Low-cost clothing market business opportunities

With the advancement of urbanization and the expansion of middle-income groups, business opportunities in the mid-to-low-cost apparel market are gradually emerging.

China's domestic fast fashion brands such as Semir and Metersbonwe are in sharp competition with H&M, Uniqlo and ZARA. In fact, domestic fast fashion brands can only compete in the middle and lower reaches due to their own supply chain and brand influence. At the same time, they are subject to the pricing restrictions of H&M, Uniqlo, and ZARA, and prices cannot exceed international apparel brands. In addition, except for the domestic fast fashion brands that use the price increase method to increase revenue, they only compete by reducing costs. ZARA has 240 factories in China on standby, while domestic fast fashion brands lack bargaining power in factories and it is difficult to produce in season.

It is understood that the development model of domestic fast fashion brands is through large agents or distributors, in the form of orders at the beginning of the year for order production. The flexibility of design and the limitation of production flexibility have made it difficult for domestic fast fashion brands to achieve “fast” fashion.

Excluding the “fast” gene, the domestic fast fashion brand or the development route of Uniqlo, one of the concepts of Uniqlo is to make clothes that everyone can wear, and there is also a garment warehouse. The domestic fast fashion brands have a clear positioning for themselves, namely, fashion groups within 30 years old. The UNIQLO consumer group has a very long age span and truly enables consumers of all ages to wear it. This road is not good for domestic fast fashion brands.

Based on this, Senma, one of the domestic fast-fashion brands, has expanded its channels at this stage by making a “price acquisition”. Not long ago, Semirwear, which has been seeking to develop its mid-to-high end apparel brand business, has taken a substantial step forward. The company plans to acquire 71% of the controlling shareholding of Ningbo Zhongzhe M&S Holdings Co., Ltd. with its own capital of approximately RMB 2 billion. Its "GXG" and "gxg.Jeans" brands have related channels and customer bases. Undoubtedly, GXG has a good relationship with high-end shopping malls.

A valuable source shows that Wang Jianlin, chairman of Wanda, set up a brand library to prevent Wanda shopping malls from investing in the market. Wanda has to develop more than 85 percent of its brands from this brand library each time he develops a new store. According to the model of Wanda’s investment promotion, if brand owners want to enter Wanda, they need to enter Wanda’s brand library before they can enter Wanda.

When Senma enters this brand library, he needs to know the people of Wanda. GXG can help Senma to do this. In other words, the GXG has already made its way. Just ask Summa to introduce it.

For international fast fashion brands to enter the high-end shopping mall is much simpler, the international fast fashion brand itself is in this brand library, and it is a premium brand. Especially in the newly opened shopping malls, the largest and most outstanding store locations, high-quality products have priority. This means that when the domestic fast fashion brand Summa Curve was able to save the market, the international fast fashion brand Uniqlo has been able to go straight.

Sun Ruizhe, vice president of the China Textile Industry Association, once said that the division of labor among global textile and garment companies has become increasingly specialized. This trend further reduces the profit margin of China's domestic textile and garment companies, and only realizes from the manufacturers of products to buyers and service providers. In the transformation, one-stop service can grasp the mainstream of the supply chain and achieve greater profits. This also precisely points out a way out for domestic fast fashion brands.