How Can Shoes And Clothing Brands Be Able To Break Through In The Existing Environment?

Right now Shoes and clothing During the season, the price of shoes and clothing in the shopping mall is often sold for thousands of yuan, and the problem of the high price of shoes and clothing has attracted the attention of many consumers again. However, when consumers complain about the high price of clothing, shoes and clothing brands are also worried about their meager profits. In the context of consumers and brands' two parties' troubles, what has eroded the profits of the shoes and apparel industry chain? How can the shoes and clothing brands be able to break through in the existing environment?

　　 Affordable price

Mid October is the season of shoes and clothing, and when the brands on the market are introducing new products, they have launched the "new product discount" activities. 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.

In this regard, CIC consultant light industry researcher Zhu Qinghua acknowledged. According to his analysis, many shoe and clothing brands in China do exist at present. In department stores, brand shoes and clothes often cost thousands of yuan, which has exceeded the purchasing level of more consumers.

What is the logical relationship between the new discount on shoes and clothing and the high price of shoes and 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 decrease in traffic volume and decrease in sales. 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, brand manufacturers set the factory price 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 it is difficult to sell shoes and clothing products at the original price.

According to Zhao Ping's analysis, the demand is not good - the sales side discount - the brand business increases the price, this has formed a vicious circle, of course, this is under the premise that the shoe and clothing brand adopts the agent alliance system. In a shopping mall in Haidian District, Beijing, Ms. Zhang told reporters, "although there is a discount, there is one. Loose coat Or thousands of dollars, I feel more and more can not afford clothes.

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 category in 1-9 was 2.9%, of which clothing, shoes And clothing processing fees 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.

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As a matter of fact, shoes and clothing products such as shopping malls, shopping centers and other traditional channels have been more and more abandoned 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 price of shoes and clothing products is high in China for a long time. Earlier, there was a comparison of 500 shoes and clothing brands between China and the United States, and found that the price of shoes and clothing sold in China was about 70% more expensive than that in the United States. According to Chinese reporters, the price of jeans for domestic brands is generally over 200 yuan, while the price of jeans in the United States is only sixty or seventy yuan.

　　 Pain of multiple links

After investigation, the reporter found that the huge difference between the terminal price of shoes and clothing products and the cost of raw materials has become a major factor in the high price of clothing. While analyzing the composition of clothing products, Zhu Qinghua said that the cost of raw materials and labor in manufacturing sector actually accounts for only about 15%-20% of the sale price of clothing terminal in China.

In this regard, Chen Kun, executive director of Suzhou fine garment clothing Limited company, said that the problem of high price in footwear 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 simple production costs; some brands themselves occupy a large proportion, such as artificial embroidery; some brands belong to 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 that the price of shoes and clothing is too high, it is not easy for them to survive. Wang Zhuo, vice president of China Garment Association, told the China shoe net reporter that the shoe and 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%.

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 shoes and clothing industry chain? Why do the shoes and garments cost tens of dollars to be marked up to hundreds or even thousands? Why is the price of shoes and clothing products of China as obviously larger than that of Europe and the United States as a big textile manufacturing country? For the reporter's question, Wang Zhuo said that this is related to the low brand operation efficiency of local shoes and clothing, 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 shoes and clothing.

A shoe and clothing industry observer told reporters 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 pair of men's shoes priced at 1000 yuan may cost less than 100 yuan for raw materials and labor, but in the course of operation, they need to pass through three links: manufacturers, brands and distributors. In the manufacturer's links, 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 product price has reached 600 yuan; to the dealer link, but also consider the rent, operation, warehousing, freight, inventory, etc., at this time, the price of the product has nearly 1000 yuan.

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　　 The damage of agency system

Zhu Qinghua told reporters that in fact, the factory price of shoes and clothing in China is not high, mainly in the circulation link to push up the price. First of all, the cost of rentals and clothing stores in China is relatively high. In recent years, the cost of rents has increased at a rate of around 10%, and the cost of manpower has also been rising. Secondly, the brand system is widely adopted in China's shoes and clothing brands, and the price of shoes and clothing will rise to a certain extent every time after a proxy. Finally, the shopping malls in China are higher and the general shopping malls 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 they are too expensive to push up the price of the product. The "high cost of circulation" mainly refers to the relatively large number of circulation links. She further said: "most department stores adopt agent system, which is settled by the relatively end agents, and there are many circulation links before the end agents, 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 agency system of the shoe and clothing that the number of links caused by the agents at various levels will increase, and the sales price of the shoes and clothing will also be promoted to a large extent. "Most brands in China use franchise mode, and channel level and shop diversity lead to high channel costs," Cheng Wei hung told reporters.

At the same time, this also reduced the profit margins of enterprises. Now the shoe and clothing industry has noticed this problem. Anta, seven wolves (002029, stock bar) and Mei Bang 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, every shoe and clothing brand is reducing the circulation link and expanding the proportion of direct battalions. In the long run, it can reduce the price of shoes and clothing 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 shoes and 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 transferred 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 an unstable factor, so many companies will calculate the product losses when calculating the price of products, so as to raise the overall pricing and ensure that enterprises can still gain profits in a certain inventory situation.

　　 Transformation cost performance ratio

When consumers dissatisfied with the price of traditional channels, especially local shoes and shoes, to meet the needs of consumers, one of the transformation and upgrading paths of local shoe and clothing enterprises has been identified, that is to say, the way of cost performance is to go to Hai Lan's home (600398, stock bar) and 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 now the shoe and clothing industry is overcapacity. Recently, some people have said that there are about 25 billion stocks in the system, so China's 1 billion 300 million population is equivalent to 20 yuan 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.

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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 footwear industry adjustment: how to solve problems such as products, efficiency, supply chain and so on, and provide consumers with more cost-effective products is the future development direction of enterprises.

For how to achieve cost-effective, Chen Kun believes that the upstream production can be intensive, can reduce operating costs, reduce link costs, allowing 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 reporter's understanding, unlike many brands in the industry, the mode adopted by Hai Lan's home is the McDonald's franchise mode, that is, the standardized management of franchisees' stores must be strictly unified, so as to realize the unified management of the whole process from production to sales, reduce intermediate links and reduce costs. Semi annual data show that in the first half of 2015, Haolan's home sales net interest rate remained stable, at around 21%, or even gross margin 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 to follow suit. 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, the supplier's supply chain profit, designer's creative profit and retail profit are needed.

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 is also a need for so-called excellent single products, that is, leading brands or leading brands in the processing cost or technology level. For example, the national wind brand uses a lot of embroidery, or designer's creative brand and custom brand. "The future is nothing more than the development direction of these four brands, and gradually segmenting 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.