the demand is not good - the sales side discount - the brand business increases the price, and forms a vicious circle.

In this regard, CIC consultant light industry researcher Zhu Qinghua acknowledged.

According to his analysis, at present many Chinese clothing brands do exist in the problem of high price.

In department stores, brand clothes often cost thousands of yuan, which has exceeded the purchasing level of more consumers.

What is the logical relationship between the new discounts on clothes and the high price of clothing brands? Zhao Ping, deputy director of the Consumer Economics Research Department of the Ministry of Commerce and consumer analysis, said that the discount sale is an important way to deal with the reduction of traffic volume and the decrease of sales volume.

At present, the entity store mainly adopts the way of joint point deduction, so the discount itself does not lose much to the physical store, and the loss is the brand business.

therefore

In order to reduce their losses, the factory price is set higher.

Moreover, in order to ensure that the brand itself has a certain profit margin when the product is discounted, the brand has to take the high price as a coping strategy.

It can be said that this is an inevitable result, so that clothing products can be sold at the original price.

According to Zhao Ping's analysis, the demand is not good - the sale end discount - the brand business increases the price, this has formed a vicious circle, of course, this is under the premise that the clothing brand adopts the agent alliance system.

In a shopping mall in Haidian District, Beijing, Ms. Zhang told the Chinese Commercial Daily reporter, "although a discount, a jacket is still thousands of dollars, and I feel that I can't afford to buy clothes anymore."

Indeed, the price of clothing consumption in China has increased considerably since the beginning of this year.

According to the statistics released by the National Bureau of Statistics (CPI), the average cumulative increase in clothing in 1-9 months was 2.9%, of which clothing, shoes and clothing processing services increased by 2.9%, 3% and 5.5% respectively, much higher than the average increase of 1.4% in CPI.

In Cheng Weixiong's view, a lot of local popular brands call poor business every day, and all of them are homogeneous products that can be replaced. However, the high rate cost plus price method is adopted every year. This violation of the laws of the market brings about not only the low reputation of the brand, but also the departure of consumers.

As a matter of fact, clothing products such as shopping malls, shopping centers and other traditional channels have been more and more rejected by many people.

"Originally thought of going out shopping at the weekend to buy a coat, a look at the price, or online or purchasing it," for the high prices of brands in the mall, another consumer ho ho also failed to return to online channels.

In fact, compared with foreign countries, the problem of high price of clothing products in China has existed for a long time.

Earlier, there was an institutional comparison of 500 clothing brands between China and the United States, and found that the price of clothing sold in China was about 70% more expensive than that of the United States and the 50 countries.

According to the China Commercial Daily reporter, take the ordinary jeans for clothing consumption as an example, the price of domestic jeans is generally more than 200 yuan, while the price of American jeans is only RMB sixty or seventy yuan.

Pain of multiple links

After investigation, the China Commercial Daily reporter found that the huge difference between the terminal price of clothing products and the cost of raw materials has become a major factor in the high price of clothing.

In analyzing the composition of clothing products to China Commercial Daily reporters, Zhu Qinghua said that the cost of raw materials and labor in the manufacturing sector actually accounts for only about 15%-20% of the sales price of clothing terminals in China.

In this regard, Chen Kun, executive director of Suzhou fine garment clothing Limited company, said that the problem of high price in the clothing industry can not be generalized. Different brand positioning has different emphasis on each link. For example, some brands have high added value. For these brands, it is not meaningful to talk about the simple production cost; some brands themselves occupy a large proportion, such as the use of artificial embroidery; some brands belong to the price matching.

As he said, because there are no digital indicators for design and handwork, it is not scientific to simply measure manufacturing costs.

But he also admits that the market does not match the price performance of the product does exist, the price is too high.

However, when consumers feel the price of clothing is too high, the clothing brand is not easy to live.

Wang Zhuo, vice president of China Garment Association, told the China Commercial Daily reporter that the clothing industry is not a profiteering industry. The average profit rate of the whole industry is 5%, although the high net profit can reach 8%, 12% or even 20%, but a large number of enterprises do not make money.

15%-20%'s raw materials and labor costs, and the net profit margin of 5%, the two parties are "crying for mercy", so who has eaten the profits of the apparel industry chain? Why do the costumes of tens of dollars can be marked up to hundreds or even thousands? Why is the price of clothing products in China obviously higher than those in Europe and the United States as a big textile manufacturing country?

For the Chinese Commercial Daily reporter's doubt, Wang Zhuo said that this is related to the low efficiency of local clothing brand operation, too many intermediate links or excessive overstock of intermediate links, and the high cost of commercial circulation.

Among them, especially the high cost of commercial circulation caused by many links is one of the main reasons for the high retail price of clothing.

A clothing industry observer told the China Commercial Daily reporter that although the simple production cost is not high, but a garment from production to circulation, and then to the hands of consumers in the process of deriving as many as 20, 30 or even more costs, these costs need to be paid by consumers.

For example, a shirt with a price of 1000 yuan may cost less than 100 yuan for raw materials and labor, but in the course of operation, there are about three links: manufacturers, brands and distributors.

In the manufacturing sector, it has to produce raw materials, freight, operation, marketing, warehousing and other costs, at the same time to consider profits and taxes; in the brand business segment, enterprises have to consider the cost more, in addition to operations, warehousing, freight, and brand premium, at this time, the price of products has been sold to 600 yuan; to the dealer link, but also consider the rent, operation, warehousing, freight, inventory, etc., when the price of the product has nearly 1000 yuan.

The damage of agency system

Zhu Qinghua told the China Commercial Daily reporter that in fact, the export price of Chinese clothing is not high, mainly in the circulation link to push up the price.

First of all, the cost of rentals in China's clothing stores is relatively high. In recent years, the cost of rents has increased at a speed of around 10%, and the cost of manpower has also been rising. Secondly, the agency system is widely adopted in China's clothing brands, and the price of clothing will rise to a certain extent after each agency. Finally, the shopping malls in China are higher, and the shopping malls in a shopping mall are between 15%-20%.

Zhao Ping agreed.

She believes that even after discount, the price of physical stores is still higher than that of online prices.

Because their cost of circulation is too high to push up the price of products.

The "high cost of circulation" mainly refers to the relatively large number of circulation links. She further said: "most department stores adopt agency system, which is settled by the relatively end agents, and there are many circulation links before the end of the agent, and every link is constantly increasing the price.

The cost is relatively high and the profit plus times are higher, so the final retail price is pushed up. "

Indeed, if we do not talk about the rent and the rent of the shopping mall, we will simply see from the clothing agency system that the number of layers of agents has increased, which has also greatly promoted the price of clothing sales.

"Most brands in China adopt franchisee mode, and channel level and shop diversity lead to high channel cost," Cheng Wei hung told the China Commercial Daily reporter.

At the same time, this also reduced the profit margins of enterprises. Now the clothing industry has noticed this problem. Anta, seven wolves, and American brands have attached importance to the direct channel and reduced the circulation link.

According to Zhao Ping analysis, with the strengthening of many brands, the reduction of intermediate links and the rising cost of circulation will lead to a relatively small increase in the price pressure.

However, expanding the proportion of direct battalions and reducing circulation links will not necessarily reduce the price of products.

According to Zhu Qinghua analysis, each clothing brand is reducing the circulation link and expanding the proportion of direct battalion. In the long run, it can reduce clothing pricing to a certain extent, because direct battalion can save more circulation cost, but in the short term, it is difficult to reduce the price of clothing obviously.

He added that expanding the proportion of direct battalions would also increase the company's operating costs, because rent and human costs would be pferred to the company, and the company might not have much desire to reduce prices in order to maintain its profit margin.

As he said, in recent years, the rental cost of shops has increased by about 10%, and the cost of human resources has also been rising.

In addition, when products are directly run, they need to face greater inventory pressure. Inventory is often an important factor to consider when pricing products.

The industry observers said that for brands, inventory is unstable, so many companies will calculate the price of products when they are priced, and raise the overall pricing, so that enterprises can still make profits in a certain inventory.

Transformation cost performance ratio

When consumers are dissatisfied with the price of traditional channels, especially the local public clothing, to meet the needs of consumers, one of the pformation and upgrading paths of local garment enterprises has been identified, that is to say, the way of cost performance between the sea LAN home and the UNIQLO style.

China's economic growth is slowing down, all walks of life are eliminated, clothing is no exception, the current round of elimination has begun.

Chen Kun said that the clothing industry is overcapacity. Recently, some people have said that the stock in the system is about 250 billion. So China's 1 billion 300 million population is equivalent to the consumption of nearly 20 stocks per person each year.

At the same time of overcapacity, the baptism of the market has begun, and the strength of survival will disappear in the whirlpool.

How to survive in this whirlpool? Chen Kun believes that there are two kinds of brands that will never die in the future. One of them is the pursuit of cost performance. However, the so-called performance price ratio is not only cheap and low end, but the product's own value and price match and reasonable.

Wang Zhuo also said that there is still a certain gap between local brands and foreign brands in brand operation. This is also the core task of the future garment industry adjustment: how to solve problems such as products, efficiency, supply chain and so on, to provide consumers with more cost-effective products, is the development direction of future enterprises.

For how to achieve cost-effective, Chen Kun believes that it can be the intensive production of the upstream, can reduce operating costs, reduce the cost of the link, and give profit to the consumers.

Wang Zhuo mentioned mass production. He said: "to achieve mass customization, mass purchase, mass sales, and improve efficiency in design and management, we are making adjustments in these areas.

Nor is there no successful example, such as Hai Lan's home and Taiping bird, which generally cost a lot of money.

According to the China Commercial Daily reporter, unlike many brands in the industry, the mode adopted by Hai Lan's home is the McDonald's franchise mode, that is, to standardize the management of franchisee stores strictly, from production to sale, and to manage the whole process uniformly, reduce intermediate links and reduce costs.

Semi annual data show that in the first half of 2015, the sales net interest rate of Haolan house remained stable, at around 21%, and even the gross margin rate increased by 1.2 percentage points to 41.4%.

The success of Hai Lan's home has led many people in the industry to see the feasibility of pursuing product cost performance, and has attracted many enterprises' effectiveness.

However, in Wang Zhuo's view, the so-called cost performance is not simply to make consumers feel cheap, but rather in a certain production process and production standards, the price tends to be reasonable.

In the selling price, it is necessary to have the supplier's supply chain profit, designer's creative profit, and retail profit.

Of course, in pursuit of cost performance, there are other modes that meet the needs of consumers. After all, China is a diversified market.

Wang Zhuo believes that the needs of consumers will be more personalized in the future, so in the future industry, besides the basic brands such as Hai Lan's home and UNIQLO, there will also be so-called excellent single products, that is, there are industry-leading or category leading brands in processing cost or technology, and water level. For example, the national wind brand uses a lot of embroidery, or the designer's creative brand and custom brand.

"The future is nothing more than these four kinds.

Direction, and gradually split the market.

In terms of cost and profit structure, Wang Zhuo analyzed that the first kind (the pursuit of cost performance) might earn industrial profits and a large number of sales profits, and the latter might rely on artificial profits, production profits and creative profits.

As long as these profits tend to be reasonable, the cost structure of all links is reasonable, which is normal.