Fujian Quanzhou Garment Enterprises staged a “price rise tragedy record”

Wu Xingqun, deputy chief of seven wolves: Although the men's wear market is still in a rising period in these two years, the situation is good, but it should not be overly optimistic. There are two main reasons: the prices of international big names such as H&M and ZARA are already similar to those of domestic men's wear. They will erode part of the market. Although consumer income is increasing, the purchasing power of clothing is still difficult to achieve in a short period of time. The rate of expansion, because consumers are gradually becoming more rational, and apparel consumption is not rigid demand, consumers will be more likely to choose products with good quality and high brand value when clothing prices are getting higher.

Therefore, for most companies that are not strong brands, there is no room for price increases. At least, this kind of increase in performance driven by price increases does not have continuity in the long run. And it does not have much practical significance, because the market share has not been correspondingly improved.

Mr. Zhang, a domestic first-line brand marketing director: The current industry price increase is very worrying. I think that such a price increase is more like a crime. Once you become addicted, you can't hold your car and the damage to your company will be fatal.

In fact, this price increase is not the first wave, but this year's range is particularly large, after two or three years, several first-line brands have quietly increased prices. For several consecutive years of price increases, consumer acceptance of domestic men's clothing prices is approaching the point. The growth in performance brought about by price increases is far less than the increase in performance brought about by the increase.

Core Tip: With the end of April, the most important fall/winter product ordering meeting for Quanzhou garment companies in one year has come to an end. From the book side, the transcripts for this quarter's orders are undoubtedly beautiful, and the majority of companies' orders have grown by leaps and bounds. However, there is hidden concern among them, because the rise in the amount of orders for many companies, not volume and price increases, their performance is only driven by product prices and promote.

The price increase will inevitably accelerate the industry's reshuffle. Therefore, the price increase of clothing is actually a record of sadness and joy. Because not all companies can “safely increase prices”, under the flourishing surface of today’s price hikes in the entire industry, we have seen SMEs “rising prices” at high risk, and also seeing franchisees raising prices. Love and hate.

Even for those companies that have already succeeded in raising prices, we have to worry about whether the increase in performance brought about by the price increases is continuous. The price increase should not be just an analgesic, just to cope with rising costs, but it should be a tonic to create better conditions for future jumps.

Passive or active industry-wide rising tide of prices In the context of the overall recovery of the apparel industry and the rising cost of manufacturing, brand clothing prices seem to be a little more reasonable.

At the beginning of the year, Zhou Shaoxiong, chairman of Seven Wolf, publicly stated that this year's garment industry will increase its price by more than 10%. In fact, this is only a very conservative position for listed companies. According to analysis from most industry insiders, the average increase in branded apparel this year is at least 20% or more. At least two insiders of first-line brand clothing reveal privately that the price of their brands has risen by more than 30%, and even some of them are just in the rise of the brand. The period of the brand up to 35%.

With the increase in product prices, this year's autumn and winter orders, many companies have achieved a lot, the amount of orders soared. The increase in the number of companies surveyed by the reporter was almost 30%. At the moment when this seemingly ushered in the heyday of the industry, we found that the increase in the amount of corporate orders was almost the rate of price increase of the products, which means that the total volume of actual orders did not increase much.

Although some companies with rising brands have reached the realm of volume and price increase, more companies are “passive price increases”, and some companies even take risks in order to benefit quickly from price increases.

"Following price increases by large companies, on the one hand, comes from cost pressures. On the other hand, it is general industrywide growth. If you don't rise, consumers still think that your brand is rather poor. You can't rise up!" The boss revealed this feeling. Although he also understands the high risks involved, he knows that once the dealer and the terminal do not buy it, whether it is to compromise the dealer or the terminal, it is an irreparable harm to the brand, but it still chooses to follow the overall trend of the industry. And price increases.

“Some enterprises are in a situation of rising up and taking advantage of the situation, so take the opportunity to fish out.” Hu Liping’s marketing manager Hu Jiuming pointed out that this state is even more dangerous, because the appeal of the brand to consumers is not enough to support this part of the premium, and finally suffers. The result can only be the company itself.

The fact that “agents do not buy” is a fact that Shishi has already emerged as a “rising enterprise”. H company is a menswear company that has been making wholesale for more than ten years. The business is very impressive and the annual credit has reached 340 million. However, in the current situation of high manufacturing costs, its wholesale profits have been squeezed again. For this reason, he initiated the idea of ​​realizing product value enhancement through the operation of a brand. So the owner of the company meticulously prepared a package of goods. These men's wears, which are positioned as "business casual," are rich in variety and far exceed the types of men's wear previously operated in the wholesale market. Correspondingly, he hopes that agents can open big stores. This is to increase the price of products more effectively and to obtain higher profits through price increases, not just to enhance the brand image of “innocence”.

However, after all, the boss is only representative of the willingness of the company's side. Such a plan reaches an agent and encounters a "cold field." Agents cannot accept sudden and sharp price increases, and they are even more unwilling to invest more to open stores to support this increase. Even if this price increase puts on the “outerwear” of brand transformation and upgrading. In the end, this became a paralysis event. Businesses end up with huge capital and inventory pressure.

The reason why agents do not want to follow the strategy of the company is because they see the high risks implied by this. In their view, the price increase is more of a bubble and contains more water.

“The “brand escalation” of companies like H is the main performance in the market is the price increase. Many brands increase their prices in this way. It is not a straightforward price increase for the original product line, but a “upgrade” price increase in disguise. "An agent familiar with brand operations has expressed concern that "brand owners have increased their prices, single product profits have risen sharply, but there has been no significant increase in the total market volume. On the contrary, consumers are likely to decrease because of rising prices." Is the middle of the risk of buying clothing worthy of our agents?"

In fact, this agent is such an account. Even though the high raw material costs and labor costs will bring about high manufacturing costs, it will not be enough to increase the retail price by 30%. Even with the expected increase in the CPI index, it is still not enough to rise so much. “In the apparel industry, there is a rule that the manufacturing cost will increase by 25 yuan, and by the end of the retail terminal, it will increase by 100 yuan, which is generally 4 times. That is to say, in addition to the 25 yuan that will be used to cope with the increase in manufacturing costs, 100 yuan will be deducted. Rents, rising management costs and inflation expectations, at least there are still 50 yuan, is a brand enterprise into the bag." Industry insider Mr. Lin revealed. It can be seen that more and more clothing brands are just rising.

The agents in the middle are more passive, and if they go up, they are happy to have a share of them; if they cannot go up, because their purchase discount is fixed, when the tag price increases, their purchase price is also corresponding. To improve, it means that they will lose more, and the capital chain will be more nervous. Therefore, agents will inevitably have their own concerns.

Reflected from the hesitation of the agents and the market, there have been industry insiders inferred that this round of price increases will promote the industry to accelerate the reshuffle. The flourishing surface masked the wave of industry reshuffle, and soon there will be more outcomes.

How to enter the "safety price increase"?

Overall, the price increase is still a good thing for apparel companies. However, we are worried whether the price increase is continuous. Price increases should allow companies to enter a virtuous circle, with more capital invested in brand operations rather than into a vicious circle, carrying a heavy burden. Therefore, how to increase prices and what to do after the increase in prices is what companies have to think about.

Among them, it is a relatively common practice to carry out price increases of different magnitudes depending on the target groups of different product series. For example, the wolf family has two product lines of urban fashion and casual fashion. They target urban white-collar workers and two consumer groups. In this round of price increases, the general manager of the company Shi Hairong stated that the price increase of urban fashion will be More than casual fashion, because white-collar workers in urban areas have higher incomes and are less sensitive to prices.

In addition to tactically targeted price hikes, direct channel-based companies can also increase prices more smoothly in the channel model.

JIM'S deputy general Xiao Bing admits that JIM'S can support this round of price increases. One of the reasons is that its direct shopping malls account for a large proportion. "The operation system of direct-operated shopping malls is more benign because it will not owed money, and the terminal image Better, can increase the brand's added value."

Although some of them can “safely” increase prices, the ability to use the benefits of price increases can further enhance the brand and consider the boss’s perspective. The above-mentioned first-line company's director Zhang said that the reason why his company can continue to increase prices in the two or three years before the onset of price increases, not only because the brand is in the brand up period, but also because each of their price increases corresponds to Certain brands are upgraded, the image of the terminal stores is improved, the style of products is changed, and so on. With continuous investment, we have today's prosperity.

Shi Hairong also believes that it is not a kind of "gambler" but a necessary "return."

Shi Hairong’s “feedback” includes improving quality and design to give back to consumers. It also includes supporting agents and distributors. “We invested a lot of manpower and material resources this year to improve the terminal operation capabilities of our agents and distributors. , Including goods, shelves to support the provincial generation flagship store. "Shi Hairong revealed that its advertising investment this year is even more.

In autumn and winter trade fairs, garment companies have raised their prices.