It Is Difficult For Garment Companies To Build New Brands.

Jiangnan Buyi recently released the 2019/2020 financial year interim results report shows that the company's revenue and profits hit a record high, while revenue growth fell to a single digit, the first time since 2015. Jiangnan Buyi has adopted the strategy of "fans economy" for a long time. Now its performance is slowing down. Is this strategy invalid?

According to the China Daily, in the second half of 2019, the total revenue of Jiangnan Buyi was 2 billion 135 million yuan, an increase of 5.33% over the same period last year, and net profit was 430 million yuan, up 12.87% from the same period last year. The company said revenue growth was mainly due to the upgrading of the group's retail network and the continuous rise in online channel revenue.

Reporters inquired about the company's calendar data, since 2015, Jiangnan cloth clothing revenue, net profit growth has maintained a two digit growth, the single digit revenue growth is the first time.

It is noteworthy that while the growth rate of revenue has slowed down, the growth rate of fan membership has always been slowing down. As of December 31, 2019, the company had more than 3 million 900 thousand member accounts, an increase of about 8.3% over the June 30, 2019 figure of 3 million 600 thousand, significantly lower than the 24% increase in the same period last year. It is worth noting that the number of fans is crucial to the growth of the company's performance. The proportion of retail sales contributed by fans' consumption accounts for about 70% of the total retail sales.

Public information shows that Jiangnan cloth dress was founded in 1994 and was listed on the Hong Kong Stock Exchange in 2016. Ma Gang, an expert in garment industry, told China Daily News that Jiangnan Buyi is the first fashion designer in China to have a distinctive clothing style, tonality and design concept. The unique design style makes the fans of Jiangnan fans more sticky, but there are limitations to the expansion of new consumer groups. At the same time, Ma Gang believes that Jiangnan Buyi's attention to the marketing of new consumer groups is not enough, and the slowdown is not surprising.

Apart from the slow growth of fans, the development of new brand of Jiangnan Buyi seems to be facing difficulties. According to the results of the report, the number of stores in the reporting period decreased by 25, and by the end of 2019, the total number of stores was 1993. Among them, the number of mature brand JNBY stores increased by 48 to 932, an increase of 5.43%, a decrease of 30 to 1008 brands, a decrease of 2.89% in the ring, and a decrease of 43 to 53 in the number of new brand stores.

At the same time, reporters noted that the company's emerging brands and mature brands, growth brand consumer groups overlap. Among them, Pomme De Terre localizes in the 6-14 year old youth group, coincides with JNBY by JNBY's 0-10 year old consumer group, while A Personal Note, Reverb and sketch (Croquis) jointly locate men's clothing business.

Ma Gang told reporters that clothing enterprises to create new brands is more difficult, the test is their product design, channel management, human resources and other capabilities of the integration of the need to expand the enterprise SKU (inventory unit, multiple attributes of the product), which is a challenge for the southern cloth.

Ma Gang believes that after the slowdown in the performance of Jiangnan cloth, we should pay more attention to product innovation and brand marketing. We should open up the source of the number of consumers and expand the new consumer groups. The development of new brands should be done after expanding fans' members, otherwise there will be a risk of "empty bamboo basket."