Depth Analysis Of China'S 200 Billion Scale Underwear Market To Find A Way For Future Development

China's underwear market is a large market of more than 200 billion, with a large number of players and fierce competition, showing the characteristics of low market concentration and rapid growth. This article will tell you in 6000 words:

1. how big is the underwear market in China? What are the three major crises?

2. what are the modes of players in the underwear industry? Why are fashion underwear not playing a new trend?

3. key links and new opportunities to solve problems

200 billion big markets expose three crises

Underwear, mainly refers to clothing worn in the inner layer, usually directly touching the skin, is one of the necessary clothing for people. In a broad sense, underwear includes bra, underwear, clothing, thermal clothing, sports underwear, Swimsuit , pajamas, home clothes, bathrobe, and so on. In a narrow sense, underwear usually refers to bras, underwear and body plastic clothes.

According to Euromonitor statistics, the size of the underwear market in China will exceed 170 billion yuan in 2017. According to Frost&Sullivan statistics, China's broad underwear market in 2013 was 194 billion 400 million yuan, and the compound growth rate was 14.4%. With all kinds of information sources, China's underwear market is now a large market of more than 200 billion. 　　

Changes in underwear sales revenue

The proportion of women's underwear reaches the 60%-70% of the market as a whole, with no periodicity and steady growth of market capacity, which is an important competitive position for underwear manufacturers. 　　

Size comparison of men's and women's underwear market

In women's underwear, there are local underwear giants, love and Hui Jie groups. Among them, the city beauty, Ann Li Fang, Dali, Virginia and other companies have achieved the listing of Hong Kong stocks, and Hui Jie group as the mainland underwear first share listed on the Shenzhen Stock Exchange in June 2015.

However, in the mid 2016, the underwear industry broke through a series of performance crises, and people began to reexamine the dilemma faced by the "gold medal industry".

Crisis 1: revenue crisis, profit decline

In 2016, the underwear giant, Li Fang, lost its first profit. Its current operating income was HK $2 billion 216 million, down 12.61% from the same period last year, and the gross profit margin also plummeted. In 2016, net profit fell 51.18% in the same period, and it did not recover the level in 2017. 　　

Anne Fang annual net profit 2017 Annual Report

In the same year, urban beauty business income decreased by 10.2%, while net profit dropped by 55%.

As one of the largest underwear manufacturers in the world, Virginia Hongkong has seen its first annual sharp decline in 2017 pre tax profits. The company explained that its new capacity was put into operation in Vietnam. However, observing its business revenue, we can see that orders for underwear are constantly being cut. 　　

Crisis 2: inventory crisis

Urban beauty inventory turnover in 2016

Urban beauty is a brand with the highest share in the domestic market, with its developed distribution network to occupy the mass market. However, from its 2016 report, the average stock turnover period increased from 92.5 days in 2015 to 141.8 days, and the stock stock was nearly 1 billion 200 million yuan, accounting for 30% of total assets. 　　

2016 urban beauty financial data unit (thousand yuan)

Other enterprises also have unequal inventory risk: Hui Jie in 2017 inventory end balance of 559 million, accounting for 24% of the total assets, most of which are inventory goods, and Ann Li Fang inventory end balance of 650 million, accounting for 18.75% of total assets. 　　

2017 remittance inventory products

Crisis 3: store sharp decline

From the 2017 annual report of Hui Jie group, its business gradually shifted to e-commerce and distribution channels, and its direct channel terminal stores, which account for more than 60% of its revenues, showed a trend of shrinking. 　　

Hui Jie group store changes

The urban beauty store crisis was more serious. In 2016, the total number of stores decreased by 958, accounting for 11% of the total number of stores.

Let's take a look at the main selling channels of underwear industry:

Distribution of women's underwear sales channels

From the data point of view, the offline channel is still the main consumption scenario of underwear. Why is the share of the big brand offline? Why are the goods not selling and what problems are there at the sales side? Let's start with the fashion model of underwear, and explore the causes and solutions of the current underwear industry predicament.

Three models and two trends

Underwear is a big concept corresponding to the "coat". Under the subdivision, there are many subcategories such as women's underwear, men's underwear, thermal underwear, swimsuit, pajamas, home clothes and so on. It is difficult to follow the market segmentation. But if the positioning and strategy of underwear brand are cut into, there are only three directions in the existing brand.

1. commodity products dominated commodity mode

It can be said that after the reform and opening up, China's underwear industry began to grow, and from the supply chain, three large guns, comfortable, cool, AB and other daily wear apparel giants came out. Some women's bra products, which circulated through supermarkets, have also adopted this mode to sell them in daily necessities.

However, too many entry players have increased the cost of competition and the profit is very low. In the face of rapidly shrinking demand and highly homogeneous markets, some of the top manufacturers of brand awareness have long sought spanformation.

2. functional points to create differentiated health care products mode

In the early AB, three guns and other enterprises monopoly, some brands rely on "plastic", "antibacterial" and "warm" and other special functions to seize the market. For example, the "beauty of underwear", the "north polar cashmere" of the main thermal underwear, and the old "three guns" and "AB" immediately followed suit. And television advertising bombing and health care marketing, so that the brand can be priced in a higher brand premium.

It can be said that this wave of underwear brand has initially had brand awareness and marketing awareness, forming the first wave of consumption upgrading in China's underwear industry. But when the market returned to reason, the concept war quickly cooled down, so that the market in 05 years later fell into low dumping, a large number of players quit the cold winter.

3. fashion models for women's underwear

In 90s, the entry of Ttiumph, Wacoal and other foreign enterprises had already introduced the fashion oriented operation mode into women's underwear. During the same period, Ordifen, AI and other domestic brands started from the second tier cities. The choice of brands such as urban beauty and emanli from three or four line cities, through the establishment of single brand stores and service upgrading, provided fashion and high frequency new ways for Chinese women.

The fashion industry is the highest level in the three models, and it is also the mode adopted by the enterprises in the predicament we are discussing today. To understand the trend of women's underwear development, we must first understand the close relationship between underwear and fashion.

The origin of underwear culture is closely related to fashion. During the Renaissance, with Italy as the center of fashion and clothing as a whole in pursuit of the natural comfort of Rome clothing, women used to remove the curve in loose clothing, and the chest was simply wrapped in cloth. After entering the late Renaissance in sixteenth Century, under the influence of the ancient Spanish court style, the dress style changed to restrain. In order to better match the outspread clothing stereotypes, there appeared skirt and long waist girdle to flatten the female breasts.

In fact, underwear that holds up breasts did not appear until late eighteenth Century, when Rococo fashion with low breast milk appeared in Europe. The corsets made of whale bones, rattan and cowhide make women endure great pain while pursuing beauty.

In the early nineteenth Century, during the imperial period, because of the short return of clothing to the relaxed and comfortable style, the corset and skirt had disappeared for some time. But this fashion has not lasted for a long time, and soon the tight skirt with emphasis on body lines has regained the upper hand. By the end of the nineteenth Century, the aesthetics of waist and breast was becoming more and more serious, which had seriously affected women's health.

At the end of the nineteenth Century, the wind in the waist became more and more intense.

In the early twentieth Century, under the trend of women's liberation, the fashionable modern straight skirt appeared, and the underwear became a "vest". 1914 granny, in order to better match the prom dress, Caresee Crosby invented a new type of underwear. In 1944, S.H. and Company invented the bra size measurement method, and gradually formed the present underwear system.

Therefore, in the context of the development of underwear, we can clearly see a main thread: the underwear system develops with the change of the outer garment system. Every time a new fashion comes into fashion, a new type of underwear will emerge.

Nowadays, women's underwear, which is popular among Chinese people, was introduced from Europe and America in the 60s and 70s of last century, and was adapted to T-shirt's T-shirt bra. Its characteristics are: cotton is the main material and thick mold cup can be hidden under the T-shirt. With the diversification of outer clothing, this single habit of wearing is actually declining worldwide. 　　

Underwear manufacturer Vijani's 2016 performance in Waterloo was largely due to a large reduction in orders for its largest customer and L.Brand, a virgin parent company. Despite rapid business adjustment, the sales volume of Virginia's chest and other moulded products has shrunk by nearly half in the 17 year report. In the 2017 annual report, Virginia explained: orders from the brew cup customers are less than expected.

In fact, there has been no systemic change since twenty-first Century. But because of the development of Internet, fashion has become a public expression. In the past, the top coat and lingerie fashion began to affect its mass consumption (especially young people), and the underwear system is also undergoing changes. Throughout the world, there are two major trends in underwear wear:

1. underwear wear

2. solve comfortable and rigid needs: size differentiation, version science.

Abundant theoretical research and market cases have proved that rough industrial code production has greatly affected the comfort of women's underwear.

The size of underwear is a combination of chest and cups. In China, in order to meet the needs of the masses, it needs at least a dozen sizes, and the difficulty of production and inventory management are far more than that of ordinary clothing enterprises. Therefore, in order to facilitate the production of many enterprises to take the 75B standard size for R & D, and then according to the 75B version of rough industrial code; and in order to alleviate the pressure on the stock, underwear manufacturers generally maintain the minimum number of sizes (12-15). In fact, this is far from satisfying the diversity of the human body.

At the front end, the underwear industry as a whole is guided by sales: the purpose of front-end sales is to digest inventory, and consumers are hard to choose the right size; while the back end production as a reference for the previous sale, it falls into a low innovation and extensive death cycle.

With the popularity of systematic chest management knowledge, consumers with sophisticated demand began to seek solutions spontaneously from emerging brands and overseas brands. In this way, in the mass and large-scale production mode, once the front-end sale is stagnant, it will cause a large backlog of stock at the back end.

Solutions and Prospects

Under the siege of the two major trends, manufacturers are forced to improve from the supply side and the sales side. Underwear is a business dominated by R & D and sales capabilities.

The product chain of underwear refers to the process of production and processing from natural resources to final products. Compared with ordinary clothing, underwear has more raw materials and more complicated processes. It is a long industrial chain industry that is characterized by labor intensive in the process of production and sales, and is dominated by R & D and sales capabilities.

1. production links:

In the past, there were two solutions to capacity under mass production. 1. self built capacity 2. commissioned processing. Underwear manufacturing is very complex. In the process of manufacturing, there are also star enterprises like Virginia, mostly concentrated in the Pearl River Delta and the Yangtze River Delta. Excellent foundry manufacturers have strong voice.

In the past, in order to pry up the upstream, many brands took a large number of orders for production. But with the outbreak of the stock crisis, a large number of supply side manufacturers went bankrupt or moved to Southeast Asia where labor force was cheaper. The remaining domestic manufacturers began to attach importance to the cooperation opportunities with China's high-end and emerging brands under the dual pressure of weak European market and rising labor costs, and small batch production methods were also supported.

For underwear industry, the added value of R & D and channel at the two ends of the industry chain is higher, but the improvement of the supply chain end lays the foundation for further refinement of the "flexible industrial chain".

2. R & D links:

R & D and design are the driving force of the industry value chain of the underwear industry, and also the foundation of the brand value. The R & D capability determines the size of the underwear enterprises to create value.

Human data is very complicated. There are various forms of female's chest type including hemispheres, discs, water droplets and so on. Underwear development requires a lot of data and volunteers to cooperate. For the new round of underwear competition, we must establish a data based system to continuously improve products.

3. sales link:

On the one hand, the sales channel is influenced by the attributes of underwear itself because of its high added value. On the other hand, it is the key to achieve the value of underwear products through marketing channels to effectively convey the concept and function of products to the final consumers. However, as a particularly important channel for underwear sales, domestic department stores and shopping mall attach importance to underwear far less than Europe and America.

In foreign countries, because underwear is a kind of high frequency rigid demand, sales are considerable and profits are higher than others. clothing Categories will be well positioned in the shopping malls. However, in China, Underwear brand is not valued by commercial real estate. They are often crowded in corners, and the area is very small. There are two reasons:

First, the difference of business mode. Many shopping malls in Europe are picking up goods, which is equivalent to a large collection store, with their own professional buyers buying first-hand fashion, and the goods are more sophisticated and diversified. While domestic investment takes the form of bunk rental mode, it tends to produce homogenization trend, and products are seriously out of touch with the market. Therefore, underwear is regarded as a poor and no profit category in China.

Second, under the guidance of sales, user experience has been neglected for a long time. Underwear is a natural category suitable for the consumption of scenes. The try and choose process can effectively improve the stay time of guests in the store. However, sales professionals lack professional training and sales are greater than services. They are short boards for offline consumption scenarios, and there is great potential for improving service marketing.

　 In fact, Underwear The following characteristics of the industry determine that underwear is still a very good business.

1.) the product has the characteristics of non periodic rigid demand, and the market potential is large, and gross profit rate is higher than the average clothing level.

2.) from the experience of foreign markets, the head enterprises of every consumer market are their local underwear brands.

3.) for today's China, the degree of industrial concentration is far below that of the mature market.

　 Waiting for today's underwear industry is a new round of industrial upgrading opportunities:

1. medium and high end underwear has become a new growth point in the underwear market. China's rapid economic growth and rapid growth of residents' income have led to the consumption demand of high-end underwear. Consumers' demand for underwear has gradually increased from the basic functional requirements of style, fabric and process quality to the high level demand for attribution and emotional value. More and more attention has been paid to the humanistic care and brand value of underwear, and the experience of the consumption process. The proportion of medium and high grade underwear has been increasing.

In addition to some international high-end underwear brands, some high-end clothing brands have also expanded underwear product lines, brand extension, and jointly promote market education.

2. new opportunities emerge within the underwear category. The concept of diversification is sought after by the market. Under the trend of "underwear wear", subcategories of underwear, whether underwear, pajamas or bathing suits, have emerged new market opportunities due to its wearability. And no steel ring underwear, no mold underwear and other "niche" subdivision category, has also become a new concept that consumers are looking for, and the share in the industry has been rising.

Consumption under the 3. line is still the mainstream. Experience marketing has become a trend to create consumption scenarios. In the heavily underwear market with brand aging, the service age is generally high, and the idea can not be updated in real time. In the past, underwear sales in the main sales outlets, consumers lack scientific and systematic purchase guidance.

Now, including Victoria, many high-end brands in shopping malls are trying to introduce standardized service processes (such as volume). Compared with simple underwear, consumers need underwear brand more healthfully. The private nature of underwear determines that the brand can effectively obtain consumer loyalty through experiential marketing.

4. flexible supply chain provides sophisticated R & D production solutions. Nowadays, emerging brands and international brands have become an important force in consumer education. Under the pressure of inventory, the extensive industrial scale system can no longer meet the needs of Asian women. Now, this opportunity to upgrade the supply chain has provided a solution for the enterprise's R & D and fine production. From the overseas market observation, flexible supply chain will also become the future production trend.

　　 5. large underwear group has brand integration space. And maturity market Compared to Chinese underwear industry Brand concentration is not high, according to the 2014 Euromonitor statistics, the Chinese market share of the top ten of the underwear brand accounted for only 12.1%, lack of Monopoly brand. In the face of the scattered market, large groups have chosen to launch different brand lines to solve the problem of brand aging.

In recent years, with the new round of elimination and upgrading of industries, the degree of concentration of industries is improving. Targeted subdivision strategies can better highlight brand competitiveness. 　　

　 6. there are plenty of opportunities for emerging brands. Over the past two years, there has been a common trend at home and abroad: the rapid rise of minority brands, many brands are less than 10 years old. Because the young consumers growing up under the Internet environment no longer have high brand loyalty to big brands, but are more willing to express their individuality by trying new brands. Young market is emerging brand and old brand. Underwear The core battleground.