YOUNGOR Li Rucheng: Only Earn Money To Survive, Business With Gross Margin Less Than 65% Should Be Cut Down.

In the office of YOUNGOR chairman Li Rucheng, there are three large panels on the floor. The above is not about the development process of their own companies, but the three giants of the international luxury industry: the LVMH group, the open cloud group and the open cloud group.

The exhibition board lists a brand of all its brands, and also places their profits and profits separately in a conspicuous place. In the past year, the turnover of the three companies is above ten billion euros, and the profit is between 1 billion 800 million euros and 6 billion 900 million euros, up to tens of billions of yuan.

Li Rucheng liked to sit on the sofa facing the three panels and looked up, all of them were determined to see the good and the wise.

Not everyone can understand this determination.

In the forty years since 1979, he became a factory worker from a farmer, and then became a factory director. He became a "stock god" because he made a huge profit in the stock market, and YOUNGOR became a business tycoon spanning clothing, investment and real estate.

People feel that Li Rucheng's identity is blurred, and the brand of YOUNGOR is also complicated.

But now, Li Rucheng tries to let the outside world know YOUNGOR's determination in clothing. Not only that, he has also set up a new retail transformation with Alibaba, hoping to find a new road for YOUNGOR in the next ten years.

Four fateful choices

In 1979, Li Rucheng was educated in the countryside of Ningbo as an educated youth. At that time, YOUNGOR was not called YOUNGOR, but a youth garment factory in Yinzhou District, Ningbo. It was a small collective workshop with a humble dwelling in the basement of the stage.

Two years later, Li Rucheng entered the factory. He saw before several household sewing machines, and the workers were busy processing vest, cuff and shorts for other companies.

Li Rucheng's first job was a laborer of a scooter and was soon promoted to be the leader of the cutting team. When the company was in danger of failing to do something alone, he went to the northeast for five days to win the business order and save the youth factory in one fell swoop. The next year, he was elected director of the factory.

After that, director Li Rucheng took three choices in the clothing industry.

For the first time, the "Beilun port" shirt was introduced from the OEM to its own brand. The second time was the establishment of "YOUNGOR", the English version of Youngor, which symbolizes youth, so as to seize a place when the foreign brands are strong. The third time, the shareholding system was transformed.

In 1998, YOUNGOR was listed on the Shanghai stock exchange.

The fourth choice appeared in 2013, and the electricity supplier was in full swing. In April of that year, YOUNGOR's official flagship store entered Tmall, opening the era of simultaneous operation on line and offline.

Born in 1951, Li Rucheng believed in the simplest business rule: making money to survive. Li Rucheng, for example, the current electric car industry that burned money and the P2P of Lian Lei, argued that companies and products that did not comply with business principles could not last long.

He fixed a 65% gross profit margin for YOUNGOR's clothing business: "50% is a survival threshold, 55-60% is a profit threshold, and some backlog products are useless at all." Within the company, business lines with gross margin below 65% have been cut down one by one.

In 2018, YOUNGOR's annual revenue was 9 billion 635 million yuan, and its net profit was 3 billion 677 million yuan. Among them, the main industry garment sector revenue was 5 billion 644 million yuan, an increase of 13.22% over the same period, and net profit of 829 million yuan, an increase of 9.34% over the same period last year.

"Tailor God"

In October this year, YOUNGOR held the 40th anniversary conference. At the meeting, such a data was released: 31 billion 500 million yuan for the national tax and 17 billion yuan for shareholders.

This is not just about clothing, but also real estate and financial investment.

As early as 1992, YOUNGOR entered the field of real estate, but the real scale has to wait until the new century. After 2015, the net profit contribution rate of real estate business increased year by year. On the other hand, YOUNGOR is building a healthy town and moving towards the healthy tourism industry.

The stock market began in 1999. YOUNGOR has invested in CITIC Securities, Guang Bo shares, yeco technology, Ningbo bank and other companies, making a profit of ten billion yuan.

Li Rucheng is regarded as China's "Buffett" and "business man", but he does not think so.

He told reporters that YOUNGOR was lucky to go all the way. In the aspect of clothing, when the reform and opening up is longer than the shortage economy, local governments cultivate a large number of township enterprises. At that time, there are land concessions, labor force is cheap, and time and place are favorable. As for his achievements in investment, he also appealed to luck. He thought it was "willfully and willfully".

However, unlike industry, investment profits and losses are more volatile. After 2015, YOUNGOR lost billions of dollars in investment. Public opinion is called "mental calculation."

In the face of changes in investment environment, "tailor" decided not to play.

In May 20, 2018, Li Rucheng announced the return to the main business at the shareholders' meeting, and said that "the United States has Nike, Germany has ADI, YOUNGOR also has the strength to become such a group".

Ningbo, known for its "Hong Bang tailors", owns a large group of clothing chiefs and has chosen different paths in the new era. Taiping bird has invested in making cars outside the clothing business. Formerly, "clothing first stock" Shanshan Group has already stripped the clothing business and become a new energy listed company; Luo Meng has increased real estate, energy and hotel business outside the main garment industry.

One more wing, sub business how to earn money, they are most aware of clothing.

In the future, we will have the opportunity to purchase.

At a YOUNGOR store in Yanan Road, Hangzhou, in December, a forty year old man quickly selected a 780 yuan business suede checked shirt. He said he worked in the system, dressed formally, and bought YOUNGOR once every quarter.

This is indeed the target audience of YOUNGOR.

But after 90 is about to enter the age of 30, 00 will soon join the main consumer industries, the era is changing, how they see YOUNGOR, has become a more important proposition.

On the question of "how to treat the brand of YOUNGOR", a netizen said, "YOUNGOR shirt fabric does not say that I wear it from 24 years old to 34 years old, that is, the version is too general." There are not only a few people who agree with this view, but also some netizens believe that YOUNGOR is a bit old.

In the face of changes in the business age and consumer demand, YOUNGOR is adjusting its strategy.

In 2016, Li Rucheng announced that through the textile and garment industry, "five years to rebuild a YOUNGOR". The main brand YOUNGOR is still the main business. In addition, the high-end men's wear brand "MAYOR" has been launched. It has acquired the right to operate the American brand Hart Max, the main sport outdoor leisure, in the Greater China region, and recently launched the women's clothing brand.

Hart Schaffner Marx

Earlier, YOUNGOR began to study cannabis as the main raw material for the production of costumes. The brand name is "hemp family".

People's dressing thinking has changed. YOUNGOR hopes to cover people's clothing needs under different scenes through several major brands.

Li Rucheng said frankly, "we have to buy the right opportunity in the future."

Reform is forced out.

Not only did the times change today, but YOUNGOR is not the only way to change it today.

Li Rucheng said frankly that every transformation was forced: "in 80s, the relationship between us and shopping malls was bought and sold with money orders. In 90s, we have to set up counters for ourselves. YOUNGOR originally had a shirt suit, now the market has become casual, and we need to increase the development of new products. "

Revolution is not a treat, but reform is not just a few product lines. One of YOUNGOR's latest initiatives is to invest in one hundred million yuan to set up an intelligent factory, and the two is to open shop and fashion experience hall.

Fashion experience Hall

The digital large screen outside the intelligent factory shows the production situation in different areas. At the same time, it shows the working level of each station in the headquarters plant of Ningbo. Once the product backlog is encountered, the supervisor will go over it for the first time. The intelligent factory not only improves the production efficiency of 20%, but also provides the foundation for flexible supply. The private customization can also be generated from this production line.

Outside YOUNGOR Ningbo, there is a fashion experience shop No. 001. There are not only YOUNGOR's major clothing brands, but also intelligent shopping guide robots. At the same time, Rui Xing coffee, amusement park and other different formats are also in the library.

"We do not want to build a place to simply buy clothes, but also to play in it, leisure." Li Ru Cheng said.

What is the effect of intelligent factory and experiential shop and workshop store?

"Far from success now, we are still in the stage of investment, and we need to keep trying." Li Rucheng modest attitude.

Li Rucheng is ready.

Li Rucheng was described as an "expert doctor" by his staff because he was too busy to see one side. But in 2019, he often appeared in the company.

A big plan is under way.

In January 2019, YOUNGOR became a strategic partner of Alibaba A100. A100, based on the Alibaba business operation system, provides a comprehensive one-stop solution to help enterprises speed up the digital transformation.

It was not until October that all the agreements were completed, with thirty or forty pages.

At present, YOUNGOR has fully used the nail office system, and the data platform in cooperation with ALI cloud is also stepping up.

This year, double 11, YOUNGOR small test platform, through data technology to accurately touch the 10 million people online, which brought YOUNGOR 1/4 increments. In addition, YOUNGOR has a whole lot of goods, online transactions and offline services. The total sales volume of the whole network reached 124 million yuan, up by 88.8% over the same period last year.

What is Li Rucheng thinking?

He hopes that through data technology, he can know what consumers need and what YOUNGOR can offer; he hopes that online can serve as promotional and marketing channels, and provide experience and services under the line. Online and offline to fully open up, and finally achieve the improvement of Ping efficiency and human efficiency.

This time, Li Rucheng chose Ali Yun.

As the cloud of Alibaba, Ali cloud is the base of the whole Alibaba business operation system. It not only has extensive and solid practice of new retail transformation in the economy, but also carries 20 years of multi-dimensional business scenario digitalization capability of Ali economy, and provides a systematic solution for retailers to provide technology, e-commerce, logistics, Alipay and so on.

Li Rucheng told reporters that YOUNGOR is implementing the "four 1000 strategies": create 1000 self operated stores with annual turnover of more than 10 million yuan, and cultivate VIP customers who spend more than 1000 yuan over 10 million years.

"I used to know only the pockets of consumers, but I don't know how to serve customers. The service is to give VIP a discount. With the insight of data technology, we can know.

In the future, 3000 stores will be reduced, small and medium-sized stores will be closed, and more stores with more than 1000 square meters will be set up. In the end, the total number of stores is around 1000. And through cooperation with ALI cloud, the 1000 will all become smart stores. Data technology will determine what products sell well and what services are popular.

"This cooperation between YOUNGOR and Alibaba can not be considered from the perspective of efficiency, but from a new perspective of exploration, what exactly can new retail do?" Li Rucheng said with a vow.

It's not just YOUNGOR. At present, 80% famous clothing brands are transforming new retail with the cooperation of Ali cloud, and a series of domestic brands are growing rapidly. Data showed that the average revenue growth of these brands reached 24%.

In order to cooperate with ALI cloud, they are deeply using the capability of Alibaba's business operation system to grow to sustain growth.