The Key To China'S Merger And Acquisition Of International Brands Is Localization.

There are various signs that Chinese enterprises are enjoying the lead in the acquisition of international fashion brands. According to the public reports of times finance, there were more than 10 mergers and acquisitions involving textile and garment industry in the first 4 months of 2018. Industry analysts pointed out that the upgrading and integration of global supply chain resources is the main motivation for Chinese enterprises to acquire these brands. However, Chinese enterprises generally face the situation of "eating" but "unable to swallow". Brand spanformation and operation capability need to be improved.

Dual drivers of consumption upgrading and industrial upgrading

In January 22, 2008, Li Rucheng, chairman and President of Ningbo YOUNGOR group, announced that YOUNGOR had successfully completed the acquisition of the new Malaysia clothing group, the core business department of Kellwood, the famous clothing company of the United States, and the $120 million deal was described as "the first case of overseas acquisition of China's clothing brand".

Since that spanaction, Chinese garment enterprises have gone through 10 years of overseas mergers and acquisitions. During these ten years, many enterprises have followed YOUNGOR's trajectory, with the help of international mature brand channels and business models, expanding their own product categories and stepping into the upstream of value chain, landing in the international arena. market And occupy the fashionable highland.

CITIC investment research reported that the number of overseas mergers and acquisitions of China's textile and apparel increased rapidly after 2012, and the total volume of spanactions rose, rising from 2 billion 40 million yuan in 2012 to 8 billion 257 million in 2016, and the scale increased by three times. In 2016, the number of mergers and acquisitions was 46, with a total spanaction value of 23 billion 100 million yuan, with an average spanaction volume of about 500 million yuan.

Wen Zhongwei, an observer in textile and garment industry, told times finance, Europe and America. fashion The brand has become the target of Chinese consortium acquisition. On the one hand, the upgrading of domestic consumption market has led to the consumption demand of high-end brands in Europe and America. On the other hand, China has shifted from capacity output to capital export and technology output. "Not only the acquisition of foreign brands, but also the acquisition of foreign technology assets, the best example is Shandong Ruyi group, which not only acquired the Swiss luxury brand Bally, but also acquired Lycra spandex technology."

According to the 2017 China luxury market research published by consulting firm Bain, after 3 years of declining sales, China's personal luxury consumption rebounded in the third quarter of 2016 and returned to growth orbit in 2017. The market size in 2017 was about 142 billion yuan, an increase of 20% over the same period last year.

Cheng Weixiong, founder and general manager of Shanghai Liang Qi Brand Management Co., Ltd. pointed out to the Times financial analysis that the low value, low price, low threshold, low gross profit and low technology of the domestic clothing enterprises led to the lower value chain of the industrial value, while the distribution of the brand industry in the European and American markets was balanced.

"In addition, some capitalized Chinese clothing enterprises have a big gap compared with European and American garment enterprises in terms of brand operation, product development, and global market development and management. The current strength of local brands has bottlenecks in the development of local markets, and mergers and acquisitions of international brands just fill in their weaknesses, such as brand, product research and development, marketing, supply chain and so on. Cheng Weixiong added.

Not only "eat", but also "swallow".

However, McKinsey's "Pocket Guide to cross-border mergers and acquisitions" released in April last year pointed out that the standards of cross-border mergers and acquisitions in the past ten years were not satisfactory according to the criteria set by the two sides of the spanaction. Nearly 60% of the nearly 300 spanactions in the past have not created real value for Chinese buyers, and the total spanaction volume is about $300 billion.

Speaking from the clothing and textile industry, Zhou Ting, President of the fortune Brand Research Institute, said in an interview with the media that a common problem faced by Chinese enterprises now is "eating" but "unable to swallow". The enterprise buys foreign high-end consumer brands, but is not good at running. Eventually, the brand can not be built or made into a mass consumer brand, and the value of the whole brand is seriously lowered.

Jiang Daijun, general manager of Bebe, the former high-end China Women's clothing brand, tells the times finance. Apart from the brand's story, history and value, the brand spanformation capability, market operation and promotion ability of the M & A are all important factors to decide whether the M & a project can be successful.

"Brand spanformation capability is different for every enterprise and every target. For example, the three French luxury brands Sandro, Maje and Claudie Pierlot, which had been purchased by Shandong Ruyi, have hardly been spanformed. They have adopted the original team and design, and have been successful in the Chinese market after several years of nurturing. However, such a target has become increasingly scarce. Most of the acquired brands have been operating abroad, and they must be further localized. Jiang Daijun said.

In addition, with the acquisition of overseas Chinese Enterprises fashion With the acceleration of brand, more and more foreign brands and even totally unknown brands enter the Chinese market. The next question will be: can China's consumer market fully carry and digest?

According to Jiang Daijun, "from the present point of view, there are not many foreign brands entering China, and the whole market is in a stage of profiteering competition. Whoever imports first will take advantage of the inherent advantages. Later entry will not be easy to divide up the market, and with the increase in the number of brands, the market will gradually reach a balance point."