The Confusion of the Garment Industry: The Unprecedented Past

In this era that has caused the garment industry to become tangled, the pain is greater than joy, but hope is greater than worry.

In 2016, the apparel market has already experienced three-quarters of the time in a rainy and hard-fought economic environment. Under the mediocre level, it is the industry’s surging wave of worries.

From January to June 2016, the total turnover of the 42 textile and apparel specialty markets monitored by professional institutions in China reached 430.386 billion yuan, an increase of 6.16% year-on-year, and a year-on-year growth rate of 1.88 percentage points higher than the rate in January-March 2016. From January to June this year, it was 1.87 percentage points lower than the growth rate of the value added of the national textile industry during the same period was 0.34 percentage points.

Among them, turnover in 22 markets rose year-on-year, and the total turnover in the rising market reached 378.091 billion yuan, with an average increase of 8.06%. The turnover in 20 markets decreased year-on-year, and the declining total market turnover reached 52.295 billion yuan, with an average decrease of 5.80%.

From the circulation level perspective, the 42 key monitored professional markets include 24 production-oriented professional markets and 18 sales-oriented professional markets. From January to June 2016, the sales volume of the origin market reached 379.04 billion yuan, an increase of 7.39% year-on-year; the sales volume of the land sales market was 51.341 billion yuan, a year-on-year decrease of 2.08%.

Based on the above test results and data, the feeling of the garment market in 2106 is four words: lack of growth.

In an economic year, three-quarters of the time has passed. The performance of this industry seems destined to no longer be staged. In the coming 2017, since we already have this kind of bedding and want to revive and sing a prosperous drama again, it is also not optimistic.

Because the apparel industry has clearly reached an anxious crossroads, it needs qualitative breakthroughs and is looking forward to rapid and comprehensive transformation. However, in this age of complex transitions in technology, culture, and economy, the security transformation that an industry expects is clearly not easy.

In the current clothing market, the predicament and opportunity coexist, with itch and pain. Finding and solving acute problems, objectively and calmly facing the current status of the industry, finding breakthroughs, and getting out of the predicament requires us to have a wise vision, strategic thinking, traditional breakthroughs, and the upgrading of ideas.

Check out the long-standing pains and pains of the clothing industry. You will find that today's situation is by no means a "labor pain."

1, outdated concepts, difficult transition.

In the face of the current situation of the garment industry, many people will certainly say without hesitation that the winter period of the garment industry has come. This is caused by the economic environment, the economic environment, and the impact of the Internet business.

However, what I would like to say is that industry transformation, corporate transformation, business model transformation, and marketing system transformation are more than the ideological transformation and the most urgent transformation of ideas. Many of our entrepreneurs and managers, under the background of collective transformation of the global business model, under the background of the Internet economy and Internet culture, enterprises have still failed to break through the traditional thinking and experience trajectory.

Opportunism and utilitarianism are the "genes" of many Chinese companies. This "gene" does not change and transformation is difficult.

To promote transformation and upgrading, first of all, the minds of entrepreneurs and managers should achieve transformation and upgrading, take the modern enterprise construction as the clear main line, and brand value as the goal, take the green ecological humanity as the realistic path, and take the informatization and data construction as important means. Establish awareness of social responsibility for entrepreneurs, companies, and brands, improve market-oriented capabilities for product development, sense of the era of product marketing and marketing, and professionalism, and comprehensively upgrade the level of technology, products, and management services.

2, grasshopper experience, no change in the plan

The apparel industry has encountered the difficulties of today, although there are economic reasons and the reasons for the changes of the times. However, to say "If the world does not defy the world", it is also its own "doing."

Looking back at the very beginning of the reform and opening up, our entire society has not yet gone out of the “material poverty” era. That is, even the original production capacity is very low. Almost all industries and all products are in the seller's market, and they are represented by fast-moving consumer goods such as food, household, and clothing. In many cities, there are some "buy winds." The garment industry was the biggest “beneficiary” at the beginning of the year, so the time passed two or three decades and still did not come out of “the glory of the past”.

In the southern area, garment factories and clothing workshops quickly emerged, and the textile and garment specialty market came into being. In the era of material scarcity, in front of inexperienced consumers, “quality” seems to be a strange term for almost all apparel products. , color style determines everything. Producers and processors randomly gave it a name and had a code name. Those who did not understand and couldn't spell a piece of Yang Wen Han's “trademark” name were even more widespread and even counterfeit. At that time, the market was hungry and the cultural environment was poorly cultured. The radish was not washed quickly, and the pan was served on the plate. Counterfeiting is widespread, and in the field of intellectual property protection, it is not yet in line with the world. The apparel industry is like a place outside the law; due to the lack of standards, the responsibilities of regulatory authorities are unclear, and the expertise and experience of law enforcement administration in this area is not available, so the market has been Over the past few decades.

Therefore, once faced with industrial transformation, that kind of helplessness and helplessness is not surprising.

Imagine, for decades, if it was not the rise of fast fashion, if it wasn’t for the “Korean storm” on the mainland, and the number of fingers raised, could you find a few national brands that made loud noises?

3, general quality, lack of innovation

In the first half of the year, the retail sales of apparel products of key large-scale retail enterprises nationwide reached 28.35 billion yuan, a year-on-year increase of 23.9%, accounting for 20% of the total retail sales, and the sales of all types of clothing were 142.01 million, an increase of 22.9% year-on-year. The clothing price index continued to fall.

Here are two phenomena worth pondering:

"Storm", the number of fingers raised, you can find a few national brands called loud domestic clothing?

(1) Under the general situation that the apparel sales market is in the doldrums, the growth rate of retail sales of apparel products exceeds the growth rate of overall sales and retail sales during the same period, which is a bit of a contrarian increase;

(2) The overall clothing sales market The price index on clothing and apparel products continued to fall. Manufacturers and mall stores frequently rely on discounts and promotions to “fight chicken blood”.

This situation shows that in the Mainland, first of all, the apparel industry lacks valuable brands, and secondly, they copy each other and lack innovation. In addition, the quality is flat. For each type of clothing, only a few brands can win the trust of consumers.

When the fanaticism of luxury clothing consumption suddenly cools down on the mainland, fast-fashion clothing takes advantage of the situation and makes great achievements. But in just two years, the pace of fast fashion has also picked up. What is the reason? - Brand, lack of quality.

All marketing models and market shows cannot resist the declining trend that quality lacks.

How does a clothing brand shake the market? Quality and innovation bear the brunt of it. The designer brand in the fast fashion field is an attempt worth studying.

Taking Lane Crawford as an example, at present, Lane Cavan has a total of 30 Chinese designer brands, including fashion, accessories and home furnishings. By the end of 2016 this figure should be close to 50. Among them, Ms MIN is a high fashion brand founded by independent Chinese fashion designers in 2010. Always uphold the "abundant in the simple, romantic with fortitude, the classic seeking modern" design concept.

KM, the fast-growing designer fast-fashion brand, is unique in its ingenuity. Integrating these elements of culture and taste into products, it has become the “identification element” of KM, a fast fashion brand, and has become an asynchronous and innovator in the fast fashion field.

For KM, the most effective approach is the brand's balance of fashion and quality. KM's integration of cultural elements won the pursuit of new and young ethnic groups. The price has become popular and the quality has greatly improved, becoming a dark horse in the fast fashion world.

4, outdated channels, unregulated competition

The marketing channels for clothing are nothing more than wholesale + retail, with dealers in between. These channels are expressed in the form of “markets”, “stores,” agents, specialty stores, department stores, and shopping centers where manufacturers seek out or hit the guns.

However, this era is no longer the economic environment of the era of scarcity, and today's channel marketing model and style is with the genes of the material scarcity era. So until today, when our brands and companies face their own products, they are still aware of that era.

There are times when our products and research and development focus on production, and we look at what others are doing rather than staring at customers and staring at the market.

As soon as our products come out of the market, we go to distribution channels and go to the same track of sales channels. All our data is the volume of shipments of these middlemen and channel providers, but they are ignorant of what the customers think. And if these channel dealers get the difference, the product will die. This kind of lazy, innovative, and passive traditional channel marketing, in this era of excess, many products can not wait for exciting performance for many times, but are waiting to die;

There are also foreign companies, especially those fast-fashion foreign brands, with their fast-paced retreading wrists, trying to open up stores, such as a strong typhoon wrapped around a large number of mainland young and old customers.

How many fast-moving retail stores nationwide? From 1997 to 2012, during the 15 years, the number of stores in the top 100 retail chain stores has increased by 30 times. How many times has it grown?

How many clothing manufacturers nationwide? In 2015 alone, 10 brands in the mainland apparel industry shut down 10,000 stores! How many garment companies are left?

Overcapacity, lack of innovation, aging marketing, congestion in channels, and saturation of terminals, are the harsh marketing conditions facing our apparel production today.

A large number of apparel companies, a large number of apparel products, are congested in the aging, same sales channels, thousands of terminal stores, and displaying these homogenous products with the same genetic similarities and faces, for a single brand. There are several brands that can talk about channel and terminal efficiency?

In 2015, clothing discounts and price reductions were prominent, and the average transaction price of apparel was significantly reduced. The growth rate of apparel sales in the first half of the year dropped by 1.3 percentage points year-on-year. - The lack of growth, the aging of channels, and the maintenance of the terminal through frequent promotions. How long does it take for the apparel industry to know the days of drinking and quenching thirst?

The happy time of "the channel is king" is derived from the era of material shortage. For the production companies, they have entered the era of “consumers are king” and the products are sold as “grandchildren”. However, everyone in the clothing industry is still “filling in,” and the relationship between supply and demand is changing. The company’s thinking and philosophy are also changed. Change. Many companies know this truth, but when organizing product development and production, they forget about the market and consumers. They always hope for the inherent traditional channels and discount sales promotion.

In addition, the high operating costs of the channel, forcing garment companies to constantly raise the retail price of the product, the quality is at a discount, consumers have to accept low-cost goods. Enterprises hope that the channels will be used to force, neglecting product innovation and brand building, ignoring quality control, and a large number of products on the market such as short-lived products. The brand value of those garment companies in China is constantly evaporating.

In the Internet era, the quality era, and the era of consumers as kings, garment companies should renew their ideas, adjust their marketing thinking, and integrate Internet marketing and traditional marketing techniques so that they can renew their marketing power. The integration of online marketing system, vertical marketing system, and horizontal marketing system, avoiding congestion, scientifically planning distribution channels, and developing effective marketing channels are the tentative ideas for many future product marketing. I think clothing brands and apparel companies are more worthwhile. Try it.

FADFOCO's brand collection shop captures the shopping psychology of modern consumers in pursuit of individuality, fashion, and fashion, and has a rich product line to extend the customer's stay. FADFOCO's novel scene-style shopping methods, collection of designer brands and diversified experience halls are undoubtedly a brand new clothing industry marketing channel and experience platform.

As a diversified living hall, FADFOCO not only adds more ways of life experience, the overall environment also creates a relaxed leisure atmosphere. The overall design, lighting, color, and product display of the venue combined with the visual needs of a new generation of consumer groups and presented in a more innovative, contextual shopping approach.

KM brand experience shop, both brand promotion, fashion consumer sites. The KM brand experience store is a KM direct store, and is also a collection store of KM brand products. New products on the production line will immediately reach these city stores and be presented to young consumers in the first place. Every third-tier cities will have this brand's flagship store, and it will mainly offer clothing and home products favored by fashionable people after the 90s. The store will promptly collect information about the product's feelings, evaluations, and needs of these KM main customer groups and provide feedback to the headquarters at the first time.

The development of terminal shops to solve the resistance of channel marketing is the KM's efforts in self-built marketing channels. In stores like this, in 2016, KM invested 600 million yuan and added 300 new stores, trying to effectively break through the traditional marketing channels.

Low-end route, cost constraints

The apparel industry is sluggish across the board. Excluding high-end luxury goods and removing the low-end mass market, the current performance is fast fashion. Regardless of the positioning of the price or the positioning of consumer groups, this is actually a middle ground.

Fast fashion stores, products, and sales are all growing, but the core index, profit, is declining.

Looking at the performance of the top four fast fashion brands in the world for the first half of 2016, this phenomenon is clearly presented:

Zara Parent Company Inditex:

Inditex Group's first-quarter turnover reached 4.88 billion euros, a 12% increase over the same period. In the first quarter ended April 30th, Inditex’s net profit rose from 521 million euros in the same period last year to 554 million euros, an increase of 6.3% over the same period. The gross profit margin of 58.1% was lower than the 59.4% of the same period of last year. In the first quarter of 2016, the parent company opened new stores in 31 markets and operating expenses increased by 10%.

H&M

Net sales amounted to SEK 47.74 billion, an increase of 2.2% year-on-year; Group's net profit was SEK 5.357 billion, a decrease of 16.9% year-on-year. The net rate is 11.4%. The gross profit margin was 57.6%, which was lower than the 59.4% in the same period of last year. H&M had a 6% increase in sales management expenses in the second quarter, and an increase of 8% in the first half of the financial report. At the same time, inventory costs are also increasing, an increase of 29% year-on-year.

Uniqlo Parent Company Fast Sales

Sales data for the first three quarters (September-May) of the end of May, sales of 1.43 trillion yen (approximately 91.1 billion yuan), an increase of 6.4% year-on-year; operating profit fell 23% to 145.8 billion yen (92.6 billion yuan), the parent company's profit for the quarter fell 46.4% to 71 billion yen (about 4.5 billion yuan); in the third quarter (March to May), sales of 4.2 billion yen, This was a year-on-year increase of 7.7%; the parent company’s operating profit was 23.9 billion yen, down 13.4% year-on-year.

GAP

Gap's first-quarter sales fell 5% year-on-year, net sales for the first quarter reached US$3.44 billion, and net sales for the same period last year were US$3.66 billion; gross margin was 35.2%, which was lower than the 37.8% recorded in the same period of last year; %.

Judging from the 2016 quarterly results of the four mainstream fast fashion brands, they are highly competitive in the industry and have not made much breakthroughs in product homogeneity and brand image.

In addition to the enormous market competition pressures brought by consumption upgrades, changes in market structure, and personalized demand, ZARA and H&M have only 11.3% to 11.4% of net profit in this quarter, Uniqlo is 5.97%, and GAP is only 3.7%. It further explains the unfavorable prospects for the garment industry as a whole is facing increasing costs and further shrinking profit margins.

The decrease in cost and profit, and even the closure of garment companies, are complicated because of the following:

China's demographic dividend disappeared, human resources costs rose rapidly, raw material prices rose, local taxes and fees increased, exports weakened, corporate operations and marketing costs were too high, capital chain maintenance costs were high, and so on.

It is not difficult to solve these problems. The key is that companies must have determination. Many precedents have inspired us.

(1) Insist on innovation and change from "market-compliant" to "market-oriented" so that the brand stands at the forefront.

The Spanish brand ZARA is characterized by a very fast new style. It takes an average of 10-15 days from product design to trial production to store sales. Of course, it is very fast, and it is almost every three weeks. Goods for new goods, and a lot of the cabinet style only a few pieces, bought no replenishment, so if the customer sees the favorite goods in ZARA, he will not hesitate to "grab" next. It is because of the rapid refurbishment of goods and the ZARA shopping, it always has a freshness, which of course has become an important reason for customers to “turn back”.

ZARA has nearly 400 designers. They design about 12,000 kinds of fashion in one year. Both numbers are far more than other well-known clothing brands. These designers are typical “flyers”. They often fly through Milan, Tokyo, New York, Paris and other places to see various fashion conferences, observe and learn from the latest designs of some top brands, for consumers, Get a big design style at a cheap price and enjoy it.

With the theme of “fast”, ZARA prefers to abandon the follow-up sales opportunities for outstanding models, but also maintain a new frequency and rhythm, and insist on the speed and frequency of innovation.

(2) Laying of product value and brand accumulation

Low prices are a source of fast fashion and a black hand to send fast fashion to the grave, because some fast fashion brands have neglected core value shaping beyond price. Blindly low prices, in addition to compressing the profit margins of products, mislead the market and consumers, and set a vicious circle of cost abyss for themselves.

Of course, the competitiveness of products does not come from the price, but the value of the product laid and the brand's value accumulation. This is the core competitiveness of the brand.

KM is a fast fashion designer brand based on Nordic culture. Its design style tends to be simple and natural in Nordic countries, and it focuses on creating quality and stylish life for the general consumers. Since its inception, KM has insisted on a simple, comfortable, casual and elegant design route instead of pursuing the noble luxury of the product. In addition, following the Nordic designers' conception of product sculpting and natural environmental protection, the raw materials and manufacturing processes of the products are developed and improved to make them more fashionable, high-quality and elegant.

Based on the Nordic culture as the brand foundation, the product design route is simple and comfortable, and leisure and elegant. Through the development and improvement of raw materials and production processes and the effective control of product prices, consumers can obtain the cost equivalent to the cost price. Really achieve a cost-effective shopping experience.

KM insists that fashion is not only reflected in product design, models, and tailoring, but also a form of cultural communication. KM pays attention to the cultural value of the product and the value accumulation of the brand. It integrates the Nordic philosophy of life into the product and allows the customer to experience the true meaning of fashion at the time of experience.

In the past two years, KM has opened hundreds of new stores each year, which is of great significance for them to grasp the market and establish a big data management system. Through real-time feedback from stores, the data can be used to maximize the sales rate for the first time, effectively reducing the risk of unsold inventory. It also clarified the design direction and production plan for the next batch of commodities.

5. Synchronizing with the times, synchronizing with science and technology, and promoting enterprises into modern production management

At present, for the apparel industry, the cost of human resources has become the largest market for operating and competition, both in the upstream and middle and lower reaches. Wages have doubled in the past two or three years, and business operations are under heavy pressure.

In such a business environment, companies must consider the automation and intelligent transformation of production management. From the initial hands-on workshops and semi-mechanized production, it will gradually transform into a modern production model, replacing the traditional production process with a highly automated and intelligent production technology. This society is already a highly intelligent society. In the background of the rapid development of computer technology and Internet technology, it is believed that using machines instead of human original manual operations is a major trend. For clothing production and processing, it not only causes labor costs to be greatly reduced. Its core lies in the leap-forward improvement of labor productivity and the promotion of the overall efficiency of the enterprise.

For traditional labor-intensive industries, such as the textile and clothing industry, trying to seek technical dividend through machine substitution is also an option to get rid of operating costs. At present, Japan intends to use robots to gradually replace highly-paid workers by 2020 to take advantage of prices.

The clothing and spinning industry is a labor-intensive industry. With the gradual disappearance of China’s demographic dividend, it is imperative for the transition to upgrade. Mechanization, automation, and intelligence have become effective ways to transform traditional industries, promote industrial transformation and upgrading, reduce staff and increase efficiency, and ease recruitment difficulties. This has also opened the curtain for China’s “machine substitution”. Zhejiang Province was the first province to implement the “machine substitution” program. In early 2013, the Zhejiang government launched a “four-for-one” project that fully implements “changing cages for birds, machines for substitution, space for land exchange, and electricity supplier for cities”.

For example, the introduction of some automated and intelligent technologies in the field of garment production and processing is very effective in improving productivity.

The garment hanging system is a production unit or system developed on the basis of numerical control machinery, robots, automated warehouses, automated conveyors and other automation equipment and computer technology projects. After a finished product is cut, it passes through about 17 processes and is completed once and for all. The system can shorten the processing auxiliary time, increase the production efficiency, reduce the semi-finished product area, and ensure the product quality. The thread trimmer is also an intelligent production machine that replaces the manual operation. For example, the cutting efficiency of the denim clothing is 8 times that of the artificial cutting. This is an astonishing figure in terms of productivity increase and labor cost reduction.