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    In The Home Textile Industry, Where Will The Future Growth Of Brands Come From

    2020/10/13 16:37:00 0

    Mengjie

    During the 8-day National Day holiday, Li Jing did not dare to rest for one day.

    Since becoming executive chairman of Mengjie (formerly CEO) in September, he "feels like a second venture.". Because the company is preparing to fight the "last battle", trying to return the past decades to zero, and find the real brand positioning again - what kind of brand is Mengjie going to make?

    During this period, Li Jing has been constantly thinking about these questions: why can consumers choose any home textile brand? Why is there no brand with strong mind? When more and more brands are online, consumers have more choices. What is the reason to choose you?

    "Is it a brand? Is it a price? Is it a paid traffic? Is it something else?"

    Li Jing found that the home textile industry lacks a real head brand. "It's almost the same that we can't identify the core products and prices of our industry. Sometimes we can't identify the core products and prices."

    Although home textile products are just needed, Li Jing told Yibang that the market concentration of the home textile industry is low. In 2019, the market size of China's home textile industry will be about 600 billion yuan. Based on the annual revenue, the total market share of the four leading home textile brands, namely, rolai, mercury, fuana and Mengjie, is about 2.2%.

    Data source: financial report, enterprise check and tabulation: Yibang

    Now, Mengjie wants to be the head brand.

    Li Jing is well aware of the difficulty of brand upgrading, and he is ready to win the battle in at least two to three years. In his opinion, the strategic direction proposed by Mengjie in the past decade or so is actually "patching" and playing a complementary role in operation. It can not reach the strategic height, and lacks a real and complete "top-level design".

    He told Yibang that in the past, all the growth that everyone thought of was addition, filling in and adding things to the original business, but now Mengjie has to do subtraction strategically, "if you don't focus, you will never come out.".

    In his imagination, three or five years later, when consumers talk about home textiles, the first thing they think of should be Mengjie.

    The following is the interview record, edited by Yibang.

    Yibang: what is the impact of this year's epidemic on Mengjie?

    Li Jing: not only our offline business has been affected, but also our online business has exposed problems. However, due to the relatively low online share, the impact on the overall market is very small. It can be said that the epidemic situation has pushed a pause button for Mengjie, which makes us rethink the whole operation structure, operation ability and future brand building of the company.

    Yibang: Mengjie has put forward several strategies in the past, such as "thousands of stores in thousands of cities" and "four wheel drive new retail". Looking back on the past strategy, what are the reflections?

    Li Jing: in the past, we identified these as strategic actions, but now looking back, it is only a choice at the operational level to supplement the short board of operation, or "patch", and it does not systematically and completely design the whole enterprise. For example, we think that the consumption frequency of consumers in Mengjie is low, so we have made a new retail platform of "one room good goods" and added household FMCG products in the small app mall. It will stimulate the consumption frequency and increase the stickiness, including the launch of home care, etc.

    These actions may only be a supplement to the goods at the operational level, equivalent to a value-added service. From a strategic point of view, we can't give it a final conclusion. We are also reviewing the matter, whether we will do it in the future or not, or where the boundary is.

    Yibang: from the perspective of financial data, Mengjie's revenue growth is fast, but the net profit fluctuates greatly and the growth rate is slow. What are the main reasons for this situation?

    Data source: Mengjie financial report, mapping: Yibang

    Li Jing: it's mainly related to our previous power generating points. In the past, more efforts were made in the first and second tier markets. To be honest, you may be able to achieve face saving, but it's hard to do it inside. In fact, the third and fourth tier markets are the dividends of the Communist Party of China, but in the past, we were relatively weak and did not pay attention to it.

    In the future, we will focus on making some adjustments to the business structure and combining face and lining in places with market capacity. In the early stage, we invested more in the supply chain system, which is good for brand accumulation. In the future, we should continue to enlarge this accumulation.

    Yibang: is this reform difficult for Mengjie?

    Li Jing: there must be. The first is the balance between short-term and long-term interests. Enterprises can not "hard land" or completely suspend, but must be corrected while running; the second is the transformation of operating chassis system. It is not enough to have a good strategy from a strategic point of view, so the chassis should stick to it; finally, from the perspective of competition, what can you do, can others do it? How can you do it faster and deeper than others?

    Yibang: what do you mean?

    For example, if you don't pay attention to the traditional data, it will be very difficult for us to make changes according to our own experience. Today, if we don't study users and have no user data, it is difficult to make accurate product marketing.

    In addition, Mengjie is located in the inland (Hunan) after all. There is still a gap between Mengjie and some coastal enterprises in terms of talent introduction, including work rhythm and corporate culture. Therefore, we have introduced some high-end talents and also want to make some activation in this respect.

    Yibang: how does Mengjie prepare to deal with the above challenges?

    Li Jing: on the one hand, we have introduced the practices of some other industries, and grafted some good tools and methods. We should first change our habits and then optimize them. On the other hand, we will make use of external forces, such as cooperating with some consulting agencies. Sometimes our cognition and habits are difficult to change, but it is easier to use external forces.

    At present, the average age of Mengjie's entire e-commerce team is between 26 and 28 years old. We have been making adjustments recently, and the team's age has been declining, which is also an important manifestation of transformation.

    Yibang: Mengjie's e-commerce started later, why?

    Li Jing: I didn't keep up with the pace so fast. Maybe I did, but I didn't have enough understanding of e-commerce. I just understood e-commerce as a sales channel. In addition, the home textile industry, whether it is offline horse enclosure, or online e-commerce, the early stage is basically dominated by price war. We always think that this is not Mengjie's good at, not Mengjie's gene. What's more, we didn't introduce some professionals more quickly at that time. We did it by ourselves.

    This is also the reason why Mengjie is determined to change the whole strategic system. We have decided to do what we are really good at and achieve the brand value.

    What has happened to e-commerce?

    Li Jing: more clearly than before, as a real brand, it should be everywhere, and it should give customers the same cognition everywhere and at any time.

    In this matter, because of the restriction of sales or channels, we always think of what we should do at a certain stage or channel, which is led by some short-term goals and short-term interests.

    If you are really a long-term believer, you should always go in this direction after deciding what the brand will look like in the future. Whether it is online or offline, or various platforms, or even in the face of various users, you should do it according to your own ideas, and insist on getting it through.

    Yibang: what are the important stages of the whole home textile industry?

    Li Jing: in short, it can be divided into four stages. The first stage was before 2000, when the brand was just born. The feature of this stage is that the supply exceeds the demand. As long as there is a brand and the product is not bad, it will sell well.

    The second stage is 2001-2010, each brand in the happy horse enclosure, offline chain franchise or direct marketing expansion, through channel expansion to enjoy dividends.

    The third stage is from 2010 to 2015, with the rapid growth of e-commerce. But at that time, e-commerce relied more on some of the most basic operation methods, and with the impact of price, the brand could quickly come out.

    The fourth stage is from 2015 to now, the home textile industry slowly entered the era of full competition, enterprises began to refine and promote, and can clearly feel the results of previous efforts, now need five, ten efforts to produce this result.

    Yibang: the revenue growth of several home textile companies, such as rolai, mercury and Mengjie, is slowing down. Is there any common reason?

    Li Jing: online, everyone has encountered a traffic bottleneck; offline, after the new generation's consumption habits have changed, the passenger flow of some traditional channels has decreased significantly, including department stores and exclusive stores. In the face of these two major trends, if there is no new action, or there is no reason for consumers to choose you more, the market share (growth rate) must naturally decline.

    Yibang: what is the future direction?

    Li Jing: there are similarities between home textile and clothing in the future. It is impossible for a brand to completely dominate an industry. There will be segmentation points in the industry. For example, the same category has different styles. In fact, consumers can remember that there are not many things about brands, and home textile is still a relatively small industry after all.

    Yibang: in the home textile industry, where will the future growth of brands come from?

    Li Jing: home textile is an industry affected by the upgrading of living consumption. In the past, people would pay attention to houses, cars and clothes, but now they have changed. It is not only the high-end consumers who pay attention to the quality of life, but also many young groups are more and more aware of this awareness and pursue the quality of life in other aspects.

    From the perspective of brand, growth is nothing more than two kinds: the first is absolute leadership brand, and a brand represents a category; the second is to create sufficient value and cost advantages from the upstream, midstream and downstream supply chain. Take the brands of other industries as an example, the former is LV and Hermes, and the latter is UNIQLO. If they are neither good nor bad, the enterprises will be very miserable.

    From Mengjie's gene, we will choose to go up.


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