Analysis on Business Model of Clothing Industry

Liu's evaluation of the clothing industry in the interview: the clothing industry is a highly personalized industry, and there is no clothing brand in the world whose market share can exceed1%;

Suppose you want to do a clothing business with a scale of 654.38+0 billion, which can be roughly divided into two business models:

If the average unit price of the product is 100 yuan, then you need to sell 100 million items, and each person buys 2 items on average, then you need 50 million users.

If the average unit price of the product is 10000 yuan, then you only need to sell 1000 items and buy 2 items every day on average, then you only need 500,000 users.

The first is the low-cost scale route: global typical brands, such as Uniqlo in Japan and Blue Ocean House in China;

There are two prerequisites for the establishment of this model: it has a huge traffic portal and continues to attract a large number of users to buy; Secondly, it has the ultimate supply chain and efficient and rapid product development;

Therefore, we can see that all the storefronts of Uniqlo are shopping centers in the most luxurious areas of the city, and they must almost be the largest display shops in this shopping center, so that more products can be displayed and more people can choose products; At the same time, they choose the supply chain all over the world, and reduce the production cost as much as possible through the design idea of the ultimate single product to ensure that customers can wear the most cost-effective clothing in the world;

Many young users say that Uniqlo, the vast majority of their products can be bought with their eyes closed, and there is no need to worry about buying defective products, let alone expensive ones;

The Blue Ocean House in China is another routine. By joining the joint venture mode, the China 2345 line market will be fully laid out with the lowest investment. Because the store investment comes from franchisees, they can quickly make the store the largest in the industry, which is a huge customer traffic entrance; Secondly, through the joint research and development with the supply chain, the high-speed research and development of products and the extremely low cost have also been realized;

China has the largest and lowest cost clothing processing supply chain in the world, so the most important difficulty of brand model is flow;

Let's sort out the traffic changes in the clothing industry:

In the early days of reform and opening up, the supply was seriously insufficient. Wenzhou had the largest number of garment factories at that time, so smart Wenzhou people began to engage in clothing wholesale markets all over the country. On the one hand, they bound the most upstream garment factory, and the downstream built a traffic entrance by building wholesale markets in various places. Then clothes flow through Wenzhou clothing wholesale market into small clothing stores in all streets and alleys of the country, and then flow to consumers. At this time, the biggest traffic entrance is the wholesale market. Whoever has a booth in the wholesale market will have a bank ATM.

Later, some brand-making clothing companies began to appear, and they began to adopt the chain store model. The earliest garment processing factories in Zhejiang and Fujian began to make brands. They learn foreign business models and compete in cities all over the country. Famous business districts and pedestrian streets have also appeared in various cities, such as Nanjing Road in Shanghai, Xinjiekou in Nanjing, Wangfujing in Beijing, quancheng road in Jinan and so on. At this time, the biggest traffic entrance is the clothing stores on both sides of the commercial street. Whoever has a storefront will have a bank ATM.

Later, giant shopping centers such as Wanda, Shimao, Vientiane City and Henglong appeared, and powerful clothing brands began to move from clothing stores along the street to shopping centers. Opening a shop here is the best advertising signboard and traffic entrance;

Later, a series of e-commerce platforms such as Taobao, JD.COM and Ke Fan began to emerge, so many small clothing companies rose rapidly with the help of the dividend period of the early Internet, and a large number of Amoy brands like Handu Yishe were born. These brands were caught off guard by traditional clothing brands, and no one expected that the Internet would siphon offline traffic to online like a black hole.

Then the current live e-commerce and online celebrities bring goods;

In this way, we will find that the clothing brands we see have been gradually eliminated with the change of traffic entrance because they have not followed the trend. At each stage, some short-term clothing brands have been born, but few brands can last for a long time;

Let's talk about the second high-priced luxury brand route first: Of course, our consumers in China can now count on luxury brands all over the world, because most of the luxury brands in the world are located in cities all over the country and earn a lot of money;

As a practitioner in the clothing industry for more than five years, I have always been puzzled. In the 40 years of reform and opening up in China, our economic scale has reached the second international posITion in the world, and it high-tech brands such as Huawei have also been born. However, in the field of clothing, we have been catching up, and no brand has ever been comparable to the world's first line;

What is seen on the surface of clothing is design, style, color, fabric, technology and so on. But its essence is a very comprehensive and complicated spiritual demand such as people's values, taste, culture, cultivation and consumption power;

For example, in chip technology, we can find the smartest people, then invest a lot of money, unite more related enterprises, and then spend time focusing on technical research;

But it is very, very difficult to identify with the spirit of * * at the cultural level;

This thing not only needs to invest money and manpower, but also needs a lot of time to precipitate its own culture and value system, its own taste and belief, and the operating system of the whole brand;

At present, most of the luxury brands we know have gone through at least two or three generations of families for hundreds of years, and they have become world-famous brands today;

We can see that most luxury goods invest a lot of money and manpower every year to promote products, to do global public welfare undertakings, to do global model catwalks and product launches;

Behind this series of operations, the essence is to tell consumers all over the world that I have the loudest and most authoritative voice in this field. I will tell you what will be popular in the future and what will taste better. In other words, as long as you listen to me, everything I say is welcome;

This is what luxury brands have achieved today, and its core competitiveness is the continuous infiltration and brainwashing monopoly of this culture and spirit;

This monopoly is even more frightening than Microsoft's technology monopoly, because it is aboveboard and not regulated by law, and it can be recognized as a beautiful cause by countless loyal users;

So can we surpass it, or set a small goal to cultivate our top international clothing brand in China?

Sure, but you need to see clearly how a top brand was born. It needs people who really love it. After at least decades of continuous concentration, it is possible to slowly find your own brand growth path;

Of course, the two business models mentioned above belong to the two extremes of the whole industry. In addition, we currently have clothing brands for the middle class, as well as a large number of personal designer brands and clothing stores for individual buyers;

The above two modes belong to two extremes, which are mainly reflected in the crowd structure. One is for young people with low incomes, and the other is for high-end people.

In this market, in fact, the most difficult thing to do is the middle class;

The reason is that with the growth of age and experience and the strengthening of purchasing power, the purchasing demand of the middle class will soon change. If brands don't notice this change in time, they will easily be eliminated in the market competition, which is why many middle-class clothing brands will disappear after a few years of prosperity.

The above is a superficial view of the traditional clothing business;

Going back to the clothing customization mode I am doing, it circumvents several shortcomings of the traditional clothing business:

1, pre-sale before production; Traditional clothes are sold after delivery. If the future trend is misjudged and the products produced cannot be sold, it will become the last straw to overwhelm the brand.

2. Zero inventory: on the one hand, inventory is caused by inaccurate or misjudged judgment of fashion trends, on the other hand, it is biased in judging the structure of different sizes; No matter which clothing company in the world produces a large amount of inventory every year, this inventory is caused by these two reasons and cannot be avoided; Therefore, big brands can only be burned and cannot be discounted like low-end brands;

The advantage of our customization is that the above two kinds of inventory will not be generated, and the most inventory will occur at the fabric end. Of course, this is also based on sales volume and is also within the controllable range;

3. Reduce middlemen: Traditional clothing brands are also to reduce the financial pressure of upstream brands. Most of them adopt the city agency model, and most of the inventory risks are transferred to agents. The price must be to improve the profits of middlemen, and finally consumers pay the bill;

In the last two years, we have seen that the price of clothes in the live broadcast room at the factory is so low that we doubt our life. The fundamental reason is the agent price increase at this level and the high operating cost of terminal stores.

Similarly, the biggest challenge brought by customization to our employees is that he needs service personnel to have stronger communication skills, professional matching skills and continuous tracking service capabilities, which is incomparable to the service we experience when we go to the store to buy clothes.

Let's call it a day. There is a lot of content. I will have the opportunity to share more professional content about customization in the future.