The Survival Status of Chinese Designer Brands (Environment, Cases, Merchandise Planning, Etc.)

Introduction

With the rise of China’s national wealth and the increasing strength of Chinese designers, Chinese designers have gradually occupied a place in the international community. This time, I’m going to share with you what I’ve seen about Chinese designers and how merchandise planning can help brands.

  • Topic – How merchandise planning works in designer brand
  • Moderator –Li Hao – Independent Brand Manager – Build from 0 to 1 a branded goods system, responsible for coordinating with 12 countries and regions, 35 top buyers, and boutique department stores during Paris Fashion Week order sales and customer communication. He left PHAEDO at the end of 2019 and is currently working on his clothing brand.
  • Yanni – BEIJING – Buyer – Clothing design and management major graduate students, an undergraduate in English major, has passed level 4 and level 8 English certificate, and business English certificate and other qualifications. During school time, participated in the National Costume Translation Program, worked as a sales assistant for BLACKMARKET-WHITEHOUSE, a women’s clothing product in Atlantic City, New Jersey, USA, and received a letter of recommendation from the General Manager. Worked as a buyer intern for the J.LINDBERG brand of BESTSELLER Group.

Changes In the Clothing Market Environment

1. The Development of The International Garment Industry

Because I have always been working for a designer brand, so my views are more from the brand. I will talk a little bit about the industry, but it is brand oriented.

You can look at this diagram, this is when we were doing The PHEDO brand in the early days, to explain to investors the value of our brand. I have removed some information about specific brands, and the contents I’ve kept can be used for illustration. I sent this picture is mainly to express the context of the development of clothing abroad, and to explain why the entire foreign clothing system formed the current situation.

Audience Queeni Wang:

As long as there is conflict, will there be influential clothing brands born?

Moderator

It is fair to say that my understanding is that it is possible to produce representative clothing brands when there is a strong conflict with the times. Those with an era background, catching people’s eye with some memorable points and influential people or brands can survive to become super brands. We think this is an extremely complex, lively, and information-overloaded Internet era.

Audience Queeni Wang:

I feel like the era of the fad of the country, the era of Chinese power.

Moderator:

You could say so. My girlfriend and I later left PHAEDO, in fact, also made some summary of this. In a way, PHAEDO fits the Chinese element and reaps the dividends of China’s overall national strength and rising national self-confidence.

Audience Mr.Lu:

What internet elements are used in your brand building?

Moderator:

One is to follow the times and use Internet tools well; the other is to be extremely far away, but because you’re so far away, it’s something that some people want to know, and of course, it’s based on what you’re doing well. PHAEDO chose the path of conflict with the times, that is, away from the Internet, but be yourself, and then spread by those affected.

Audience Mr.Lu:

Is this style original by Chinese designers? Or follow a genre abroad?

Moderator:

It’s original by Chinese designers because if you want to stand in Paris, you can’t go on without your characteristics. For example, there was a company in Shenzhen, when to talk to the showroom, the other side directly said, “you and some brand is very similar, why should I do your brand?” “Because one of the London designers the company invested in was that style.

Audience Chinn:

But the same with plant dyeing, tea dyeing cloth using Chinese elements of the brand PengTai and UMA WANG have. Why do you say it’s original? What is your ingenuity?

Moderator:

For example, PHAEDO is good at persimmon dyeing this process, it can be said that the domestic imitation of this style can not duplicate the effect of PHAEDO. That is because the brand has been exploring the persimmon dyeing piece for a long time, when people saw PHAEDO, they said they had found something new. And it’s in Paris, a market with a laser-sharp eye for fashion.

Audiencechinn:

PHAEDO’s clothes also feel as thin as wings.

2. Europe and the United States market at present the overall status quo

After PHAEDO I jump back to my subject. Europe and the United States in the development of this clothing can be said to be no-fault, they are customized by ancient homemade and tailors, and then go through the era of haute couture, and finally towards ready-to-wear. In the process, they built a pyramidal structure.

Audience Yanni:

Recently happened to be watching “Fashion Smoke Cloud”, about how Paris Haute Couture appeared. At that time, just after the end of World War II, American Apparel developed rapidly, Paris wanted to maintain its status as the original fashion capital, the Paris government to work with designers to produce some new ideas. That is when street photography started booming and there was a catwalk.

Moderator:

And because Europe worships genius, the most iconic figure at the beginning of the Haute Couture era is Paul Poiret. From the beginning of his time as a designer like a star and continue to modern. From the brand and how the rise of designers, the entire European and American clothing system is a pyramid system. We always say that Europe has a lot of unique, fashion-leading buyers, in fact, these in my understanding, are the bottom of this pyramid system, like the foundation. So why doesn’t Europe regularly have designers called names come out, and it has something to do with this foundation.

This is the nature of our roadside street shops, just because Europe is richer and socially stratified. Then there is a group of discerning people, specializing in things like designer brands. And it was a good business at the time, and society’s understanding of the garment industry was not the same as China’s. Europe and the United States will often be clothing designers to artists, representing the symbols of social culture.

Audience Queeni Wang:

When can China start respecting artists like this?

Moderator:

At present, I think there is already this trend. But because China is too big, the overall consciousness is difficult to improve all at once or needs social development to become more prosperous.

Audiencechinn:

There are already a small number of designers moving in this direction, but the premise is that the brands need to survive, have profit, to raise the artistic level. Designer brands are still more dependent on fashion buyers, and fashion buyers are dependent on customers. Buyers tend to choose brands with good sales, so designer brands want to go high-end, art is difficult to survive. Many brands that start as high-starting brands are because they are rich in themselves.

Moderator:

A scale-like PHAEDO’s has to do with the initial brand’s well-funded investors, and it can’t be profitable at all until 2019.

Audience Alice:

It is difficult to improve overall awareness in the short term, but I believe it will get better and better.

Audience Yanni:

Peace Bird, for example, has given some designer brand platforms, so that the mass ready-to-wear market will slowly accept the aesthetic of these designers.

Moderator:

I go back to my theme, and these buyers correspond to the brands of various clothing designers. Because European and American societies are what we’re going through in China right now, and they’ve been through it. Their social volume is quite serious, but Europe and the United States are more lying flat young people. I’ve discussed with friends how many brands came to Paris during Paris Fashion Week. Brands that do not have a certain level or local advantage are equally difficult to produce in Europe and the United States. If the buyer shop and designer brand as the foundation, then the next level is some of the development is relatively smooth brands, can also be understood as brand companies. These brand companies can be said to stand out in the European and American environment competition, and in the capital, management, talent is dominant.

Audience Yanni:

Is there a lot of involutions in society and lying down on young people? All kinds of fashion history listed only a few classics, change the course of the history of designers a lot of real clothing brand status is not much involved.

Moderator:

The inner volume requires you to have a high level of professionalism to stand out from the crowd. Because people all over the world who demand clothes have gone to Paris, and people with their ambitions have gone to Paris. Do you know how many luxuries in the world were bought by the Japanese when Yamamoto and Yukio Kawamoto appeared in Japan? I remember I should have looked at about half of the data. And now China is similar.

Audience chinn:

Yes, so Japan’s ventage market is now good and a legacy of buying a lot of luxury goods.

Audience Yanni:

During the middle east oil boom of the 1960s and 1970s, Indians bought more luxury goods.

Moderator:

But neither the Middle East nor India had famous design gurus, perhaps because they were only partially rich, but Japan has a large rich population. And no one inside has interpreted their culture to the world, affecting the rest of the world. Therefore, it is still necessary for the whole people to be rich, to raise their consciousness, and finally, the nation is confident to better recognize themselves and interpret themselves.

Audience Yanni:

So, what is the overall picture of Europe?

Moderator:

At the top, there are boutique department stores and luxury groups. The overall situation is not good at the moment those Italian brands are close to collapse. Then good brands before the outbreak were bought by luxury groups like LVMH, so the whole of Europe is actually in very bad shape. European brands are not the same as China, where there may be dozens of stores where brands are small. But many European brands have been growing for decades and may only have single-digit stores. So, they’re bad at the cash flow.

Audience Yanni:

This is not a kind of their culture, that kind of family small workshop-style, inherited form of the spread of the brand.

Moderator:

Not only because of this but because it does have something to do with their culture, most of Europe’s management capabilities are poor except for big companies and luxury groups.

3. The Development Of The Domestic Garment Industry

Speaking of domestic, China’s clothing from the brand point of view, the development is directly from the brand and is a large-scale joining the direct start, from the beginning is very large-scale. We found that in the past ten years, the number of shop assistants gradually increased, in some ways is to make up lessons, building the foundation.

Audience Yanni:

Previously, school teachers have shared our domestic clothing from the 1980s.

Moderator:

After the reform and development, most of them are made for processing, wholesale, and so on.

 (2) The current overall structure

Audience Yanni:

Is it important to be aware of and focus on brand culture and values at home?

Moderator:

No, because the brand has developed to a certain stage where people do not know how to go, and then people start exploring new businesses. And many people studying abroad has returned, and these people have brought a lot of new things.

Audience Queeni Wang:

I feel part of the reason is that a group of designers studying abroad have returned home and started designer brands. People are not short of money, do their favorite tune, and then pull up the unit price. These brands do high value-added things and increase the premium space to the target of foreign luxury goods. There are domestic rich people, like to buy luxury goods, now not convenient to go abroad to buy, but the consumption power is still there, so we need some new niche brands to make up.

Moderator:

Yes, most people who buy a shop in the first half don’t make money. Many of these people are rich second generation, for the buyer shop in the final analysis as a business, there is no good understanding, many are interest-oriented. But there are a lot of people coming into the shop, and there are still a lot of people doing very well, and it’s an evolutionary process. But I don’t recommend starting as a brand, either you have money, resources, and relationships, or backgrounds.

Audience Alice:

Many brands starting with the mass-market brand did not go on well after they started independent brands. There may also be many factors, there is a long way to go.

Audience chinn:

There is some brand starting with 2 and more people in partnership, one person responsible for the design, one person responsible for the market, both bringing with resources.

Audience Queeni Wang:

Vision, marketing is very important.

Moderator:

Big companies have problems with the way they operate, niches have niches problems, but many people start a niche design brand directly following their existing system. And they don’t understand what they’re doing with a new brand.

Audience Queeni Wang:

How do you do this? How exactly?

Moderator:

I think it’s mainly for the purpose. A big company starting with a brand has a strong business purpose. Or they think not, but finance and their development plans will tell them what to do with their new brand. These are all commercial brand routes. And niche brands first and foremost to establish their design language system. Domestic is currently a complimentary foundation process, so now there are many domestic brands out, and independent designers are relatively better than the previous road, but still very difficult. Because it takes a lot of effort and time for the niche to be understood by the public.

Audience Yanni:

Sales are above design, and it’s impossible to be creative.

Audience Alice:

think it is time to slowly turn a part of the “mass” into a “minority” crowd.

DESIGNER BRAND CASE

1UMA WANG

 (1) The key node of UMA WANG development

Moderator:

Let me start with what I think of her, UMAWANG, a group of designers who are much like the Chinese designers who set foot on the international stage. A bit like the first Japanese designers to dabble in international, Kenzo Takata, was the first to open the way to the international market. Why the study of UMAWANG at that time, is because PHDUEO in the brand height of positioning and she is consistent, so in the early stages of development to do a lot of research on her.

Audience Alice:

There is a lot of homework behind a brand’s success.

Audience chinn:

I had seen Uma speak at a table before, and she moved her production to a small town in Italy, where people were all dressed in black because of a brand in town.

Moderator:

That is the story, actually because it’s cheaper, and the quality is guaranteed, and there’s delivery date. International spring and summer basic delivery time everyone agreed to be January-March, and then spring and summer Paris Fashion Week is the end of September and the beginning of October. It takes a long time for a buyer to give an order, and it’s not until mid-November that the order is fully closed. If you want to deliver in January, your production cycle is particularly short, international logistics a week is at least. And now we have a characteristic, is to put the delivery time non-stop to the premise. For example, the end of May and the beginning of June in China has already begun to wear autumn clothes.

Speaking back to UMA WANG, in 2015 UMA WANG said that she has 10,000 pieces of production in a quarter if according to the PHAJEO repayment situation analogy, her quarterly return is about 30-40 million yuan, the overall size of a year is about 60-80 million yuan. But I’m not sure how her earnings are they don’t make much money in Europe, the average unit price is about 8000-9000 yuan, but it may not have a high unit price of PHAEDO.

Audience chinn:

How convenient are PHAEDO’s starting order and discount?

Moderator:

10,000 euros, it’s not convenient to say. But I can tell you that the pricing advice given to us by Showroom in Paris is 2.6 times the cost of the showroom commission, which is the buyer’s price. But PHAEDO did not follow this standard. PHAEDO’s bosses come out of big companies, which are not light in structure, are particularly expensive, and love to do projects that don’t make money.

Audience Yanni:

What about the buyer’s purchase price, which is generally several times that of this base?

Moderator:

2.6-3.2 times.

Audience Mr.Lu:

According to this proposal, the average cost of a single piece of UMA WANG is 1000 yuan.

Moderator:

People don’t necessarily set the price according to this standard. I once counted a skirt from UMA WANG, the fabric because OF PHADEO also bought, the fabric is about 200 meters. Then a skirt is estimated to be about 3 meters, and then add the workmanship of about 1000 yuan there is. But according to my concept, such a cost her skirt should not sell for more than 6000 yuan. But UMAWANG has a particularly good relationship with her fabric maker, which may give a different price and a very poor price.

Audience chinn:

Now the retail price of independent designer brands in China is generally 6-10 times the cost.

2SHUSHU TONG

 (1) The basic background of the brand

SHUSHUTONG was founded by LEI LISHU and JIANG YUXUAN. Her showroom abroad is NOSEASONhowroom. They’ve won some awards in the early days, which has helped them get off to a good start. And at that time, the domestic buyer’s shop is the rapid development of the time, so it has promoted the development.

Audience chinn:

Domestic well-known buyers LeiHu has to help them do online shop operations.

Moderator:

It should be said that LeiHu has their shares, so will have great help to them in this regard, there is no close interest will not do so.

 (2) Current developments

In the season after the outbreak ended, 2021SS, they placed orders at about $40 million. This is what a friend told me, basically double the number before the outbreak.

3QIUSHU TING

(1) The basic background of the brand 

She graduated from Anderwerp and was the best graduate of the year.

It was her first season of clothes, and it was recognized from this season, that was brought to market. My friend had a collection of her show clothes, and I tried them on. Her clothes are characterized by various patterned embroidery and high saturation colors. But one problem is that she doesn’t sell very well. She asked our team members for advice and answered that the existing style was too strong, but that was not a weakness. A new brand should be like this, but she doesn’t have a commercial balance. Her dress design language is so strong that she just needs to take some elements out of her design language and make some basic pieces with her brand identity.

Audience Yanni:

So, this time you need to plan for goods.

Audience Queeni Wang:

Do you need 20% of the window to be labeled? 80% is the market popularity of ground gas to do a good balance?

Moderator:

This is late, if it is a designer brand, at first its personality label I suggest is more than 60%, strong and enthusiastic. Because there’s so much to see in this market, it’s hard to notice that your design language is too convergent. And this era everyone is a visual animal, later slowly do some commercial balance. Brand this piece I’ll simply say this.

Simple Merchandise planning

1. What is merchandise planning and why should I do merchandise planning?

The scope of merchandise planning is particularly broad, I understand it as product planning and merchandise planning, which is the combination of these two parts. To achieve the right time, the right place, with the right goods, control the right costs, sell at the right price, and put into production the right quantity, to obtain the right profit. And merchandise planning in different types of enterprises, the content of the reference also has differences, such as business-oriented companies, will be more in line with the concept of complete merchandise planning.

Audience Yanni:

What is the main work content of the designer brand’s merchandise planning? Designer brands may start creative and have low operating profits. What is the role of merchandise planning at this time?

Moderator:

They will plan the product structure based on historical data. In summing up the sales data of previous years combined, refer to the future popularity, do multi-dimensional planning. Here, designers are more of a tool. (Note: Business-oriented commodity planning)

Designers rarely take these into account when they are just starting, which can create a problem, and your design is cost-effective.

Audience chinn:

Do you think designer brands must focus on merchandise planning at the beginning?

Moderator:

It’s necessary, it depends on how you plan for goods. Just said that commercial brands are designers as tools, that designer brand is mainly designers, then merchandise planning in such a company is a supporting role.

2. How the Designer Brand’s Merchandise Planning Works

Audience Yanni:

How exactly does the auxiliary role work?

Moderator:

For example, designer brand merchandise planning will not be so complete at first, we will be based on the season, sales targets, planning your season of the number of goods in various categories. Then plan the price structure of different categories of goods, so that merchandise planning is only a small part of the work of commodity planning. Why do these two first, we are based on this, can start discussions with designers.

Audience Yanni:

Is it choosing from the designer styles to put into the market, and the only difference is there are more styles?

Moderator:

No. Two points are to tell the designer how many products to develop this season, and then the price structure of the goods, the designer should choose how much fabric. For example, dress category 1280-1880-2880-3680. How many products at each price, if we want to obtain reasonable profits, then it is clear to choose the fabrics for different product pricing, and your process will also have certain requirements. After these two parts, the next step is to discuss with the designer. What designers want to do is the relationship between each category. Such merchandise planning does not interfere too much with the designer’s design.

Audience chinn:

In this way, it seems that the requirements for merchandise planning staff are quite comprehensive.

Audience Yanni:

This coincides with the work of most commodity planning. Can Moderator highlight any obvious differences in product planning between designer brands and other brands? What is the specific aspect of dominance?

Moderator:

There is a dominant problem here. There are a lot of business-oriented brands, the goods will plan your dress with what fabric, how long, what the profile is like, designers are just an implementation tool. And the independent designer’s merchandise planning is to help the designer to organize the process.

Audience Yanni:

In this case, the designer himself has little room to play.

Moderator:

Because many designers have no concept when designing. MS.MIN, for example, doesn’t have many concepts about cost, and they don’t have a cap on increased costs.

Audience Sir Han:

Who is the focus of planning and designers if they collide?

Moderator:

Compromise with each other. Designer brands will still be mainly designers. First, you have to understand why the designer is doing this and what she thinks.

Audience Yanni:

Is the operator industry in the designer brand most of the time also a designer?

Audience Mr. Lu:

Designer brands are generally designers at the beginning of their design and planning responsibilities, right? Or have good investors, like Lei Hu or Tricolor, who not only give money but also advise on how to run it.

Moderator:

But the product planning for designer brands will not have such a strong collision. Because in the process of organizing, you are helping the designer to add the bonus. So, need to understand their ideas, if used wisely, these ideas will increase the interests of the brand.

Moderator’s Summary

First, Chinese designers in the international1. The development course of the international and domestic garment industry

Europe and the United States in the development of this clothing is no fault, they are customized by ancient homemade and tailoring, and then go through the era of a high order, and finally towards ready-to-wear. A pyramid system has been formed:

  • Foundation – the lowest-level buyer’s shop and designer brand (the foundation of the entire European fashion system)
  • Middle level – brand companies (well-known designer brands, with a certain scale of brand companies)
  • Top – Luxury goods, boutique buyer’s department stores (big capital)

2. Case

(1) UMA WANG: UMA WANG’s global production in the first quarter of 2015 was around 10,000 pieces, with an estimated annual return of 60-80 million.

(2) SHUSHU TONG: Lei Lishu and Jiang YuXuan two people set up, the foreign showroom is NOSEASONShowroom, the domestic development with the help of LeiHu, rapid development. 40 million in the first quarter of 2021SS.

(3) QIUSHU TING: The first season will be released in 2018. Clothes are characterized by various patterns of embroidery and high saturation colors. The 2021SS quarter has doubled in size.

Second, how to play a role in the designer brand

  1. What is merchandise planning and why should I do merchandise planning?

merchandise Planning: This can be understood as a combination of product planning and merchandise planning. Why do merchandise planning: to achieve the right time, the right place, with the right goods, the right costs, with the right price to sell, and put into the right quantity, to obtain the right profit.

2. How the designer brand’s merchandise planning works

Commercial brand merchandise planning will plan what fabric you use in your dress, how long, what the profile is like, designers are just a way to achieve it. Designer brand merchandise planning is to help designers to do the process of organizing.

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