I.T Decides To Invest In Overseas Markets

In April 2014, I.T, which had just completed the 25th anniversary founding ceremony in the previous year, has 7 of its own. brand 5cm, izzue, Aape, MINI CREAM, fingercroxx, b+ab and CHOCOOLATE: the first British store in London department store Selfridges.

Because of geographical proximity, Southeast Asia was the first overseas market opened by I.T. Before the opening of Selfridges's store, I.T opened its first store in Orchard Road in Singapore in 2013. According to the plan, second stores in Singapore and the first store in Malaysia will open this year.

Behind the active opening up of overseas markets is the company's weak performance for three consecutive years.

In June of this year, I.T released its 2013 earnings report, showing that this year's net profit dropped sharply to 27.3%, and issued 3 profit warning in 1 years. Although sales in the mainland market are still up by 16.3%, sales in the Hongkong market, which are more than half of the total revenue, have dropped by 3.3%, while the number of shops in Hongkong has dropped from 295 in fiscal 2012 to 275.

"Last year was a difficult year, and the whole world deviated from our expectations, whether it was national regulation, economic climate, or the decline in average consumption of tourists." Zheng Jingshan, vice president of I.T marketing and international business, explained the reasons for the sluggish performance of I.T in 2013.

In this context, opening up overseas markets has become an effort for I.T to seek new growth. Zheng Jingshan and Selfridges director of women's wear have been known for a long time. The latter worked in Hongkong for many years and is no stranger to I.T. Knowing that Selfridges will adjust its entry brand every two or three years to maintain freshness, I.T will apply to become one of the candidates.

I.T's retail stores are mainly divided into big I.T, mainly selling Comme des Garcons, Maison Martin Margiela and other international fashion brands. It focuses on the small I.T of young fashion brands in Japan and Korea, and the three categories of private brands that come from independent stores. The logic of I.T is that the big I.T itself has a large number of brands from Europe, and Europe itself has a large number of buyers, so there is no advantage in bringing big I.T to the UK, while I.T's private brand is very small in Europe, which may bring more freshness to local customers.

Actually, the 10 one owns. brand I.T is the biggest source of profit at present. Since the 2011 fiscal year, private brand has accounted for more than 50% of I.T's total sales and has been increasing year by year. The location of these private brands is different. For example, the b+ab launched in 1995 is mainly aimed at young girls with a sweet style. The izzue launched in 1999 covers men's and women's clothing and is more avant-garde in design. For I.T, its own brand can be controlled from design to pricing to brand promotion. Besides, the production of its own brand is completed in the mainland factories, and the cost is easier to control. These are the advantages that I.T can not get when operating the agency brand.

"Since 1995, private label has become more important to us. The target is that in the next 3 to 5 years, private brand sales will account for 70%. In 2011, I.T founder Shen Jiawei said in a media interview. According to the information provided by I.T, among these private brands, the highest sales are 5cm, followed by izzue and b+ab.

Frequent cross-border cooperation with cartoon images is a common marketing tool for b+ab and CHOCOOLATE: two brands, such as this year, in May, b+ab launched a series of theme designs in collaboration with the little prince. CHOCOOLATE also worked with graffiti artist Keith Haring. In addition, SpongeBob SquarePants, relaxed bear and so on were once b+ab's cross-border partners.

"Now customers need a lot of new shocks, new ideas and elements. In addition to the basic series, we add some customers' familiar image to keep our brand fresh. Zheng Jingshan said.

Men and women wear two lines of izzue are the first to expand overseas sales outlets. In 2011, izzue has owned counters in department stores in Paris and Berlin, and its stores in Vancouver have also opened. Paris's counters were opened in France after the joint venture with I.T in Beijing. But in addition, the rest of the private brand has been exposed to almost zero overseas.

The negotiations between I.T and Selfridges began in early 2013, and Zheng Jingshan said that the whole negotiations were proceeding smoothly. But London is, after all, a brand new market. Local customers' preferences and their responses to brands have no experience in I.T.

For prudence, I.T and Selfridges decided to test the water through the preparation of Pop-up store in September 2013. At that time, Selfridges was organizing a series of marketing plans related to Selfie. In order to match this theme and Selfridges landmark brick yellow, I.T has introduced the corresponding color Selfie series. clothing At the same time, he also worked with the British fashion magazine Dazed&Confused to hold a party in Selfridges to create a topic.

After six months of Pop-up store operation, I.T's actual sales figures in Selfridges are higher than expected, and the company has gained many market information related to London.

"Selfridges gives us feedback that many Asian customers are patronizing. London is an international metropolis with a wide range of customers, so the mode of customer consumption is also varied." Zheng Jingshan said.

Selfridges is a tourist attraction recommended by all kinds of travel brochures. It is not surprising that there are a large number of Asian customers. But the more important value of Pop-up store is how I.T can make the best choice in selecting goods.

According to sales performance and customer feedback, the buyer of Selfridges suggests that I.T adjust the price of some products. In addition, due to the difference in the size of the customer, the size should also be larger. Because I.T stores are open in department stores, with limited space, buyers also need to avoid the styles that need to be built up at the time of selecting goods, and pick the ones that are simple and easy to wear, so that customers can try them on.

Because British customers do not know much about I.T's own brands, their brand positioning in Hongkong and the mainland has suddenly become blurred. clothes Its style and price can lead the customer's purchase decision. For example, b+ab's original target customers are young girls, but some older British customers do not have the concept of "too old to be suitable for b+ab", so long as they have the favorite style and the appropriate price, they will still buy it.

I.T plans to extend the territory of its own brand overseas expansion. In 2015, I.T will enter some department stores in the United States. Whether in the United Kingdom or the United States, department stores have repeatedly become the channel partners of I.T, which is very different from the strategy of I.T stores in Hongkong and the mainland.

"Unlike the situation in China, department stores in the US are still very strong channels, so we choose to cooperate with department stores." Zheng Jingshan said.

However, as a long-term strategic layout of the overseas market, it is obviously unable to relieve I.T's current dilemma in Hongkong and the mainland market.

I.T is also looking for other ways to reduce the pressure of profit decline, and adjust the design and manufacturing process and marketing direction of its own brand. For example, reduce the design too avant-garde, low market acceptance of the style, the introduction of more acceptable styles. At the same time, it can increase the bargaining power by finding more factories, and placing orders in a factory so as to reduce the cost of OEM and avoid the rising price of clothing. Like most fashion brands, I.T has changed the strategy of opening stores in the mainland in the past few years, becoming more cautious. In addition, it also promotes existing resources, such as shop staff training and store renovation.

High inventory has always been the most questioned question by I.T. Backlog may drag down any expansion efforts. In the last 3 years, I.T's stock days increased from 146.9 days to 157 days. In order to digest inventory, the discount rate of I.T in Hongkong and the mainland has increased significantly, but the side effect is that the brand image of I.T is likely to be damaged so that customers will feel that it is no longer so cool.

I.T is also aware of this problem, but the discount seems inevitable. "I think our customers need some promotion so that they can promote their consumption intention," Zheng Jingshan said. "Of course, we also know that too many promotions will hurt the brand image. We will be very careful about it."

In any case, to continue the growth rate of 25 years, I.T's next step is still facing many challenges.