Apparel / Textiles & Accessories

The 2020 epidemic has severely hit the apparel industry. Although the epidemic has been brought under control, the sporadic emergence still prevents the market from functioning normally. The outbreak of the epidemic in Guangdong last month has made local clothing companies even worse.

The clothing industry is one of my country's traditional pillar industries and plays an important role in the national economy. However, in recent years, in the complex international environment, faced with domestic structural adjustments, consumption upgrades, changes in demand and other factors, the apparel industry has also faced tremendous pressure for transformation, and the growth rate of the industry has been declining. According to statistics from the National Bureau of Statistics, the operating income and total profits of the textile and apparel and apparel industries began to decline in 2019, down 3.4% and 9.8% year-on-year respectively. In 2020, the situation will become more severe under the influence of the epidemic, with operating income of 1,369.73 billion yuan, a year-on-year decrease of 11.3%; total profits of 64.04 billion yuan, a year-on-year decrease of 21.3%.

It can be said that the apparel industry is facing unprecedented challenges.

In response to the impact of the epidemic on the development of China's clothing industry and the new changes in China's clothing supply chain after the epidemic, the "Logistics Technology and Application" Live Room" was discussed in the latest issue of "Big Coffee Online" . During the live broadcast, Wu Qingye, Executive Vice President of Winner Fashion Holdings Co., Ltd., Liu Xinwei, General Manager of Tompkins China, and Wang Yong, Deputy General Manager of Supply Chain of Shanghai Shachi Clothing Co., Ltd. shared their thoughts and insights in their respective fields.

Impacts and challenges brought by the epidemic

The first is a huge impact on front-end sales platforms/channels, especially for apparel brands that mainly sell offline stores. In terms of positioning as a winner of mid-to-high-end women's clothing, it has 1,500 stores across the country, of which more than 80% are directly-operated stores, which is a typical representative of highly self-operated clothing brands mainly based on offline channels.

Under the impact of the epidemic, due to business suspensions, store closures and other reasons, since the end of January 2020, Winner Fashion’s offline stores have been closed for about one and a half months. The rapid decline in offline sales has further affected the company’s Operation management, how to ensure employee income, how to stabilize the relationship with suppliers and franchisees, etc., are a series of challenges that follow.

It can be said that the epidemic is a great test of the comprehensive capabilities of apparel companies.

Secondly, it is a test of back-end logistics and supply chain capabilities. Can you achieve rapid response and support?

After years of development, my country's garment industry has become a major country in the world's garment industry, with a complete textile and garment industry chain. Due to the stabilization of the epidemic situation in my country and the continued spread of the epidemic situation abroad, China has become an important supply market for foreign brands, and the problem of insufficient supply of domestic factory capacity has been highlighted; at the same time, domestic fabric manufacturers and various raw material suppliers have seen soaring orders in foreign markets. , The supply of raw materials began to fall short of demand.

On the other hand, for clothing brands that need to rely on imported high-end fabrics, the supply chain is facing great challenges and it is very difficult to control. Taking the high-end business men's clothing company as an example, according to reports, most of the clothing fabrics of the company are imported from Italy, Japan, South Korea and other places, and the purchase cycle is originally relatively long (from ordering of raw materials to stocking, transportation, customs declaration, and then to factory production. , It takes about 5 months), the epidemic has led to unstable global apparel fabric production capacity, difficult to deliver on time, and the instability of the supply chain has further increased.

Seek opportunities under challenge and seek development in adversity

"Every crisis is an opportunity to change the market structure. A crisis is always a fighter for ambitious people. Ambitious entrepreneurs are'stepping on the accelerator,' not'stepping on the brakes.' The worse the market, The better the opportunity to achieve'overtaking on a curve'; the more the turning point, the greater the chance of'win'." Facing the challenge, Wang Yong said.

Under the impact of the epidemic, the industry reshuffle has accelerated, and many brands have left the market sadly, but Shachi and Winner Fashion have both achieved contrarian growth. How did they do it?

Actively "open source" seeking online development

After the offline store business suffered setbacks, it has become an inevitable choice for many apparel brands to expand online markets and increase online sales.

For example, in January 2020, Winner Fashion officially launched the "EEKA Fashion Mall" mini program, which connects members of all its brands, and users can purchase all products of all brands of the company in the EEKA Fashion Mall through a unified membership system. As of the end of 2020, the cumulative number of registered members of EEKA Fashion Mall was 2.26 million, a year-on-year increase of approximately 16%. In addition to opening up members, EEKA Fashion Mall can also help brand marketing and online and offline inventory management, the same model and the same price are simultaneously updated, comprehensively promote the integration between online and offline channels, and empower offline.

Reasonable "throttling" to optimize logistics and supply chain

In addition to developing online channels, how to reduce costs is also a key response method for companies. Logistics and supply chain costs are often the first targets. However, one cannot blindly pursue cost savings and reduce consumer experience, because service efficiency and quality directly affect customers' trust and recognition of the brand. Winner's fashion approach is to rationally combine and change logistics service providers, and adjust them according to specific business types. For example, for store-to-store allocation, partners are selected on the principle of better cost; for businesses that directly contact customers, they are selected on the basis of service quality and customer experience.

Digital transformation

Digitization has been an important development direction of the entire industry, and it is the core driving force for enterprises to respond to challenges and achieve high-quality development. How to build a company's digital capabilities is also a question that companies are constantly thinking about. Generally speaking, the construction of digital capabilities needs to include comprehensive digitization from the customer demand side to the management side and the supply chain side, which involves the upgrading of informatization, the introduction of automation equipment, etc., through digitalization, informatization, intelligentization and other technologies. Improve operational efficiency.

Build a flexible supply chain

Due to the strong seasonality and short-term fashion cycle characteristics of clothing, the rapid response capability of the supply chain itself is very high. Coupled with the impact of the epidemic, how companies can build a flexible supply chain that can respond quickly is crucial.

Liu Xinwei said that under the impact of the epidemic, domestic apparel companies have begun to realize the importance of flexible supply chains and have raised them to a very high dimension. This is an obvious change that the epidemic has brought to the industry.

He further pointed out that change usually includes two aspects: one is to change, and the other is to be able to change.

Want to change: the driving force. The epidemic is causing many clothing brands to actively think about changes and realize the importance and urgency of supply chain changes, rather than passive changes based on technological upgrades or development pressures from friends. When the senior executives of the enterprise have the consciousness of supply chain reform, and consider all related links and elements of the supply chain from top to bottom, and involve various departments, front-end production and back-end sales, logistics and distribution, and IT, etc., it can be formed The biggest driving force.

Can change: that is, ability. Through the epidemic, clothing brands have "excavated" their abilities to the extreme, fully understand their bottlenecks, and see their "ceilings." Therefore, on the one hand, we need to improve all aspects of the company’s capabilities internally, such as the effective management of the IT operations team (many companies’ processes limit the use of their IT capabilities); on the other hand, they should seek external forces, such as seeking professional consulting and industry reference And so on, through professional pulse, diagnose which links need immediate "treatment" and which links can be "long-term adjusted".

Embrace the change and usher in a breakthrough

Through the sharing of the three guests, we have seen the impact and impact of the epidemic on the apparel industry, and how the industry's representative companies are facing challenges, looking for opportunities, and achieving growth against the trend. With the joint efforts of the industry, we are delighted to see from the data of the National Bureau of Statistics that the industry is ushering in growth. Statistics show that from January to May of 2021, the operating income of the textile and apparel and apparel industries was 525.06 billion yuan, a year-on-year increase of 13.3%; the total profit was 23.46 billion yuan, a year-on-year increase of 27.9%.

"Opportunities and challenges" coexist. Generally speaking, apparel companies need to put a lot of effort in management, think multi-dimensionally, embrace changes with a positive attitude, and be brave to explore and try. Wu Qingye emphasized.

In addition to the impact of the epidemic, the apparel industry is facing the impact of the epidemic. In the new retail environment, in the context of diversified consumption, how to seek integrated, efficient and win-win cooperation with upstream and downstream partners in the supply chain will also be an important development direction for apparel brand companies in the future. .

In addition, how to transform and optimize the logistics system around the three aspects of cost, efficiency and experience has always been the focus of clothing brand enterprises.