From The Leading Trend To The Market Closing Shop Storm Continues To Shuffle Speed Up

According to the past years, in the 6 18 war of e-commerce platform, the stores under the clothing industry will also seize the opportunity to promote the discount, return tickets and other models to attract consumers. However, when the epidemic is normalized, this measure seems to be inadequate.

The Securities Daily reporter learned that when visiting a business district in Shunyi District, Beijing, Nike, Adidas and other stores had placed different levels of discount billboards. When the level of epidemic prevention and control increased in Beijing, there was a reminder of "4 people in the shop limited to -5 people" at the door of these stores. There were few customers in the store.

A high-end outdoor sportswear shop staff told reporters that some of the products in the store hit 60 percent off, 20 percent off and two of new products could enjoy a discount. "It's hard to have such a big discount before."

Despite the strength of the discount, the reporter saw that consumers were still few in number during the observation period. "Affected by the epidemic, there are fewer people buying clothes under the line." Another staff member of a clothing brand store told reporters: "the flow of people on weekdays is not large. Some time ago, the level of epidemic prevention and control was reduced, and the flow of people on weekends increased significantly.

It is worth mentioning that, in the case of shrinking consumption, a number of garment giants have delivered a gloomy transcript. On the hot summer day, the global garment industry seems to have entered the winter as a whole.

Garment giant gives up "worst" report card

Recently, the data released by Inditex group, a 45 year old ZARA parent company, showed its first quarterly loss in 2020. Bill Gate, who once surpassed Bill Gate, founded the world's richest group of 100 billion dollar clothing group, and the founder of Inditex group, Theo Ortega, faced with the epidemic "black swan".

It is understood that in the first quarter of the reporting period, Inditex group's 88% stores closed. As of the end of 4, the group's 8 clothing brands, including Zara, had only 965 stores in the world in business, and the number was less than 1/7 of all stores.

Meng Qi, head of Jingdong's new channel strategy, told the Securities Daily reporter: "the root cause of the decline in the performance of garment enterprises is the shrinking of market demand. Affected by the epidemic, the overall income of enterprises has declined; in addition, people's consumption has been reduced as people have reduced outdoor activities. In addition, the production of enterprises is also affected, especially when the upstream and downstream industries are also affected by the impact, people's income decreases, and the public consumption ability decreases.

In the case of unsatisfactory operating data, closing stores has become one of the consensus of giants. Inditex said it plans to permanently close its 1000 to 1200 stores, equivalent to 13% to 16% of its global stores.

Meng Qi told the Securities Daily reporter that "the behavior of closing shop is correct. If the cost of opening a shop is higher than that of operating income, it is also a way to improve the performance in order to lock in profits and turn off some shops that are not well managed."

International Garment giants are tightening their belts, so what about the domestic garment industry?

Flush data show that in the first quarter of this year, 23 of the 53 listed companies in shwan industry - clothing and home textiles showed losses in performance. In addition, 8 home textile companies released the first half of 2020 performance notice, of which 1 expected the first loss of performance, 1 expected earnings continued losses, 2 performance pre cut.

"Although the company's first quarter results have declined this year, the company has gradually resumed the operation of offline stores since the end of March. In April, except for some parts of Hubei, the offline stores have basically resumed business. A clothing industry listed company responsible person to the Securities Daily reporter said.

Another responsible person of a famous clothing brand in China told the Securities Daily reporter: "the company concerned stores during the epidemic. However, with the control of the epidemic, the company's stores have been fully restored. The company has been developing online business, so in the first quarter of this year, the company's revenue continued to grow year on year. In addition, the company has stepped up the production line of medical protective clothing and respirators after the outbreak, and has also contributed to the growth of performance.

As a matter of fact, domestic garment enterprises are able to maintain their performance with the gradual resumption of shops under the line. With the global development of the epidemic, garment export enterprises have welcomed the "order shortage".

Meng Qi told the Securities Daily reporters: "I have been to an export enterprise survey, for various reasons, the goods of enterprises can not export, resulting in a large number of stocks. However, the cost of goods placed in warehouses also has to be paid. Therefore, enterprises have to sell goods at low prices domestically. For example, a garment can sell 300 euros in Europe, but it can only sell tens of dollars in China. "

Data from customs can see the overall picture of garment export industry. According to customs statistics, in January 2020 -5 months, China's textile and apparel exports totaled 96 billion 160 million US dollars, down 1.17% compared to the same period last year, and the decline was narrowed by 8.8 percentage points compared with that in January -4. Among them, textile exports amounted to $57 billion 950 million, an increase of 21.3% over the previous year, and clothing exports of $38 billion 210 million, down 22.8% from the same period last year. In the month of May, the export of respirators led to a textile export of US $20 billion 650 million, an increase of 77.3% over the same period last year, and clothing exports of US $8 billion 910 million, down 26.9% compared to the same period last year.

Battle to win live bonus

Perhaps the performance deficit was stimulated to ZARA. In the 6 / 18 activity, the company made a "discount" of two characters on the front page of the official website of China, occupying more than half of the screens.

In the special period, the battle line and discount become the two key words in the clothing industry.

The above garment industry listed company official told reporters: "at present, the company's online business grew faster. The company has stepped up its activities on Jingdong, Tmall, Taobao and its own official website, and this 6 / 18 event has also been involved.

In response, Meng Qi told the Securities Daily reporter: "the shrinkage of consumption makes the inventory of enterprises rise and the cost is rising. The discount of 6. 18 on the electronic business platform is a good opportunity to clear stocks."

It is worth mentioning that in order to support the growth of online business, many clothing brands have launched "live broadcasting" business.

According to the above well-known brand responsible person to the Securities Daily, "nowadays, many brands are grabbing the" live broadcast "outlet, and the company can not lag behind in brand promotion. For this reason, the company has also set up a" live broadcast "team to publicize.

It is worth mentioning that the Inditex group has already realized this and has begun to lay out online channels at the expense of 1 billion euros to build a live online studio. It is reported that the live room project is located at Zara headquarters, covering an area of 64000 square meters. Inditex group's goal is to increase the proportion of electricity supplier income from 14% to 25% in 2022.

According to the reporter's understanding, whether it's an internationally famous brand ZARA or a domestic brand, "live streaming" has become an essential part of publicity. However, in the face of many brands of live bombing, consumers will choose who?

In this regard, Meng Qi told the Securities Daily reporters: "although the direct broadcast of the business has become the current marketing outlet, the threshold of live broadcast is very low, and the good and bad are uneven. It is not easy to say whether it can bring profits to the enterprise."

"You know, the development of electronic commerce has been more than 10 years, and the relevant rules have been worked out. At this time, garment enterprises want to develop online businesses, unless they are looking for a professional endorsement company to promote them, otherwise, it is very difficult for enterprises to make online trading platforms themselves, and to rush to traffic with Tmall, Jingdong and other large e-commerce providers. Meng Qi said: "when a large number of brands rush into online transactions and competition intensifies, enterprises may have a higher online transaction cost than the offline outlets in order to obtain a lot of traffic."