Rushed Out Of The Clothing Industry Price War Mire, Xie Wei Shan Interpretation Of Bosideng Billion Performance Behind

At the beginning of 2019, andmar, located in the "global high-end functional sports brand", recently launched its forty percent off promotion on the official website. The brand, known as "never discount all year round," finally experienced the savage taste of competition in the Chinese clothing market.

Andemar is not alone.

According to the statistics of National Bureau of statistics, in 2018, the garment enterprises above Designated Size completed 22 billion 274 million garment production, down 3.37% compared with the same period last year. According to the output of all kinds of woven garments, down garments decreased by 5.40% over the same period last year.

However, in the fierce competition of the garment industry, the down jacket giant Bosideng has gained tens of billions of revenue in the price war, up 35%.

Why can Bosideng grow against the trend in 2018? In April 1st, in the "CHIC 2019 China Fashion Forum" sponsored by the China Fashion Association, the competition strategy expert and Xie Weishan, chairman of Jun Zhi consulting, were decrypt.

Analysis of clothing price war

"After 2000, China is not only a garment industry, but all trades and professions are full of price wars. The biggest difficulty facing all walks of life in China is that you can't walk without discount sales."

Xie Weishan pointed out that to understand Bosideng's growth in counter trend, we need to understand what kind of market environment the Chinese clothing industry is in.

According to media statistics, in 2010, 87 clothing and textile companies accumulated stock of 50 billion 100 million yuan, and 69 billion 900 million yuan in 2011, while in the first half of 2012, the figure was as high as 73 billion 200 million yuan.

In many years of clothing industry high backlog and the subsequent price war, Bosideng has also been looking for exports in the plight of the industry.

It is learnt that as a long-term strategic adviser to Bosideng, Jun Zhi consulting has helped Bosideng establish a competitive strategy since September 2017, and continuously optimize and upgrade channels, products and communications.

In 2018, Bosideng was popular not only in the capital market, the stock price went up by 132.8%, and it gained the first three of the annual increase in the Hong Kong Stock Exchange (south to South) paction; meanwhile, the brand also won the recognition of the consumers. The high-end sales increased by more than 500%, and the retail sales amounted to more than ten billion RMB, and the consumer's cognition reached 93%.

Xie Weishan still has fresh memories of the tragic price war in the clothing industry.

He cited andmar as an example. In early 2019, a brand that had never entered the price war after entering the Chinese market finally fought the price war, and the discount was as low as forty percent off.

"In recent years, the price war in garment industry has led to a steep decline in corporate profitability. If we do not find a way to stop bleeding, if we can not sell our clothing more expensive, I think the whole industry will face a deeper crisis."

In Xie Weishan's view, finding a way to deal with a bloody battle and finding a way to solve the problem of competition will bring China's brand to an awakening opportunity.

"How to avoid price war is the need for enterprises to have a thick wall."

Xie Weishan said that last year it proposed Bosideng to stop the price war and not to sell such a cheap down garment. However, at that time, the price of very cold series was very low, and online sales rose rapidly. But Bosideng kept the price and the cold weather began to start.

Finally, Bosideng data showed that as of February 25, 2019, the cumulative retail sales volume of Bosideng brand down garment business 2018/19 fiscal year has exceeded 10 billion yuan, and the total sales revenue has increased by more than 35% over the same period of 2017/18 fiscal year.

"When the enterprise has thick walls, the other party simply can not rush in. All his efforts, except for their own price war, bloodshed everywhere, hit the wall on top of the head and blood, can not even open your position. When an enterprise can win the strength of the heart, it is equivalent to this enterprise has a wide mining moat."

Xie Weishan said that in many people's brain, Bosideng is equal to the down garment that is equal to death. As long as the efficiency of this equals sign is displayed, it can grow continuously. When it does everything, the profit growth of this enterprise is not ideal and its profit is getting thinner and thinner.

Focus of competition in the next ten years

China is playing an increasingly important leadership role in the global fashion and fashion consumer market.

The 2019 global fashion format report released by fashion media BoF shows that China will surpass the United States as the world's largest fashion market in 2019, and will lead the global consumer market in a higher dimension, focus on ecology and sustainable development, and promote diversified market and industrial chain collaborative innovation.

Xie Weishan stressed that in the past year, the growth rate of GDP and revenue in China has been slowing down. The market consumption is weak. So is the clothing industry. Under the impact of declining demographic dividend and overseas brands, Bosideng has won the momentum of development against the support of enterprises, partners and channel providers. It not only verifies the accuracy of brand strategy, but also serves as a reference for the entire garment industry.

Xie Weishan said that if there are more Bosideng in the next ten years to grasp the new generation of competition strategy methodology and satisfy people's yearning for a better life, the problem of price war in the clothing industry will be solved and domestic demand will be greatly boosted.

With the active performance of the international consumer goods market, in recent years, many Chinese brands have gone abroad, and their influence in the world has been increasing day by day. However, there are few famous brands in the world.

In this regard, Xie Weishan believes that this is not China can not produce world-class quality products, but in the next ten years, with the changing times and competitive environment, entrepreneurs should focus on the perception of customers on their brands, and realize two major changes in consciousness.

"One is the need to realize that" brand is the center of performance for creating customers ", that is, enterprises must have strong brands to win customers and establish sustainable competitive advantages.

In the face of global competition, if enterprises continue to stay in product management, it is difficult to create a brand preference to win customers, so that they can not get a reasonable profit.

Xie Weishan said, the second is to realize that in the process of moving from a big manufacturing country to a brand powerful country, it is also important to pfer the business thinking from the inside of the enterprise to the research of the customer's mind. Many enterprises have developed from small to large in the past few decades. Inertia thinking often thinks that business starts from the inside, such as management level, marketing level, human resource allocation level, etc., but always lacks customer thinking. The current enterprise needs to stand on the external perspective and competition angle to view its own enterprise action.

Brand size represents market position and competitiveness.

As a strategy consulting firms dedicated to boosting the rise of China's brand, Mr. Bozhi has successfully used the competitive strategy to help Chinese brands such as Fei he milk powder and the electric vehicle in the short span of three years. Xie Weishan said, "if more Chinese entrepreneurs grasp the necessary knowledge of competitive strategy and create a brand with competitive strategies, they may have a better grasp and control over the next ten years."

Author: Huang Xingli