Channel transformation in the footwear industry

High inventory, so that the apparel industry complained about, "inventory clothing people can not wear three years," the saying goes. Where will these stocks go?

Discounting stores to become the mainstream The first to experience inventory pressure is the sportswear industry. After decades of staking and enclosure, the sports and apparel industry began to show signs of fatigue after it reached its peak in 2008.

Since 2011, the total inventory of sporting goods has remained high. By the first half of 2012, the six sportswear brands – Li Ning, China Trends, Anta, Xtep, 361 Degrees and Peak, have reached a total inventory of RMB 3.721 billion, surpassing 2011. Annual inventory of 3.699 billion yuan. Closing stores and discounts have become the main theme of domestic sports brand enterprises.

Anta’s public relations department explained to reporters why this was a high inventory: “The first is the weak global economy, while the dependence of China’s textile and garment industry on exports is greater. The second is the change in consumer demand and the operation of some existing companies. The model can not meet the consumer's individual needs very well, resulting in the company's high inventory.” Anta said frankly: “High inventory has become an important issue that restricts the development of the sporting goods industry.”

Although clothing export data improved in the first quarter of this year - according to customs statistics, China's total exports of textile and clothing increased by 15.7% in the first three months of 2013 from January to March 2013, but this is not enough to drive away the haze of the garment industry.

Zhu Qingyu, a light industry researcher at China Investment Advisors, told reporters: “From the first quarter's data, textile and apparel exports appear to be recovering. However, from the perspective of the global economy is still in a downturn, demand and trade are weak, textile and apparel. It is still a long time before the industry really welcomes warming up. At the same time, due to the increase in domestic labor, rental costs, and the continuous appreciation of the ***, the price advantage of garment exports is constantly weakening.

For the sluggish export industry, some clothing companies did not care. Taiping Bird ceo Ou Limin said in an interview with reporters: “We are more concerned with domestic trade, and the growth of foreign trade has little to do with the growth of the company’s performance.” In addition, including Anta Most apparel companies in China also expressed "cautious optimism" about the status of exports.

It can be seen from this that the lack of domestic demand and sluggish foreign trade do not seem to be the reason for the high inventory.

Frozen three feet is not a day of cold, in the slightest strategy partner Lü Mouxiu view, the garment industry today led to the high inventory, mainly due to the "brand + wholesale" model caused by supply and demand imbalance.

China Mobile founder Chen Yihong stated in public that “Chinese brands do not control retail channels, and they rely on agents to complete sales, which makes the industry often suffer from the phenomenon of out-of-stock products and mediocre product backlogs. Brand owners, on the market The changes are very slow and the news is lagging, making the pressure on the stocks bigger and bigger."

Under this circumstance, "integrating terminals and improving store efficiency" has become the direction of most shoe clothing brands.

In August 2012, Li Ning announced that it would stop publishing the order data for the 2013 ordering trade fair on the grounds that the ordering data could not represent the future sales of the company. Anta also stressed that it will adopt a flexible replenishment system and a flexible supply approach to meet the needs outside of the order.

It can be seen that for the currently widely used "big wholesale" business model, Li Ning, Anta and other industry leaders have the intention to adjust and transform.

In fact, the offline conversion of “wholesale” to “retail” has received unprecedented attention from the shoe and clothing industry. The transition from wholesale to retail focuses on increasing the proportion of direct-operated stores and building its own retail terminals.

At present, Anta, Seven-Wolf, Peacebird, Haopai, Rich Bird and other companies have already or are engaged in this vast project. According to the statistics, as of 2011, Septwolves had 530 directly-operated stores, accounting for only 13.3% of the total stores. The company plans to add 1,200 directly-operated stores within two and a half years.

As domestic garment companies frowned upon an inventory overstock, fast fashion brands such as zara, h&m, and Uniqlo frequently took advantage of the domestic market. Lü Mouyi believes that this shows that foreign companies' operating models are more suitable for the current development.

Zara is different from the ordering system adopted by most traditional clothing companies, but the headquarters actively distributes goods according to the sales of each store. The design team located at the headquarters can clearly see what styles, colors, and sizes are required for each single store, each city, and each area, and how much it will take for each replenishment.

Zhu Qingtao told reporters that to go to inventory must open up more marketing channels, for more markets, including online e-commerce is a very good choice.

Anta company disclosed to reporters that the company is currently preparing to build e-commerce channels, chairman Ding Zhizhong personally in charge of this area.

However, for many apparel companies today, online business is more like a "sewer" strategy in order to eliminate inventory. Lü Mouzhu said that most garment companies are actually dumping off-line goods online and making profits offline.

There are obvious drawbacks to this model: If the company's positioning of its own products is not clear and cannot balance the relationship between online and offline business, it will have a negative impact on the brand.