Attention Should Be Paid To The Structural Optimization Of Garment Industry After The Outbreak.
The epidemic situation has been gradually controlled, and it will impact the clothing retailing in the short term. In the long run, the domestic leading brands are expected to enhance their competitiveness in the epidemic situation. Under the new regulation, the structure of the garment industry will be speeded up.
Since the outbreak of the epidemic, the consumer industry has been faced with unprecedented challenges and crises, especially the consumer goods which are mainly sold under the terminal. The clothing industry is the first to bear the brunt. The epidemic posed a great challenge to the sales of the apparel industry in the first quarter and the three quarter. 2020Q1 clothing retail declined as a whole. The Q3 industry was facing the inventory of unsalable clothing in winter, and the annual performance was under pressure. But the epidemic has a catalytic effect on the long-term fundamentals of the garment industry.
Control of epidemic situation and short term impact on Garment Retailing
The retail end of the textile and garment industry has been affected in the short term, and 2020Q1 apparel retail sales are expected to decline year by year.
In 2019, China's macro-economy slowed down, and the overall retail sales of clothing were relatively low. Besides the growth of children's wear and sportswear, the growth of women's clothing, men's wear, home textiles, footwear and underwear and other sub sectors grew steadily, and the garment industry entered a stage of steady growth in the short term.
In 2019, the growth rate of clothing retail sales decreased in all months compared with the same period in 18 years. Assuming that there is no effect of this epidemic, Q1 clothing consumption in 2020 is flat with that in the same period in 19 years. The epidemic has dragged down the Q1 growth rate of 10~20pct. Through preliminary calculation, it is estimated that the consumption of Q1 clothing in 2020 will decline by 10~20% compared with the same period in 2020. Assuming that Q2, Q3 and Q4 clothing consumption is flat with the same period in 19 years, the total consumption of clothing in 2020 is expected to decline by 1.44%.
In the short term, the impact of the epidemic on the garment industry revenue. The retail sales under the traditional Spring Festival consumption season have been greatly affected. Subsequent epidemic prevention and control requires residents to reduce their outgoing activities, which will also have a negative impact on the retailing of clothing lines.
In the first quarter, the probability of garment retail falling is very large. If the epidemic is controlled at the end of Q1, Q2 will have retaliatory consumption. The retail Q2 of clothing is expected to rebound, but taking into account the influence of terminal inventory and other factors, the impact on the performance of the apparel industry will continue to the three quarter. So the current estimate for the whole year is Q1 low, Q2 high, Q3 low and Q4 high.
2.1. at present, the apparel industry is in the stock stage, and the competitive advantages of domestic brands are becoming increasingly prominent.
Apparel retailing has gone through four stages of development. At present, the industry tends to be stable. The clothing industry has gone through four stages since 2000: the first stage is the high-speed development stage of 2000-2008 years, and the compound growth rate of garment retail is as high as 20.74%. At this stage, the main garment enterprises are developing rapidly, but the degree of branding is not high.
The second stage is the 2009-2011 year continuous expansion stage, the industry retail compound growth rate is 32.08%, and the apparel industry companies are coming to the market boom. The third stage was the adjustment and reform stage of -2016 in 2012. The influx of overseas brands caused great pressure on domestic brands. Domestic brands began to adjust the development mode, and the compound growth rate of the industry was reduced to 10.11%. The fourth stage has been adjusted since 2017, and the local brands have begun to rise, and the industry has been recovering slowly.
Apparel retail growth slowed down, the industry entered the stock competition stage. Since 2019, influenced by Sino US trade war and deleveraging policy, the overall performance of apparel retailing has been sluggish. In 2019, the growth rate of apparel retail sales was lower than that of the zero growth rate in each month. In April and October, negative growth occurred even in the whole year, year-on-year growth of 2.9%, and the growth rate dropped by 5.01pct compared with the same period last year. Therefore, the apparel industry has a large stock in the large consumption system, but the growth rate is below the average, indicating that the apparel industry has entered the stage of relative stock competition.
2.2. epidemic has a great impact on overseas clothing brands, and domestic brands have advantages.
Overseas clothing brands have been shut down by a large number of Chinese stores affected by the epidemic, and their performance has been significantly affected. Under the influence of the epidemic, overseas brands have sharply closed their stores in China, including Nike, PUMA, Levi 's, Columbia, Muji and other brands, which closed more than 50% of the total number of stores in China.
As the Chinese market has become an important source of income for overseas brands, the epidemic has made overseas brand performance significantly under pressure. Sales of Adidas in the Greater China region plummeted by 85% since the lunar new year. Sales of Nike, PUMA and other companies have declined sharply. Canadian geese expect annual revenue to decrease by 318 million ~3.95 billion yuan. Under the catalysis of the epidemic, Gap group's Old Navy announced its full withdrawal from the Chinese market in March 1st. It has become an overseas garment brand that has withdrawn from the Chinese market after New Look, Topshop and Forever 21 in recent years. The epidemic has accelerated the adjustment of overseas brands' Chinese business.
The competitiveness of overseas brands has shown a downward trend, and the advantages of domestic brands are highlighted. In recent years, the domestic clothing brand has been actively distributed, and the market share has been dispersed by virtue of localization. It has mastered a certain market initiative. In the past 2014-2018 years, the market share of local brands in the top ten brands of clothing sub sectors has significantly improved, and the competitiveness of overseas brands has declined. Among the top ten brands in the sports market, the share of the domestic brand market has increased from 27.8% to 37.2%, raising 9.4 PCT, and the brand influence of Anta, Lining and other enterprises has been continuously strengthened.
In the top ten brands of children's wear market, the share of the domestic brand market increased from 8.7% to 10.5%, and the market share of children's wear Bala Bara increased significantly. With the accelerated upgrading of domestic brands in R & D, supply chain and e-commerce, consumers' recognition of domestic brands continues to improve, and the competitiveness of overseas brands is gradually weakened.
2.3. domestic clothing brands respond positively to epidemic situation and competitiveness is expected to improve
Domestic brand layout, online retail, and effective promotion of re employment are expected to enhance competitiveness through the epidemic. The leading domestic clothing brands have responded quickly to the epidemic and grasped the opportunity for consumers to increase their online time significantly. Taiping bird made use of WeChat membership, small program distribution, live broadcast and other forms of power to launch online channels. In the first ten days of February, the average daily retail sales exceeded 10 million, and it was officially resumed in February 17th.
The sales of DAZZLE and d 'zzit two sub brands reached 4 million yuan on the online day of WeChat distribution. Bosideng also completed the sale of 90% of winter clothing down the line before the Spring Festival. The sports brand represented by Anta releases online teaching video, which leads to fitness craze and stimulates consumers' demand for sports fitness products. The domestic clothing brand is expected to enhance competitiveness through the challenge of the epidemic, and upgrade and optimize its own business.
2.4. epidemic catalyzed leading clothing brand concentration is expected to improve
The epidemic has a great impact on small and medium-sized garment enterprises, and it is expected that the industry will be cleared up. In the textile and garment industry, there are 5 companies whose cash flow can be maintained for no more than 4 months, and the cash flow of 9 enterprises can be maintained for no more than half a year.
Under the double squeeze of supply and demand, small and medium-sized garment enterprises will face a more serious survival crisis if the epidemic can not be finished in the short term. It is expected to accelerate the clearing of the garment industry and promote the improvement of the concentration of the leading enterprises. This estimate is based on the data of listed companies. The number of non-listed company in the whole industry is nearly 20000, and non-listed company will be more affected by the epidemic.
Leading brands have strong resistance against online channel resources and brand influence, which is expected to achieve industry consolidation after the outbreak. In recent years, textile and clothing leading brands have been vigorously laying out online channels. The online revenue of 2019H1 Semir and Taiping bird has reached 41.26% and 29.09% respectively, and online revenue has maintained a relatively high growth rate. Therefore, it has a strong ability to resist the epidemic situation and is able to alleviate the sales impact under the line through online efforts.
The leading brand itself has a high brand influence and appeal, and has a high degree of loyalty among fans. It can quickly drain on line, and achieve breakthroughs in online sales. The epidemic has enhanced the operation capacity of domestic brand fans, and accelerated the process of online channel layout. After the end of the epidemic, consumers' accumulated demand for clothing shopping will usher in an outbreak. The resources of the declining SMEs need to be integrated, and leading enterprises are expected to take this opportunity to achieve the improvement of concentration.
In recent years, the domestic leading brand supply chain reform has obvious effect, which improves the overall efficiency and flexibility of the supply chain. Brand design is closely following the international trend, strives to create a high-end quality and fashion brand image, optimizes and adjusts the channel structure, promotes the appearance of stores, and improves the shopping experience of buyers to increase customers. The optimization of domestic leading brands in supply chain, brand and channel makes it more competitive with other domestic brands. Under the background of the epidemic, the optimization of the industry structure is expected to accelerate.
3.1. domestic leading brand supply chain reform effect is obvious, operation efficiency tends to rise.
Domestic brands are closely following the advanced management mode of foreign countries, and the supply chain reform is effective. The local excellent clothing enterprises learn the international mature fast reverse flexible supply chain mode, based on the characteristics of the Chinese market, from the various aspects of the supply chain to improve, enhance the overall efficiency and flexibility of the supply chain, and timely respond to the market changes. Supply chain reform has made domestic leading brands more competitive.
Leading brands in China continue to push forward the supply chain reform to enhance the efficiency of supply chain reaction. Semir and core suppliers launched the "anti season order" mode, using the basic production of off-season production, to reserve capacity for the single product in the peak season, to maintain the quick response capability of building the explosive products, to optimize the distribution of the supply chain capacity, and to achieve a win-win situation between the company and the suppliers.
Bosideng serves all channels in the country through the central distribution center (CDC), manages all inventories with a set of logistics management systems. CDC is based on the distributed deployment, adopts the "CDC direct distribution of stores" first level distribution process, and responds quickly to the market demand, so as to achieve the nationwide enjoyment of goods. Domestic leading brands are generally cooperating with core suppliers to create synergies in terms of design, order patterns, and so on. Taiping bird uses advanced TOC management system, store DRP system and cloud warehouse digital merchandise management system to improve efficiency. Leading brands in China are actively carrying out reform and optimization of supply.
The upgrading and optimization of supply chain has led to the rising of domestic leading brand's operation level and competitiveness. Through the combination of futures and spot, the domestic brands will place a small order with suppliers, and combine the sales situation flexibly to catch up orders, so as to reduce the stock backlog and create sales volume to boost sales.
Through the digital reform of logistics system and store terminal, we build a logistics inventory system that meets the enterprise's own characteristics, enhance logistics flexibility, reduce inventory pressure, and provide information support for the design and production of the upstream stage, and further improve the fast reaction capability of the supply chain. The upgrading of the supply chain has raised the new efficiency of the leading brands in the country, enhanced the management capability of the company, and improved the operation level. Compared with other domestic brands, the supply chain has enhanced competitiveness and accelerated the upgrading of the domestic brand concentration and the optimization of the industry structure.
3.2. brand design progress achieves better domestic leading brand
Fashion enterprises brand products and marketing fashion, to create a better brand image. Facing the fierce market competition environment, garment enterprises have expanded their vision from the existing industry to the substitute industry, redefined the consumption groups and their needs, and created new demands from them. After the brand function has already had some advantages, it will be injected into fashion, so as to expand its consumer groups and expand brand influence.
Leading enterprises keep up with the international trend and strive to design high-end products with high quality and fashion. On the one hand, Chinese brands actively introduce Chinese designers with overseas backgrounds. Designers of returnees can not only get in touch with western fashion elements, broaden their design ideas, but also "adjust measures to local conditions" and rely on local industrial resources and markets to grow rapidly.
On the other hand, many famous Chinese brands have been improving their brand design capabilities by employing foreign design consultants, international excellent designers and brand designers, which not only maintain brand domestic fever, but also expand the international market. Leading brands constantly improve their design and enhance their brand image, attracting more customers.
Take Lining as an example, the company is working together to expand consumer groups and optimize the design, so as to enhance brand influence in an all-round way. On the creation of new consumption demand, Lining carried out many cross-border cooperation to attract young consumers. In July 2019, Lining worked with EDG, a chess club, to integrate EDG elements into the joint products, and for the first time invited the electric contestants to endorse, "China Lining x China EDG" launched a heated debate. It not only attracted a large number of EDG fans, a large number of fans and sports fans, but also displayed the brand's cool attitude, laying the foundation for entering the competitive fashion market.
In promoting the progress of design, Lining integrated Chinese culture into costume design, creating a brand image with distinctive characteristics and leading trend. The gradual development of the company's fashion line Lining China can not only promote product sales, but also update brand image to expand customer base and enhance revenue. In 2018, Lining's revenue increased by 18%, and 2019H1's revenue increased by 33%. The fast growth of revenue showed that the market recognition of the company's sports and fashion products was higher.
3.3. channel optimization helps domestic leading brands enhance their image and focus on customers.
The proportion of electricity suppliers and shopping centers in domestic brand channels has increased, which has brought impetus to revenue growth. Leading brands in China have been distributing electricity providers, cooperating with traffic giants and building O2O system to achieve rapid development. On the one hand, online cooperation with Tmall, Jingdong and other platforms has been stepped up. On the other hand, the corresponding supporting facilities such as marketing system, logistics center and storage center have been built and improved.
Anta double eleven sales in 2019 reached 1 billion 830 million, an increase of 61.95% over the same period last year. Shopping center channels will become the future layout trend, and domestic leading brands will scramble to enter. The shopping center has larger area, more traffic, higher store efficiency, better marketing effect, and domestic brands are accelerating the layout. Channel optimization enables domestic leading brands to gain more competitiveness.
The high-end image optimization of stores has made China's leading brands attractive and competitive. In 2017, the first image of Hai Lan's family was upgraded to a new appearance in Tianhe City, Guangzhou. The signboard changed from the traditional "Hai Lan home" to "HLA", and the whole store was mainly composed of cool white, simple and modern style; 2018 In 2003, Bosideng updated the store logo and simplified the font design. In the same year, Semir's first new image fashion design concept shop appeared in Shanghai. The store adopted a white main color and a concise and lively design style, and the design combination of sound, light and electricity created a sense of vitality and fashion. In addition, Taiping bird, Anta Lining and XTEP are also upgrading the shop decoration style to cater to the young consumer groups' shopping preferences.
Take Anta as an example, the ninth generation stores are upgrading their image to attract customers. 2019 5 In June, Anta's first nine generation store officially unveiled in Chongqing, which is different from the past colourful. The ninth generation stores used the technology blue with a great future sense, and had the words "Chongqing" and "Ba Shi De". They had the local characteristics very well. The upgrade of cloud shelves, the automatic cash collection system, the mobile screen, the triangle video and the fitting room door video were attracting the consumers' attention.
In September of the same year, the characteristics of "digital", "younger" and "specialized" stores in Chongqing store were extended. Anta's second nine generation stores opened up in Shanghai's tide holy land Yu Garden. The word of mouth was a success again. A more scientific way of clothing display was adopted, and the matching of lights, background colors, functional props and costumes was adopted to make the store image more damp. More Anta stores will continue to upgrade their images, bringing different shopping experiences to sports consumers and enhancing brand competitiveness.
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