In September, Su Ming was obviously much busier than before. He kept busy all day long. As he was about to get off work, another foreign trade company in Hangzhou called to inquire about the purchasing estimate of two plaid fabrics. Su Ming is the general manager of a fabric manufacturer in Jiangyin and has been involved in the textile industry for more than 20 years.
The number of customers inquiring about plaid fabrics has increased significantly recently, and ZARA is also contacting him about the purchase of plaid fabrics. “The colorful plaids are vying for beauty. This year and next will be the explosive years for plaid coats.” Su Ming wrote this in his work diary two weeks ago. As an upstream person, he can always be the first to sense the fashion trends of the next season.
Su Ming can also be the first to capture the signals of brand rise and fall. Su Ming has had contact with some well-known domestic mass apparel brands such as Metersbonwe, La Chapelle, and Yichun. Su Ming is not surprised that some well-established domestic shoe and apparel brands have recently closed stores, left the market, and experienced sluggish growth.
Side effects of expansion
In the past two years, the capital chain has been tight This is the commonality discovered by Su Ming. “Their biggest drawback is that payment is too slow, and the payment period must be at least three months. If the funds cannot be transferred, it is equivalent to occupying our own funds.” La Chapelle was also a regular customer of Su Ming. Last year La Chapelle Bell’s payment for goods has been delayed for a year. Starting from May last year, Su Ming slowly terminated the cooperation with La Chapelle. According to Su Ming’s knowledge, there are also large fabric suppliers that have been pressed for tens of millions of payments. , “It is true that the more you do, the more tired you are.” In contrast, the payment settlement time for export clothing brands is at most one month.
The tightening of the capital chain is the result of problems in brand operation. In Su Ming’s view, a large part of the reason for the result is that the local clothing industry has been under pressure in the past few years. Brands are blindly optimistic about the market.
“They always think that as long as they can produce it, they can sell it. If every boss thinks like this, supply will exceed demand in the end.” Su Ming told reporters that in the past few years , Fabric procurement requires spot production. For example, when I came to purchase today, I had a hunch that a piece of clothing could be sold for 20,000 pieces, and the demand for fabric was 20,000 meters, which would take 3-5 days to produce.
The construction period is short, and the cost is high. At the same time, the sales volume is judged based on “beating the head” and “trying luck.” “When the market was good in the past few years, there was no problem with mass production. , once the market situation deteriorates, it will eventually become inventory.” In contrast, Su Ming’s description of foreign brands is “rational” and “accurate in quantity”. Taking Uniqlo as an example, they adopt an order system, 2 Thousands of meters of fabric need to be ordered at least one month in advance.
Currently, according to Su Xin’s observation, the industry has generally shifted to an order model. However, the inventory constraints accumulated in previous years are a reality that the domestic clothing industry has to face. This time The epidemic has exacerbated this problem. Judging from the overall performance of the industry, as of June 30, 2020, there were 177 listed companies in the textile and apparel sector of the Shanghai and Shenzhen Stock Exchanges (A-shares), with an inventory turnover period of 232.33 (days), an increase of 35.08% over the same period last year. At the same time, in the first half of the year, the losses of companies in the textile and apparel sector reached 24.86%, and more than two-thirds of the listed textile and apparel companies’ mid-year income declined to varying degrees compared with the same period last year.
Judging from the semi-annual reports released by some listed apparel companies, Heilan Home’s inventory is as high as 8.218 billion yuan, accounting for 101.43% of the current operating income; Semir clothing inventory is 3.957 billion yuan Yuan, accounting for 69.01%; Metersbonwe’s inventory is 2.053 billion, accounting for 37.58%.
In the years when local clothing brands were aggressively trying to seize the market, the inventory problem was covered up. To be more precise, the brand thought that inventory was the support for the scale of the company. However, it was unexpected that the inventory would become a “side effect” and then develop into a “chronic disease” that drags people down.
Taking Metersbonwe as an example, the “agency + franchise” sales method increases the number of intermediate links, making the supply chain cumbersome, inefficient, and inflexible. The accuracy of inventory sales forecast is poor. By the time evaluation indicators such as inventory turnover rate come out, inventory management problems are already a result and cannot be corrected. In the early days of listing, in order to expand its scale, Metersbonwe also proposed a rigid target of “25% annual increase” for franchisees.
Su Ming had an intuitive experience with Yichun in terms of complexity and inefficiency. “Their management system is like that of an elderly person,” Su Ming told reporters. Only two people can negotiate the purchase of fabrics. In the WeChat group with Yichun, there are at least a dozen people. “They even have to stamp and print. Two dedicated people are responsible for it.”
In addition, the complexity is also reflected in the demand for fabrics. Su Ming told reporters that the fabrics purchased by domestic brands are relatively scattered. One kind of fabric is picked thousands of kilometers away, with many varieties and small quantities. Moreover, every promotion requires fabric factories to bring new fabrics. “Designers think consumers like new fabrics,” Su Ming told reporters. I like new things, but in fact, some classic fabrics are more popular.”
Difficult to copy ”
Su Ming, standing at the fabric link, saw the different choices of different brands. Extending from the production end to the consumer end, and looking at it the other way around, he seems to be able to sense that there is a reason behind the “popularity” of some brands.Manufacturing – “Rhinoceros Intelligent Manufacturing Factory” hopes to apply digital insights into the manufacturing process to achieve true integration of production and marketing and help small and medium-sized businesses solve pain points in the production supply chain. According to industry insiders, the “Rhinoceros Intelligent Manufacturing Factory” may solve the shortcomings of the long-standing “production-based sales” model in the clothing industry, minimize trial and error costs, reduce inventory pressure, and provide services to small and medium-sized enterprises with weak risk resistance capabilities. Provides greater resilience.
On the other hand, Guochao has begun its road to revival; there are also some old brands that are constantly being impacted and are also desperately trying to save themselves.
In the past two years, national fashion has become the key word that brands are competing for. The scale of my country’s sportswear industry reached 114.7 billion in 2018, with a growth rate of more than 9% for two consecutive years. Li Ning has participated in three international fashion weeks by virtue of its national trend. Not to be outdone, Anta has acquired many foreign brands. Even Taobao brands have won the favor of celebrities. The revival of national fashion is in contrast to the decline of fast fashion.
There are also brands that are finding new ways to save themselves. Semir’s Balabala children’s clothing brand is the product of its self-rescue. In addition to the adult consumer market that has been squeezed by its peers, it has opened up the children’s clothing market to save the curve. Peacebird breaks the data barriers between online and offline departments and relies on new online feedback to discover popular products in a short period of time and pursue orders or make new design supplements; each department has changed from the original method of receiving hot product instructions in order to a round table Discussion system, all departments take action at the same time around popular products…
Thousands of sails pass by the side of the sunken boat, and thousands of trees spring in front of the diseased tree. Where is the way out for domestic brands? It is true that China’s garment industry has reached a crossroads and is experiencing a “painful and happy” transformation period.
Note: (Su Ming, Wenbo and Xiaoyu are pseudonyms)</p
