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The Biggest Dilemma Restricting Chinese Garment Enterprises Is "High Inventory"

2022/4/6 13:34:00 0

In the past, the biggest dilemma of Chinese garment enterprises was "high inventory". Later, the data-based and intelligent flexible supply chain gradually got out of the dilemma to a certain extent. Now, the change of global economic situation and resource market makes the cost of garment enterprises rise; At the same time, some labor-intensive production links are further transferred to emerging countries with lower land and labor costs; And the domestic product homogeneity and technical content need to be improved; In addition, the slowdown of GDP growth and consumption growth... A series of current situation make the transformation and upgrading pervade the whole clothing industry.

From offline to online, from domestic to foreign, from brand creation to acquisition, garment enterprises actively try to transform, which reflects the survival state of the whole industry. At the same time, the financial reports disclosed by the head e-commerce platform and some clothing enterprises are not lack of eye-catching performance.

According to the fourth quarter of 2021 and the full year's financial report released by China's head e-commerce Jingdong group on March 10, 2021, Jingdong group's net income in the fourth quarter of 2021 was 275.9 billion yuan, a year-on-year increase of 23.0%, and the annual net income in 2021 reached 951.6 billion yuan, with a year-on-year increase of 27.6%. Among them, Jingdong clothing, as a gathering place of high-quality clothing, has made remarkable achievements in 2021 -- designer brands, new fashion brands, and industrial belt stores such as Qinghe cashmere, Putian shoes and boots, Jiangyin thermal underwear, and Xiaolan men's underwear opened one after another. On November 11, only last year, more than 6000 new brands participated in the promotion, At the same time, more and more Chinese garment enterprises take advantage of this to accelerate the realization of digital transformation, and at the same time, Jingdong, as a platform, continues to boost the high-quality development of the clothing industry.

Compared with Jingdong's optimism, Alibaba, another leading e-commerce company in China, is more cautious. As early as two years ago, 5 million businesses around the world participated in the "double 11" of Alibaba's tmall e-commerce platform, which once opened up a new way for foreign trade enterprises. Now, its quarterly financial report from October to December 2021 released on the evening of February 24 shows that the third quarter revenue of fiscal year 2022 is 242.58 billion yuan, with a year-on-year increase of 10%; The net profit was 20.429 billion yuan, down 75% year on year. According to the data, as of December 31, 2021, the number of consumers in Alibaba's Chinese market has increased to 979 million. It is expected that the target of annual active domestic consumers reaching 1 billion by the end of this fiscal year will be completed as planned.

At the same time, the e-commerce part of Alibaba's core business grew negatively. For the first negative increase since its establishment 18 years ago, the industry generally believes that the turning point has arrived. To be sure, one billion means that growth can withstand the ceiling. After China has reached 1 billion users with a population of 1.4 billion, it is high cost and has little effect to excavate the growth space. Taking the data of December 2021 as an example, the sales of women's wear / men's wear / children's wear / home textile / sports footwear of Alibaba platform were - 20% / - 37% / - 33% / - 38% / - 45% on a year-on-year basis, of which the sales of women's wear category was + 1% year-on-year, showing weak growth. As a result, Ali has made greater efforts to develop its overseas market, which has already extended its tentacles in 2010, which provides a huge space for its new growth. Lu You, who was promoted to general manager of tmall clothing industry at the end of last year, also said publicly at the "business trend conference" of Taobao education that tmall has launched a tool called "style digitization". In Taobao app, "style" permeates every corner of clothing business.

The strong momentum of China's online business is recognized globally. Therefore, the financial report data and strategic layout of the two e-commerce platform enterprises fully show that no matter how hard the physical concept is, according to the existing business development, no matter how hard the physical concept is, it can only achieve a percentage growth, and will certainly go to the limit point. Only by finding the breaking point and adopting the second curve growth mode, can we realize the multiple increase and the sustainable future.

At this time, in contrast to the financial reports of clothing enterprises, in addition to Jiangnan cloth clothing's performance report in the first half of 2022, revenue increased by 7.3% to 2.485 billion yuan; In 2021, the company's operating revenue is about 15.419 billion yuan, an increase of 1.41% over the same period of last year. These enterprises with slight growth under pressure, such as Erdos, LiLang and Tebu, have bright data, which may indicate that Chinese garment enterprises have found the second growth curve from different dimensions.

01 Ordos "whole life cycle" and

Green and sustainable development of whole industry chain

In the 2021 annual performance express disclosed on March 4, Ordos preliminarily estimated that the total operating revenue of the company in 2021 was 36.411 billion yuan, an increase of 57.34% over the same period of last year; The total profit was 9.629 billion yuan, an increase of 280.20% over the same period of last year.

As a leading enterprise in cashmere garment industry, Erdos has developed from "Platinum" cashmere to modern cashmere industry, circular economy industry, and other industries mainly focusing on energy reserves and clean energy. Just as in 1989, relying on reform to implement self-management, the Yike ZHAOMENG cashmere sweater factory, which was built through compensation trade, Ordos began to diversify after seeing the ceiling of cashmere industry at the beginning of this century. Adhering to the concept of "whole life cycle" and green and sustainable development of the whole industrial chain, the green operation system of the whole industrial chain of cashmere clothing is constructed. The advantages of circular economy of the whole industrial chain are brought into play. Through the development of environmental protection and green process, the whole process of production from raw materials to products is realized, and the traditional manufacturing industry is empowered with science and technology and innovation, Change "manufacturing" into "intelligent manufacturing".

Such as Erdos clothing enterprises, is becoming the epitome of diversified development, internationalization, high-end, green innovation and development of China's clothing industry, especially leading enterprises.

02. LiLang lilanz new sales model

Portfolio for sustainable long-term growth

Lilanz, a Chinese men's clothing brand listed in Hong Kong, reported on March 18 that the group's revenue increased by 26.1% to RMB 3.38 billion in 2021.

Although it does not have the performance volume of Ordos, this 35 year old leading Chinese men's wear enterprise is experiencing all-round innovation of products, channels and brands and transformation of sales mode. According to Mr. Wang Dongxing, chairman and executive director of China LiLang, Mr. Wang Dongxing, chairman and executive director of China LiLang, said: through the reform of sales mode, channel optimization, product rejuvenation and Internet plus strategy, the sales performance is ideal, and the total retail value of the group exceeds the expected period.

It is understood that among lilanz's main series and less is more light business series, the latter will change to self-supporting mode from the second half of 2020, and by the end of 2021, there will be 290 stores, with a net increase of 3; About 40% of the former stores have implemented the "consignment mode" in the spring and summer of 2021, and 966 stores have been transformed into franchised stores by the end of 2021. Such a change in sales mode has greatly reduced the average turnover days of trade accounts receivable from 101 days to 57 days. It is worth mentioning that LiLang is constantly improving product personalization and original design, and the latter is promoted to about 77%, and the proportion of products using unique fabrics developed by the group is about 50%. At the same time, we implemented the strategy of "providing value for money products". Under the multiple "combination fists", the gross profit rate increased, and the sold out rate increased from 65% to 73%.

Sales channel management data presented in 2021 annual performance report disclosed by LiLang

03 special step is active and active with scientific and technological innovation

Open sports consumption market

Tebu, a representative of domestic sports enterprises, released its full year performance in 2021 on March 16. Its revenue reached a new record of 10.13 billion yuan, an increase of 22.5% compared with 2020. Among them, the revenue of main brands increased by 24.5%, a record of 8.841 billion yuan.

Behind the 10 billion yuan, consumers' recognition of "Tebu" brand is gradually improving. In this financial report, it is worth noting that Tebu's new brands, gasway, Paladin, sokoni and Melo are gradually making efforts, and their revenue is growing rapidly. According to its "Five Year Plan" (2021-2025) released in September 2021, the revenue of main brands in the future will reach 20 billion yuan, with an annual compound growth rate of 23%; The total revenue of new brands reached 4 billion yuan, with an annual compound growth rate of over 30%.

From export to domestic sales, from following to innovation, from OEM to overseas brand acquisition, Tebu has evolved from a foreign trade agent factory to a global sporting goods enterprise, and has completed the comprehensive coverage of the market segments. As a representative, domestic sports brands are in the business transformation period after personalized and experiential consumption. At this time, in the face of an increasingly open and active sports consumption market, running, fitness, sporting goods and other industry segments are restructuring the supply and demand structure and connection, so as to better meet the demand of consumption upgrading. Special steps are taken to strengthen science and technology investment and polish product functions. Combing its financial reports in recent years, we can see that since 2015, the R & D investment of Tebu has remained above 2.4%, and in 2021, the R & D investment is about 252 million yuan, accounting for 2.5%. Taking running products as an example, Tebu launched its racing family 160x2 in 2021 0、160XPRO、300X2. 0, and the race training shoes 260 for marathon runners and mass runners with training needs, providing world-class technology experience for Chinese runners.

Tebu has mechanical testing laboratory, material research and development group, sole R & D level, sample R & D studio and other scientific and technological innovation research and development center

With the disclosure of more financial data, it is clear that: under the background of globalization, with the strong trend and rapid expansion of international brands in the Chinese market, domestic enterprises have stepped out of the bottleneck of traditional mode and extensive operation under the multiple tests of customer group, capital, inventory and strategy, and the whole industry is evolving.