Gradually Deviate From The Product Standard Of Hailan Home, Consumers Can Continue..

The public's impression of Hailan's home seems to remain in "visiting Hailan home twice a year, men's Wardrobe". Since its replacement last year, Hailan home has embarked on a multi brand strategy: replacing the "men's Wardrobe" slogan with "the whole family's Wardrobe", and replacing the spokesperson with Lin Xinqi and Jay Chou.

What needs to be noted is that the three-step process of endorsement, variety show and slogan change has not brought too much new increment to Hailan home. Taking Nanjing's major business districts as an example, new eye observes that young people are more inclined to go shopping in fast fashion brands, and people's impressions of Hailan home are mostly "old-fashioned style" and "low cost performance".

As we all know, the rise of Hailan home first relies on one-stop sales model to open the market, then relies on the light asset model to achieve rapid expansion, and finally to the online battlefield to carry out the brand transformation of youth. Not long ago, the "tieshanyao" of wanghong brought a polo shirt of Hailan home. Although this online Red marketing method can set off a short-term shopping tide, the "local flavor" feature deviates from the inherent brand keynote of Hailan home. Based on this, this paper focuses on dismantling the former clothing leader Hailan home.

01 asset light dividend period

In the seller's era, traditional footwear enterprises have their own business logic.

Generally speaking, most enterprises will choose self-processing products. Some players also choose to produce by OEM. Generally speaking, raw materials such as fabrics and dyestuffs are supplied by upstream suppliers, and downstream channel suppliers book products for the next season in advance at the ordering meeting. The ordering meeting is held more than twice a year, which is an important link between shoe and clothing enterprises and channel operators. Therefore, shoe and clothing enterprises can focus on product production and do not have to worry about sales.

The traditional shoe and clothing distribution mode of this ordering meeting is usually several months or even more than half a year in advance. Under the situation of overcapacity and market competition saturation, it becomes more and more inappropriate. After all, pressing goods to channels does not mean that sales can be completed. Therefore, in the Internet era, when the information between buyers and sellers tends to be equal, most players in China's shoe and clothing industry have to "de stock" operation due to e-commerce. We should know that even Li Ning lost nearly 586 million yuan in the first half of the transformation.

When the first wave of shop closures comes, most shoe and clothing players are struggling with the choice of "going online". They are also Hailan's home, which is highly dependent on the operation of physical stores. They can survive the difficulties mainly by their own jungle law, that is, the asset light business model with the "upstream credit sales system + downstream financial franchise system" as the core.

To be specific, Hailan home has moved its position in the industrial chain a step forward, that is, to give up self-made products, remove the role of factory, and outsource all products to suppliers. Now they mainly play the role of traditional shoe and clothing enterprises in the era of seller, but the brand still belongs to Hailan home. The supplier will sign an agreement, and after two sales seasons of about 1.5 years, Products that have not yet been sold will be cut off and returned to them by Hailan home.

This mode of production outsourcing makes Hailan's home light.

When the goods are initially put into storage, Hailan home will not pay all the payment in one time, but pay no more than 30%. The follow-up funds will be settled monthly according to the actual sales of the goods. The practice of selling goods on credit is a relatively strong cooperation mode, which requires the brand side to have a strong voice and a relatively proper system. Traditional shoe and clothing enterprises transfer the overstock that may be encountered to the upstream of the supply chain.

Some people here will ask why the suppliers are willing to cooperate with Hailan house under pressure? The reason is very simple. Due to the rapid expansion of Hailan home's stores, the purchase volume of Hailan home is far higher than that of other peers ordering from suppliers. Enterprises in the production and supply chain benefit from the advantages of scale, which reduces the cost of suppliers and the purchase price of Hailan house.

After the establishment of the system of selling goods on credit in the upper reaches, new questions arise.

In 2012, when traditional shoe and clothing enterprises, represented by MetS Bonwe, were struggling with "de Stocking", why could Hailan family maintain rapid expansion? The answer is the unique downstream financial franchise system in the downstream, which can also be called "quasi direct marketing" mode.

Hailan home shortens the agent link of the franchise mode, and directly signs contracts with the franchisee stores. The ownership of the store belongs to the franchisee, but the management right belongs to Hailan home. The franchisee is like an investor's role, and Hailan home is more like an investment and financial product. At that time, franchisees needed to prepare about 2 million yuan to enter the distribution system of Hailan home, half of which was used to bear the expenses of shop rent, water and electricity property, decoration, industrial and commercial taxes, salaries and logistics transportation, and the other half was the deposit of goods delivered to Hailan home. ?

In other words, this model allows franchisees to become shopkeepers without worrying about the lack of experience and the hidden dangers of unsalable goods. Selling the supplier's payment on credit and collecting the franchisee's franchise fee successfully lightened the heavy assets, greatly boosting the rapid expansion of Hailan home, and also apportioned the inventory and financial affairs to the suppliers and franchisees.

In 2014, Hailan home's reverse acquisition of Keno technology was successfully listed, with revenue of 12.338 billion and net worth of 2.375 billion, and the growth rate of both revenue and net * * exceeded 70%, proving the asset light mode. Under this mode, the net interest rate of 19% and the net asset rate of 40% make many listed companies in the clothing industry hard to catch up with.

02 inventory problem

It is an eternal truth that scale will also reverse.

When the expansion reached a certain degree, Hailan house fell into a bottleneck period. From 2015 to now, the growth of Hailan home's revenue and net * * has gradually slowed down, and the decline of brand power in the market has made it difficult for Hailan home mode. According to the annual report, the asset impairment loss of Hailan home in 2018 was 380 million, a substantial increase of 203% compared with that of 17 years. This loss devoured the weak growth of Hailan home.

In the view of industry insiders, the decline in sales of Hailan home is due to the sluggish environment of the clothing consumer market and the intensification of peer competition. According to the data of the National Bureau of statistics, China's clothing sales in 2018 decreased by 24.8% year-on-year; On the other hand, it lies in the neglect of the product itself.

Although Zhou Jianping once said at the shareholders' meeting that "all other designers are in Hailan home", it can be seen from the financial report data that in 2017 and 2018, the R & D expenses of Hailan home were only 25.04 million and 49.02 million, accounting for 0.14% and 0.26% of the revenue respectively, far less than that of Meibang and SEMAR, The R & D expenses of the two enterprises in 2018 were 156 million and 364 million respectively.

The essence of Hailan house's "asset light model" is to rely on its own brand power and supply chain ability, and use the funds of suppliers and franchisees to realize rapid expansion of scale. However, the premise of all this is that the products are sold well. If there is no such product, a larger scale will only bring more troubles and problems, and zero inventory operation will no longer exist.

Although Hailan home can realize rapid expansion through asset light mode, due to the fact that franchisees do not bear the responsibility of unsalable goods, the inventory of Hailan house includes both the inventory in the company's warehouse and the goods not sold in the store, which brings huge inventory pressure. Although the company has passed on to upstream suppliers and downstream franchisees, this is actually due to the rapid growth of Hailan home, which to some extent digests this kind of trade.

However, as Hailan home enters a growth bottleneck period and its growth rate slows down, this kind of transfer to upstream suppliers and downstream franchisees may break out at any time. On the one hand, the tour suppliers will refuse the credit mode of Hailan house; on the other hand, the downstream franchisees will also reduce the enthusiasm of prepayment.

The implication is that the rapid expansion of Hailan family, which relies on the light asset model, may fail.

03 sales puzzle

As mentioned above, one of the important reasons for the decline in sales of Hailan home is the backward product design.

But in fact, the "local flavor" of Hailan home is closely related to its asset light model. Under its asset light model, suppliers are different from general OEM factories, which allow both credit sales and inventory. They have more say in design, while suppliers with unsalable goods tend to choose classic and popular models with a wide audience. Hailan home lacks the essence of fashion brand, and its premium power as a channel brand is too weak, Directly into the red sea of products.

It needs to be clear that no matter how the times change, fashion is the solution to the vitality of the clothing brand.

In 2020, affected by the epidemic situation, Hailan home has a bad start: 2020 ? Up to the third quarter of the year, the performance of Hailan home has declined significantly, with its operating revenue down 19.82% year on year, and its net worth decreased by 50.69% year on year. In this context, Hailan home had to make changes. In November of the same year, Hailan home announced that Zhou Jianping, the founder of the company, formally handed over the enterprise to his son Zhou lichen, who was the chairman of the board and a member of the strategy committee.

Faced with the dilemma, the 32 year old Zhou lichen gave the answer is to do online new retail, to younger transformation.

As a result, Hailan home from a single men's wear brand, began to transition to the full range of clothing. The brand slogan, which has been used for more than ten years, has been replaced by "the wardrobe of the whole family". At the same time, a new brand spokesman, Jay Chou, has been officially announced. The focus of advertising sponsorship has also shifted to young and middle-aged audiences such as "making trouble in heaven", "China captain" and "Chinese Geography".

From the perspective of brand operation, these measures are only superficial innovations. On the one hand, a clothing brand that has been stable in mature and business type begins to pursue younger, which will lead to wrong layers in consumption and have contradiction in cognition. On the other hand, there is a mismatch between the impression of online Youth Innovation Activities on brand communication and the in store experience that remains unchanged offline.

At present, Hailan home is in a period of strategic confusion.

Both want to play the advantages of offline, through the experience accumulated in the decoration, layout, display and other aspects of physical stores and the number of large-scale physical stores to continue to develop, but also envious of the dividend of the Internet channel, want to eat both sides, but in the scene layout, brand changes and did not keep up.

We can often see that when some clothing players encounter the slow growth and decline of revenue, they are often attributed to the strong impact of online convenience, which is the result of channel deviation. But in fact, this is only the reason of appearance level. The core of Hailan home's sales model with self selection as the core and fuzzy product design is impacted and eliminated in the multi category, diversified and diversified online platform.

Because of this, Hailan home's sales model is of little benefit to its online business. The era of shortage economy has long passed, and now is the era of excessive supply of goods and overflow of goods. Now, the comfort and aesthetic feeling of goods have already surpassed the practicability, and even some commodities put aesthetic feeling in the first place. To open the online business market, we need to have strong brand potential and product characteristics.

Hailan home, which gradually deviates from the product standard, may become the next noble bird.