UR Founder Li Mingguang: Product Innovation, Customer Research Is The Key.

There are 91 groups of men and women dressed in fine clothes in the park of Yunxiao Road, which is composed of three modern industrial wind office buildings and a cafe. This is the headquarters of URBAN REVIVO (hereinafter referred to as UR) in Guangzhou. The low-key and simple design is in sharp contrast to the bright UR retail stores in the major business circles.

"Over the past 13 years, we have chosen to focus more on products, and we want to drive sales with product design and cost performance. Brand building is not our strong point," Li Mingguang, founder and director of UR, admitted to reporters. "UR's brand power is not comparable to the international brand at present. This is also the goal of upgrading in the next ten years." next, we will take the initiative to tell consumers what UR is. What does it represent? Finally, the dual driving force of product strength and brand power will be formed.

CCFA China International Fashion Retailing Industry Summit will be held soon. At the entrustment of the China Chain Store Association, the reporter recently interviewed Li Mingguang, founder and chairman of UR, trying to understand how the Chinese brand that had been established for 13 years survived and maintained its development in the "encirclement and suppression" of foreign brands. How will UR lead China's fast fashion future when international fast fashion brands are losing China?

　 Product driven: "faster and more fashionable than competitors"

From the first clothing retail store opened in Guangzhou in 1998, the UR brand was established in 2006, and the sales of the "double 11" UR line this year broke 24 hours, and the sales volume of UR online and offline in 2019 is expected to exceed 5 billion. In the 20 years of Li Mingguang's continuous exploration in the Chinese clothing market, it is also the 20 most severe change in China's fashion retailing industry.

"The clothing industry has always been the competition of the Red Sea. It is not a sunset industry, nor a sunrise industry. It is a very traditional industry with a huge market scale". Li Mingguang said that the development mode of the garment industry is "cake grab" operation. "To understand the rules of the cake game, you can survive."

When UR was founded in 2006, it was at a time when foreign brands entered the Chinese market. In 2006, ZARA, a representative of Spain's fast brand brand, entered China and opened its first store in Nanjing West Road, Shanghai. In 2007, H&M from Sweden officially entered the Chinese market. Its first store opened in Shanghai Huaihailu Road. In the same year, Holland's C&A opened the first store in Lujiazui to Zhengda Plaza in Lujiazui.

"Two or three years after 2006 is a very painful stage for China's apparel industry". On the one hand, international brands begin to enter the Chinese market and are just in line with the change of Chinese consumers. The demand for fashion understanding and taste is increasing. Chinese clothing enterprises, product positioning and style are all more traditional, unable to meet the demand of new generation of consumers for fashion. On the other hand, Chinese clothing brands in traditional department stores are priced relatively high, generally 5 to 8 times the cost. Fast fashion brands such as H&M and ZARA are more popular with consumers, so consumers flow to international brands.

How did UR survive in the cracks of international brands? Speaking of the survival rule of UR, Li Mingguang emphasized product power, brand positioning and consumption trend.

At the beginning of its founding, UR did not have the ability to compete with the international brand. Therefore, it had been concentrating on itself, from 1 stores to 2 stores and 10 stores. UR invested a great deal of cost in designing the center, building its own R & D team and solving the supply chain problems.

It is the time and energy spent in polishing the basic capabilities that push UR forward step by step. In 2010, UR sales exceeded 100 million. After 10 years from 2010 to 2019, the annual growth rate of UR exceeded 60%, and 2019 sales will exceed 5 billion. The year-on-year growth in sales and sales figures in the new store show that it is right to adhere to the strategy of product leader.

Secondly, in the backdrop of the rush of international fast fashion brands, UR will only win a foothold by firmly cling to the essence of fast fashion mode and faster and more fashionable than rivals. Fashion design and speed are the two largest DNA of UR. Since its establishment, the UR store has always maintained new features every Tuesday and Friday.

In addition, behind the rapid growth of UR, the driving force of China's consumption upgrading trend can not be ignored. "The concept of Chinese consumers is changing, becoming more street, more fashionable, more personalized, and no longer a section that can sell for two years," Li Mingguang said, which promoted the fast fashion mode to open up a blue sea in the competitive hot clothing industry.

　　 Repositioning: from ZARA students to "fast luxury fashion"

"Our ideal location for UR consumers is from 18 to 40 years old, but the data find that our customers are more concentrated between 18 and 25 years old," Li Mingguang said. This phenomenon surprised and distressed him. The surprise was that the popularity of UR among young consumers was beyond the expected period. The trouble was how to make more mature white-collar people like UR.

In 2015, UR repositioned the brand from "fast fashion" to "fast luxury fashion". From that time on, UR officially bid farewell to the role of ZARA students and made a breakthrough. "Fast luxury fashion" is a concept that no one has mentioned before. UR is also facing a road without any Chinese brand.

It is not easy to change the role from followers to leaders, and the further optimization of supply chain is needed to support the transformation of UR brand.

According to the introduction, at present, UR's supply chain system is all outsourcing suppliers: the cooperation time is longer, the tacit understanding degree is higher, and at the same time has a set of perfect supplier management system, including admission control, time, quality and cost control.

In the face of future brand upgrading and scale expansion, existing suppliers need to think about how to optimize and upgrade, focus on helping some willing and capable suppliers to become strategic suppliers, and attract more high-quality suppliers from outside to enter the supply chain system, and cooperate with the design team and other resources. "The modernization of management and the improvement of organization and management capabilities are important prerequisites for our ability to move towards a higher goal." Li Mingguang said.

　　 Challenge of reshuffle: pursuing 10 billion growth target in global market

It is worth noting that after ten years of rapid development, nearly two years fast fashion in the domestic life is no longer so good. In 2018, Britain's fast fashion brand Topshop and New Look quit China. In May this year, the fast fashion brand Forever 21 also announced the withdrawal from China, while H&M, ZARA and GAP all declined in 2018 compared with 2017. On the other hand, Supreme, OFF-WHITE and other tide cards are rising rapidly in the young group, which will further impact the fast fashion market.

In this regard, Li Mingguang believes that now the fast fashion market is facing a key shuffle period. China's fast fashion has gone through the rapid growth of the past few years. Now it's back to a very critical year. Many brands are sliding down. Some of the brands that are not very hot will even quit the Chinese market. The first ones to be eliminated must be those who do not attach importance to product research and do not attach importance to customer research and lack of innovation capability.

For UR in the transformation, this year is also a key year for no progress. In 2019, UR expects sales to exceed 5 billion, and further puts forward the goal of moving towards 10 billion. Li Mingguang puts forward strategies such as branding, globalization and sunken market.

Over the past 13 years, UR has established a certain number of stores and covering the market. The brand potential energy in China has also been established. In the next ten years, it will enter the era of brand competition.

According to the introduction, UR has more than 280 stores in the whole country, 30% of which are self operated, and three or four cities are relatively few. In the future, UR will expand to the next tier cities and further expand the scale of the market. Next year, 60 new stores are expected to open in the country, of which three or four will be 30~40%. In addition to the increase in offline stores, the electricity supplier channel is also one of the growth targets targeted by UR. This year, double 11 sales of UR reached 120 million on the same day, and for the first time, it rushed into the Tmall 11 double billion club. The proportion of online sales will continue to increase in the future, with a target of 30%.

In addition, UR has entered the international market in 2016 and has opened stores in Singapore, Thailand and London. Internationalization is a landmark turning point for UR and will continue to expand in overseas markets in the future. "UR brand is a new starting point in the overseas market. It is a challenge for us to go through the process of 0 to 1, whether it is cost or time." Li Mingguang said, in addition, the difference between consumers and products in overseas markets and how to manage a more internationalized team of employees is a new challenge for UR.