Looking Into The Future From The Three Logics Of The Overall Rise Of Domestic Clothing Brands
In recent years, with the gradual rise of domestic brands, more young people are willing to try domestic brands. With the rise of national trend, many local original brands are sought after, especially the clothing brand market ushers in the "blue ocean" opportunity.
Three logics of the overall rise of domestic clothing brands 01、 Logic 1: After the epidemic, the recovery is strong, and the clothing industry, especially functional brands, still maintain a high profile overall
Strong recovery after the epidemic: Since 2021, the recovery of textile and clothing has been strong. From the perspective of social zero data, the overall growth rate of textile and clothing is higher than the growth rate of the total amount of social zero, especially in March, April and May, the growth rate slightly corrected. The reason behind this may be that 618 slightly adjusted the pace of consumption in May. The market outperformed the market: In 2021H1, the textile clothing (Shenwan) index rose 8.27%, outperforming the Shanghai Composite Index by 1.47% and the Shenzhen Composite Index by 2.58%. The attention of the overall market has increased significantly, and the trading volume has also increased significantly.
The track of sports shoes and clothing is highly prosperous, and the growth rate is expected to pick up after the epidemic. 1) The growth of sports shoes and clothing track is better than the overall growth of shoes and clothing: for a long time, the growth of the global sports shoes and clothing market scale has been better than the overall growth of the global shoes and clothing. After the low period of 2011-2013, the growth of China's sports shoes and clothing track rebounded and far exceeded the overall growth of shoes and clothing. The sports shoes and clothing track has a high prosperity. 2) The growth of China's sports shoes and clothing track is better than that of the world: in 2020, the scale of the global/Chinese sports shoes and clothing industry will reach 315 billion US dollars/49.2 billion US dollars. Under the influence of the epidemic, the scale of China's sports shoes and clothing market will only slightly reduce, and its performance is better than that of the world. From 2014 to 2019, the average annual growth rate of China's sports shoes and clothing industry exceeded 10%, exceeding the global growth rate. As the impact of the epidemic fades, the growth rate of China's sports shoes and clothing industry is expected to return to the high growth level before the epidemic. 02、 Logic 2: The industry concentration of functional brands is increasing, and the market share of the rise of domestic brands continues to increase
The overall national strength has increased significantly. China's total GDP rose from 1.3 trillion US dollars in 2001 to 14.7 trillion US dollars in 2020. In 2007, China's total GDP exceeded that of Germany, and in 2010, China's total GDP exceeded that of Japan, ranking second in the world. Since 2010, the gap between China's GDP and that of the United States, the world's largest, has gradually narrowed. In addition, from the perspective of development quality, the per capita GDP has increased from less than 1000 US dollars in 1990 to 11000 US dollars in 2020, and the disposable income of the national residents has also increased from 18000 yuan to 32000 yuan in just seven years, with a cumulative growth rate of 76%. The improvement of the overall national strength can enable consumers to eliminate the inherent awareness of domestic brands to a certain extent, and enhance their attention to domestic brands. Two Paths for the Rise of National Brand: Functionality or Efficiency There are two major paths for the rise of domestic brands (including clothing and cosmetics) in China, namely, functional brands and efficient brands. Functional brands have strong brand labels and strong brand stickiness, and the strategy of enterprise development is to continuously dig some functional labels and deepen the brand image. The most typical functional clothing includes sports brands. Efficiency brands mainly emphasize fashion, quick reaction, etc., and use e-commerce and other fast feedback channels to widely promote brands. Enterprises generally have strong organizational efficiency and executive power. Cultural attributes also strengthen brand recognition: The track of sports shoes and clothing has a strong sense of cultural identity, and each brand represents a spirit behind it. The recognition of spiritual culture is more about brand loyalty. Under the attribute of cultural identity+functionality, the concentration of the sports shoes and clothing industry is constantly improving, and the leading companies are "the stronger the stronger". Compared with ordinary casual shoes and clothing, functional shoes and clothing have higher brand loyalty, high proportion of re purchase, and the industry concentration has the logic of long-term improvement, which is easy to create big brands. From 2011 to 2020, the concentration of China's sports shoes and clothing market continued to increase. CR5/CR10 increased from 48%/68% in 2011 to 59%/78% in 2020, the stronger the stronger. In 2020, Nike/Adidas accounted for 19.8%/17.2% of the market share of sports shoes and clothing respectively, followed by Anta's main brand, whose market share reached 9%, and another brand, FILA, has also reached 6.4%. In terms of market share, domestic products have begun to rise. From 2015 to 2017, most domestic sports brands lost market share due to their extensive expansion around 2010 and certain inventory problems accumulated, while overseas brands continued to expand their market share at this stage. However, since 2017, domestic sports brands have gone through a round of reshuffle, and gradually got out of the previous difficulties, and began to rebound in an all-round way, with market share rising. Anta's main brand quickly sorted out the inventory problem and gradually expanded its market leading position since 2013. Li Ning has rebounded from the bottom since 2018. FILA has maintained a strong growth momentum since it was acquired by Anta Group, and Tebu has also begun to stabilize and rebound since the bottom reached in 2017. Except that Nike continues to maintain rapid growth in Greater China, other overseas brands have no significant growth in revenue in China. One of the reasons for the rise of Guochao: cultural self-confidence, cognitive changes in the "Z era", and the initiative to embrace domestic brands The growth environment of "Generation Z" makes them feel the strength of the country. The "Generation Z" people will not feel the gap between domestic economy and culture and that of developed countries in the environment they live in. Their basic material and spiritual life needs can be met at home, and they can personally feel that China is better than foreign countries. It began to find that although traditional culture is only a fragmented thing when it is spread in some modern ways, it has been accumulated in the growth process of more than 10 years, and will also have an impact on a person's cognitive system from quantitative change to qualitative change. "Generation Z" will realize that there is not such a big gap in the use and perception of products of domestic and foreign brands, The evaluation system for domestic brands is more objective.
The attention of Guochao is high, and the acceptance of domestic brands is improved. In 2019, the number of national treasure searches increased by 730% year on year, the number of fans increased by about 7.2 times, and the transaction volume increased by about 560%. The public's attention and consumption of Chinese elements increased significantly. The search popularity of Chinese brands has increased from 45% in 2016 to 75% in 2021, and domestic brands have attracted wide attention. In 2020, 66% of consumers prefer to consume local brands. Compared with the increase of 5 pct in 2019, the acceptance of domestic brands by the Chinese public has reached a high level. The second reason for the rise of Guochao: the mature supply chain brings about the improvement of comprehensive product quality Supply chain is essentially a modern division of labor. As Adam Smith described the division of labor in The Wealth of Nations, a pin factory, by disassembling the production process, each person is responsible for one or several links, which reduces the learning cost and the conversion cost of different links (including the conversion of location and process), and because each person only does a few of these links, their proficiency can be improved faster, Thus, the production capacity is further improved. The same is true for modern supply chains. Just provide an idea, and theoretically all processes can be outsourced: At present, the division of labor in various links in China is very mature. Taking clothing as an example, in theory, you only need one idea to complete the production and sales of a quarter, and all the remaining links can be outsourced. You just need to string these links together. Independent studios can be found for design, and platforms for interfacing with upstream raw material suppliers are available for procurement. One click search can start negotiations. Production can directly contact the large and small factories of various industrial clusters in China to place orders. After production packaging, it can be directly sent to the wholesaler through logistics. There is no need to worry about the retail side in the future.
Some regions in China have formed labeled high-quality industrial chain clusters The high-quality industrial chain cluster has a siphon effect on the supply of equipment, raw materials and labor population. The future characteristic labeling and efficiency advantages will only become more and more obvious. For example, Cao County contracted 90% of the coffins in Japan. Excellent designer resources have also developed : 1) Most of them have overseas education or work experience in international brands, which can add more diversified elements and thinking to their own brands. 2) The design works present distinctive personal design style, such as bold and hot, elegant and minimalist, street trend and futurism, which can fully meet the aesthetic needs of all kinds of consumers. 3) The revival of Chinese traditional culture and the promotion of local design brand recognition have provided a large amount of materials and solid backing for the creation of Chinese designers. Therefore, domestic products have the strength to change the previous "ugly soil" image and design more fashionable and attractive products. Therefore, in terms of the current development level of the domestic supply chain, it has the ability to efficiently produce products with certain design standards and quality assurance. It is far from the image that has been designed for more than ten years and the quality cannot be guaranteed. While the overall level has improved significantly, the top domestic brands, especially functional brands, have more outstanding supply chain capabilities when pursuing differentiated categories. Many functional brands are started by OEMs, with leading layout in the supply chain to ensure product functional differentiation : Most of the functional brands in China started as OEMs and basically achieved the integration of upstream and downstream industrial chains: 1) R&D : Build its own R&D center, attach importance to R&D investment, and maintain a certain proportion of R&D investment every year. 2) Supplier : The material supplier cooperates with the world's leading enterprises. For example, Tebu has established the first running exclusive research center in China. Its R&D team includes more than 40 international experts and experienced engineers. It actively seeks cooperation with 3M, Dow Chemical, Nvidia and other international leading fiber material developers to maintain the leading technology in the materials of all parts of running shoes. 3) Production : Some products are produced by ourselves, and have a stronger ability of quick reaction in order adjustment and replenishment. 4) Logistics : Self built logistics center, integrating the existing logistics management system and warehousing system. 5) Terminal network : Unify the decoration and display standards, unify the brand image, digitize the retail system, and strengthen the transmission and feedback efficiency of terminal sales data. Efficient integrated supply chain also enables products to maintain functional differentiation.
The third reason for the rise of the national trend: in the context of e-commerce, domestic brands are well versed in marketing and can reach consumers more effectively Chinese brands are familiar with the psychology of domestic consumers and the development of e-commerce. In 2021, the number of WeChat users will exceed 900 million, the number of dithering DAUs will exceed 600 million, and the number of Xiaohongshu users will exceed 300 million. With the rise of e-commerce, social media, live broadcast and other platforms, more and more people are active in WeChat, Weibo, Little Red Book and other platforms. The platform continues to accumulate users, and the way products effectively reach consumers is also changing, which also puts forward higher requirements for the brand's responsiveness. In the face of emerging marketing methods, compared with overseas brands, domestic brands are more familiar with the psychology of local consumers and the logic of e-commerce growth, and can adjust their strategies in a timely manner. Foreign brands can enjoy e-commerce flow dividends first and seize development opportunities. The event of "Xinjiang cotton" catalyzes the return of domestic products as a long-term development trend in the future The trend of "national tide" is becoming more and more popular, and the "Xinjiang cotton" incident has brought new explosive points to the rise of domestic brands. With the change of international relations and the response to the epidemic in 2020, the national cohesion and sense of identity of citizens have been further strengthened. In the "Xinjiang cotton" incident, the unreasonable boycott of foreign brands further stimulated the patriotic feelings of the people, and the overall attention of Chinese clothing brands increased significantly. From the e-commerce data tracked, since March 2021, both Li Ning and Anta have shown rapid growth and overall improvement in their industry status, whether in terms of year-on-year growth or sales ranking of sports/leisure apparel e-commerce sales. 1) From the perspective of official flagship store sales, the year-on-year growth of Anta's official flagship store sales was more than 50% in March/April/June; 2) In terms of sports/leisure apparel ranking, before the time of Xinjiang, Adidas was the first brand among sports/leisure apparel brands, and Nike and FILA were the second. After the "Xinjiang cotton" incident in March, Li Ning and Anta's position in the industry has risen significantly, ranking first and second in sports/leisure clothing. Nike Adidas dropped significantly to the 4th and 5th position. 03、 Logic 3: The improvement of store efficiency is the main growth driver of functional brands. There is a secondary market for head sports brands, which has the logic of price increase
Future store efficiency improvement is the main growth driver of functional brands At present, all brands have passed the stage of promoting revenue through stores and entered the development stage of relying on store efficiency. In the future, brands will continue to optimize their product portfolio through R&D+design+marketing. By upgrading the display of terminal stores, they will enter shopping malls, open large stores and close small stores, and continuously improve the customer experience and sales ability of terminal stores. The improvement of store efficiency in the future is the main driving factor for offline growth of major brands. The main functional brand stores have remained stable, and each of them has the trend of strengthening terminal control and refined operation. There is a secondary market for head sports brands, which has the logic of price increase Li Ning's running shoes, basketball shoes and fashion shoes all have high consumer awareness: There are 21 shoes with more than 1000 payers and more than 1700 yuan from Li Ning, the platform. We found that these shoes with a high premium in the secondary market have the following characteristics: ① The categories are mainly concentrated in basketball shoes, running shoes and fashionable shoes: 1) basketball shoes: Yu Shuai series (8 models) and Wade series (6 models); 2) Running shoes: Li Ning Jueying series (4 models); 3) 3 fashionable shoes. ② High premium: The highest price of shoes in the second-hand market is Li Ning's Jueying series running shoes. The second-hand transaction price reached 4099 yuan, up 141% from the original unified selling price of 1699 yuan. Anta's KT series already has a high market awareness: There are 8 shoes with more than 1000 payers on Anta platform. We find that these shoes with high premium in the secondary market have the following characteristics: all are basketball shoes, and all are KT series endorsed by Clay Thompson; The highest second-hand price is KT5 Compendium of Materia Medica Special Edition. At present, KT has reached the sixth generation. KT5 Compendium of Materia Medica is 108% higher than KT6's official website uniform price of 869 yuan. Inventory: the inventory and turnover of functional brand terminals have improved significantly Improvement of sports brand terminal inventory turnover: From 2011 to 2015, the sports brand industry has faced serious inventory problems. Since 2015, all companies have strengthened channel sorting, optimized the dealer structure, and strengthened the monitoring ability of terminal inventory. From the report level, the inventory turnover efficiency has improved significantly. The average inventory turnover days of Anta in 2020 increased by 35 days mainly because the company recovered some inventory after DTC transformation. From the perspective of channel inventory, excluding the impact of the epidemic, the turnover efficiency of channel inventory of major companies has significantly improved in recent years , specifically: Anta Group : 1) Anta's main brand: in 2021, the ratio of inventory to sales in Q1 and Q2 will be 5. Last year, the ratio of inventory to sales was greater than 7 when the epidemic had the greatest impact. Under normal circumstances, the ratio of inventory to sales in Anta is about 4-5. 2) FILA: In Q1 and Q2, the inventory sales ratio was 6. Last year, when the epidemic had the greatest impact, the inventory sales ratio was more than 8. Under normal circumstances, the inventory sales ratio of the company was 5-6. On the whole, Anta's big goods and FILA have basically recovered to the pre epidemic level. Li Ning : The efficiency of inventory turnover has improved significantly since 2012. By the end of 2020, the overall inventory turnover time of Li Ning was 4.2 months, and that of stores was 3.7 months. Tebu International : 2015-2018 is the three-year channel reform period of the company. By 2018 and 2019, the turnover time of the company's terminal inventory has significantly improved. By Q2 2021, the company's terminal sales have basically recovered to the pre epidemic level. The terminal discount also recovered to 7.5-8% before the epidemic.
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