GXG IPO To Hong Kong, Can It Become Zara In China'S Men'S Wear Area?

In March 20th, GXG, a well-known menswear company, submitted a IPO application to the HKEx to raise HK $2 billion 300 million. Credit Suisse, Citigroup and China International are joint sponsors. The proceeds will be used to repay debt and reduce financial costs; expand brand portfolio; upgrade offline retail stores into smart stores; purchase land and establish advanced free intelligent logistics centers; and general operating capital.

GXG x animals can bring consumption.

The two day GXG x NetEase news "endangered animal" theme immersive flash shop was launched on March 30th at 1F, Zhengda Plaza, Shanghai. In the four thematic exhibition area, listen to animals talk about "cold knowledge", digital screen and animals "online message", with new products feel immersive photo experience...... Through games and interactions, people are concerned about animal problems, stimulating thinking and bringing GXG products to a new height. At the end of the event, a unique T-shirt was released, attracting many consumers to buy.

It's hard to imagine such a deep and creative activity as a Menswear brand. GXG's new retail mode can't help but admire.

New retail mode combining online and offline

New retail is an integrated full channel business model, using online and offline advantages to provide seamless and consistent shopping experience for customers and enhance efficiency in inventory management, supply chain management, product selection and logistics. In addition, customer demand will affect retailers' product development and innovation, thus making customers a cooperative producer. According to consulting materials, new retail has become the main trend of China's garment industry in recent years. China's main fashion apparel brands including Mu Shang have adopted the new retail business mode and integrated into innovative initiatives. In the new retail integration, the company is a leader in many brands.

The mochan group develops their business model over time and spanforms it from the traditional retail mode to an independent, UN integrated online and offline channel, and then spanformed into a new retail business mode. They first started their offline business in 2007 and expanded to online channels in 2010, then spanformed into new retail business models.

Since 2014, Mu Shang has allowed customers to pay online, while products have shipped directly from their offline stores. In addition, in order to ensure the consistency of interests between their online and offline channels, they have gradually established cloud stock sharing and distribution system since 2016, and synchronized their VIP membership plan in 2018. The company will also upgrade their offline retail outlets to smart shops, build their product lifecycle management systems, and enhance their flexible supply chain capabilities.

In the process of exploring new retail business mode, the mosang group has developed the data analysis capability of the new retail plan by collecting and analyzing the data scattered in different management information systems and channels, and showing the strength of big data from data collection, analysis and application.

The core of multi brand strategy: GXG

The mousse group adopts a multi brand strategy and provides a wide variety of products with unique design styles to expand the customer base. At the same time, the company's multi brand strategy enables their loyal customers to buy different brands for their children, spouses and other family members and friends for different occasions, produce products of different ages and stages, and promote cross selling. Through the combination of online and offline channels, they can continue to create brand, expand product supply, accumulate online and offline customer data and grasp the future opportunities, and seek sustainable growth market positioning.

Its brand GXG is the core of Mu Shang's brand strategy. According to the customer survey conducted by consulting, GXG was regarded as one of the most recognizable men's clothing brands in 2017, and its products were oriented towards shirts, coats and trousers. GXG has the longest history and largest customer base in the company's brand. It is our largest source of revenue. It accounted for 66.1% of the revenue of moshang group in 2018.

Considerable consumer spending to boost the clothing market

China's rapid economic growth has pushed consumption spending up. China's total consumption expenditure increased from US $5 trillion and 300 billion in 2014 to US $7 trillion in 2018, with a compound annual growth rate of 6.9%. It is expected to reach US $9 trillion and 900 billion in 2023, with a compound annual growth rate of 7.2%. The increase is mainly due to the rise of the Chinese middle class, the increasing consumption of consumers and the increasing awareness of their spending habits.

The promotion of consumption power and the rapid growth of online customer base are the main driving force for the rapid growth of the total volume of China's online merchandise spanactions. The total volume of merchandise spanactions increased from 2 trillion and 820 billion yuan in 2014 to 9 trillion and 200 billion yuan in 2018, and is expected to reach 16 trillion and 400 billion yuan in 2023.

As of 2018, China has been ahead of the global online retail market in terms of volume and number of online customers, with a total spanaction volume of $1 trillion and 370 billion and a network customer base of 610 million. Compared with developed economies such as the United Kingdom, Japan, Germany, the United States and South Korea, China has a relatively low penetration rate of 43.7%. In view of China's network customer base and the increasing consumption ability of consumers, China's network market has further penetration and growth potential and space.

The retail revenue generated by China's clothing market increased from 1 trillion and 410 billion yuan in 2014 to 2 trillion and 310 billion yuan in 2018, with a compound annual growth rate of 13.1%. This is partly driven by the increasing consumption power of consumers, the more diversified environment of various clothing brands, and the increasing demand for online shopping. It is expected that these driving factors will maintain their momentum in the next few years, so it is expected that the retail revenue of China's clothing market will reach RMB 4 trillion and 20 billion in 2023 and increase by 11.7% in 2018 to 2023. China's major clothing brands including moshang are adopting the new retailer model and integrating innovative initiatives.

Fashion men's wear is one of the fastest growing parts of China's men's wear market. The fashion segment increased from 94 billion yuan in 2014 to 170 billion yuan in 2018, with a compound annual growth rate of 16.5%. Among all the distribution channels, online platforms and shopping malls have achieved the fastest growth rate, and the compound annual growth rate from 2014 to 2018 is 29.9% and 16.7% respectively.

In 2018, the market share of China's fashion men's clothing market accounted for about 21% of the total men's clothing market, accounting for about 7.5% of the clothing market. In terms of total retail income, Mu Shang occupies about 3.3% of China's fashion men's clothing market in 2018 and ranks second in China. In terms of online retail revenue, Mu Shang ranked first in China in 2018, with a total retail income of about 5.2% and online penetration of 36%. Whether from information technology, inventory or supply chain, Mu Shang is in the leading position in the clothing market. The new retail mode is redefining the structure and business mode of the industry, and is stimulating potential demand.