How Should Designer Brands Make Their Own Marketing Plans?

Christine Tsui Fashion Community

How Should Designer Brands Make Their Own Marketing Plans?

Hanghang-Shanghai-Designer Brand Services, etc. @ Wechat: stillu000000

Graduated from Beijing Institute of Fashion in Fashion Design and Engineering. Now working for a designer brand management company, mainly working on online marketing and new media.

FOREWORD

The aim of a designer is usually to create his or her own brand. With the constant upgrading of the domestic market, more and more designers are eager to try and build their own brands. These brands are also covering a wider range of industries, instead of being limited to the clothing industry. Womenswear, menswear, footwear accessories, home& lifestyle, as well as furniture and cultural & creativity are all the most common fields for designer brands. Among them, “cultural and creative products” have become more popular this year. The cultural and creative products of designer brands are generally based on culture and creative ideas; they are the material form of human knowledge, wisdom and inspiration in specific industries. Culture and creativity are generally consumer products with high added value.

What Makes Designer Brands Different?

Compared with the features of commercial brand consumers, such as broad positioning, large volume, fast sales speed, and emphasis on marketing, designer brand pays more attention to the product itself. It values originality in products and has distinctive personalities. While the positioning is niche, the brand has a strong genetic, style and personality. Compared with the overwhelming advertisements of commercial brands, many designer brands spend less time on marketing; some brands even don’t bother to promote, relying solely on word of mouth from customers. This is because on the one hand, with a low budget, most designer brands do not plan their budget on marketing; On the other hand, if niche brands do not launch to their targeted audience, it does not make much sense to spend a lot of money on marketing. If you are marketing, you should find accurate marketing methods–only through this will you attract accurate groups and spend money in the most effective way possible.Rather than spending a lot of money on marketing, it is better to build brand stories and make products well with determination. Although commercial brands have large budgets and extensive marketing, the phenomenon of homogeneity in the market is also relatively severe, and the pressure of competition of products in the same category is also very heavy.

It is difficult to increase the scale of an individualized brand, and it is also difficult to highlight individuality for a brand with large scale. Just as large sales volume cannot coexist with distinct features, it is not easy to achieve both. For designer brands, their main task is to attracts certain groups with their distinct features, without which it would be more difficult to compete with big names. Based on this logic, is designer brand doomed to remain in small scale? This is also a bottleneck for the development of many brands–they are worried that brands that were originally special for its exclusivity will lose their initial consumer groups as a result of being widely accepted by the market. But in fact, one cannot make an omelet without breaking eggs.The brand is changing, and the customer positioning will continue to expand and improve. As long as the brand abides by its characteristics and products, and serve a certain group, it can be successful. This success is not based on a fixed customer base, but product features instead. Customers’ choices and needs are constantly changing. Consumers of designer brands may not necessarily buy all clothes from them. After all, they pay more attention to the clothing itself with purchasing, for example, some consumers like Maje, but they also buy clothes from JNBY and LILY. Instead of blindly chasing customers, make them chase the design and the brand—only in this way will your brand be attractive enough.

For designer brands, the word “success” is difficult to define. Generally speaking, it depends on the brand value. Brand value can be identified from five aspects: “loyalty, popularity, reputation, recognition, and brand association”. There are also different perspectives and standards within and outside the industry. For a layman, a designer is someone who makes clothes. They buy it if the clothes are pretty and the price is lovely. It is difficult and unlikely for the success of a brand to determine consumer’s desire to purchase. From the perspective of business, a designer brands is mostly successful if it is able to achieve profitability and let customers know and understand the brand, for example, let them see the store in large shopping malls, advertisements on we media, and celebrities promoting the products, etc. For the insiders, if you own a designer brand, it is the content of your design that determines whether you are successful and accepted by the industry.

After the rise of designer brands and a surge of their emergence, it seems that they have recently entered a bottleneck for development. While the customers are loyal, the small customer base is a problem that most designer brands currently face. This is because most of these brands lack mindset and systems for professional operation management. In the retail industry, the advantages of the supply chain are important, which is why some designer brands are expensive. Therefore, in order to extricate themselves from this predicament, some brands carry out product planning with the combination of data the market and operation & sales. However, as mentioned above, if the blind pursuit of market trends is not perfectly under control, it is prone to lose brand DNA in style and as a result, enter another dilemma, that is, homogeneity. This is why many immature designer brands experience multiple changes of brand style. Brand DNA is the fundamental advantage of brand development. How to retain the characteristics and break through the status quo? Or is there any other way to get rid of the current predicament and accelerate the development of the brand? Many designer brands have begun to take advantage of existing media channels to increase exposure through we media and find breakthroughs through KOL cooperation and promotion. For some brands with their own star traffic resources, they boost brand influence through other traffic entrances; meanwhile, the support and activities of e-commerce platforms can also be the promoter of designer brands; in addition, there are some elusive event factors that allow brands to reap unexpected results. But no matter how good or abundant these promotion methods are, without good products, it will only be quickly abandoned by the market.

How should designer brands make their own marketing plans? We can analyze from four aspects: product, price, channel and promotion.

Product

Each independent designer brand has its own preferences, so its products are generally bestowed with their own elements. However, for the brand, it is worthwhile considering whether these products and elements or the DNA of the brand itself are worthwhile for consumers to pay for. Designer brands tend to be more expensive than commercial brands– this is due to the development of the brand’s product line, the small number of upstream and downstream supply chains, or the impact of some special processes. If there is no advantage in price, then the product itself must have enough advantages to draw a highlight in terms of marketing.

Price

The price of designer brands is now criticized by many people. The price of an independent designer brand is even higher. Although to a large extent, it depends a lot on factors like the supply chain we mentioned above, consumers don’t understand it. Indeed, if the value is calculated based on the cost of mass production, designer brand’s nature of small quantity determines that its price will be high. The production quantity of designer brands is not comparable to that of popular brands. The key is to strike a balance, which is not only the balance of quality and price, but also that of consumer positioning and price. As a designer brand, its products must stand out and the brand needs to have a story, so that consumers are willing to buy. In this case, it is important to pinpoint user positioning and set the price based on it. If your users are located in third-tier cities, but you set the price based on the spending power of first-tier cities, you will lose the balance. Therefore, the price needs to match the income of the targeted customer base.

Channel

Currently, the channels that most designers and brands choose are usually online e-commerce platforms and offline buyer collection stores. There are also some brands that sell through self-operation. Brands should not be blind when choosing a buyer’s collection store, but instead, match with suitable styles and channels. In addition, channels can be expanded through more exhibitions, showrooms, and incubators, so as to cover a larger audience.

Promotion

Sometimes average consumers are reluctant to buy brands that they are unfamiliar with, not famous or even cannot be found, which is also the importance and significance of brand promotion.

Many designers do not know how to show their own advantages, or they are fine with expression but have limited sales capabilities. Therefore, many domestic designers, including brand companies, are trapped in the current sales model. In fact, the designer’s own operation is also critical. Works, stories, and exposure will contribute a positive impression to the brand. The attractiveness of the product line is also crucial. It is more effective to promote a good product after finding the brand’s highlights.

Appeals and Planning of A Designer Brand

What kind of designer brand would you want to establish? Many designers are determined to break the boat in the first step towards establishing a brand. Now the market is uncertain, and many brands, before succeeding, may worry what if they fail? Therefore, if you are to establish a designer brand, how to plan its development? For many brands, it is difficult to survive 2 years even with a deep brand story. Designer brands seem to be independent and free in style, but in reality, the requirements on the designers themselves are very high. As a designer, based on your own positioned preferences, you can diversify this circle and accumulate your business circles little by little, selling garments whose style do not easily clash with others. Learn about various platforms and activities and seize the boost of the Internet and e-commerce. Only the strongest among the strong can go further and truly make their own brand thrive.

In order to make up for the defect of their own abilities and balance the resources of various parties, many designers will seek business partners or new media for designer brands to cooperate. It is really good to join hands and share resources, but the prefix“co” is difficult to achieve. To achieve long-term cooperation, same values may be the basis. If they are different, try to respect each other, but a better relationship between partners lies in mutual awareness and complementary advantages. For a designer who focuses on design, the most important attribute of a partner is not the skills, but rather, being able to see “the invisible”.

In addition, incubators or collection platforms can also be a direction for designers to cooperate, such as ICY and LABELHOOD (leihu). The reason why two parties can cooperate is that the counterpart has the resources or highlights it needs. The platform needs new brands to bring new designs in order to drive new traffic; and on the other hand, designers choose the platform because of its financial and commercial operation capabilities, which are able to provide channels, develop new customer groups, so each party gets what it needs.

After all, as time goes by, brands that are not strong enough will be eliminated.  The long-term strategy for the development of a designer brand is to take the foothold of its style and products, balance design and price, take hold of marketing and promotion and pay attention to all aspects. Don’t just emphasize quality and price; rather, make consumers feel the product is good value for money. In this way, even brand premiums can make consumers pay with pleasure.

How Should Designers Build Their Own Fabric Library?

Christine Tsui Fashion Community

How Should Designers Build Their Own Fabric Library?

Caicai-Hangzhou-Fabric Supplier @ Wechat: caicai09111987

This article is based on Cai Cai’s lectures in the public welfare class of Christine Tsui Fashion Community

Course Outline

I. How to obtain and make full use of offline fabric channels?

  1. How to effectively play the large fabric market
  2. How to maximize achievements in the textile exhibition

II. There are actually so many fabric resources online? !!

  1. Platform-based Website sharing
  2. Trade-based fabric companies sharing
  3. Professional textile brand websites

III. How to create a personalized fabric manual?

  1. Creating according to the category of fabric
  2. Creating based on a theme

IIII. The retrospective summary of the 1st – 6th fabric special course

In fashion public welfare class

You will be able to:

Find fabric resources that are suitable for you in a more accurate and efficient way,

Manage them with efficiency and use them with flexibility.

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图片 121副本

 

Sourcing Fabrics

-Small wholesaler

-Intermediary

-Importers and warehouses

-Commodity Fair

-* Textile mills

 

图片 122副本

 

-Agent

How to excel at fabric exhibitions?

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Lecturer perception: the rise of the custom-tailor industry / baby’s fabric area / sustainable development area

 

Fabric market

 

Advantages:

More direct feeling of the fabric (market price / drape / feel / color)

Collecting samples / proofs (material collection for MoodBoard)

Observe fashion trends (color / pattern)

 

Domestic fabric market:

Keqiao, CUHK and Evergreen in Guangzhou

 

 

Factors to consider when purchasing fabrics

 

Gram weight: Gram weight per square meter | Gram weight per meter | Mm (usually in silk fabrics)

Width: 150cm (for trimmings, this width can maximize cost savings) | 112cm | 45cm-375cm

Orientation of the fabric: Downy (velvet | downy cashmere and wool)

Direction of prints (single placement print | single side placement print)

Test: composition, color fastness, antistatic performance

Small TIPS——abbreviation of fiber name (click image to enlarge)

图片 124副本

 

Environmental considerations: carbon footprints related to manufacturing, ethics and fair trade issues, disposal of final fabrics

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Online fabric resources

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purpose

 

Conveys ideas of Moodboard;

Helps organize fabric knowledge systematically

method

 

Fabric type: knitted, woven

Ingredients: Silk | Wool | Linen …

Theme: Color | Pattern | Texture

Christine Tsui Fashion Open Welfare Class

Review and summary of the 1st -6th special fabric course 

Click on the title to jump to the course interfaceClick on the title to jump to the course interface

 

  1. Basic concepts of fabrics (basic literacy)图片 128副本
  2. Demystifying imported fabrics (maintenance of expensive coat fabric)

3. Maintenance of autumn and winter fabrics (animal fibers) 图片 129副本

 

4. Maintenance of silk图片 130副本

5. Travel in search for beautiful cloth -Beautiful cloth around the world

6. How do designers create their own exclusive fabric resource library

(This lesson is lesson 6, so there is no picture)

 

Lecturer Booklist Recommendation

 

图片 132图片 131

 

What Are the Current Development Status and Trends of Short Video Entrepreneurship? How Can It Be Better Integrated with the Fashion Industry? 

Christine Tsui Fashion Community

What Are the Current Development Status and Trends of Short Video Entrepreneurship? How Can It Be Better Integrated with the Fashion Industry?

Discussion of Tang Yu, etc.

FOREWORD

Why do we discuss the importance of short video entrepreneurship, fashion and related industries? Since short video entered the public in 2015, it has continuously become an important part of the development of original media content creators. From December 13, 2016, Wechat Moments developed the function of uploading 10-second video, which further indicates that Wechat Moment has also realized the importance of short videos.

 

What Are Short Video’s Advantages as a Start-up Business?

Since the short video entered the public in 2015, it has continuously become an important part of the development of original media creators. The cases of Papi Jiang and Gu Amo can be credited to be relatively successful in the development of short videos in recent years. For other countries, YouTube, with short videos as the main form content presentation, has become the second largest search engine. This form of viewing anytime, anywhere, and completing the content in just a few minutes meets people’s needs in their fast-paced life today.

The shortness of short video is relative. The short here mostly means faster than the movie expression, more direct than the text expression, and relatively shorter and richer than the programs we have encountered before short video. In fact, although many short videos seem to be short, they are the result of the selection of the best ones. The advantage of short video is that it can fully meet the requirements of people in the modern world to extract information in fragmented time. In the shortest possible time, sharing the most effective and attractive content can make consumers and viewers understand more directly what the product and broadcaster in the video conveys. In fact, it is a greater testament of the editing skills of video shooters and editing abilities of content providers. If we are consumers, we may have an invisible sense of security for businesses or media that provide short videos and feel that this product or brand is more authentic and trustworthy, and we can also gain the information we want more directly in videos than text or pictures. In the entertainment era, brands from all industries are competing for user attention in the hope of obtaining faster and more direct user feedback for product improvement–including the current barrage function, they are all developed to meet everyone’s feedbacks and wills towards the unilateral output of media. At the same time, short videos can also satisfy consumers’ desire for peep, display and their curiosity, as well as everyone’s pursuit of beauty, promoting the evolution of interaction. Snapchat’s successful listing in the United States is due to people’s favor for short videos. The fashion industry has begun to pay attention to this form, alsp because it can transmit fashion brands and creator’s ideas to viewers in the shortest possible time through these short and refined videos, so as to seek the sense of recognitionand cooperation opportunities.

Indeed, compared with text, short videos are more penetrating and convenient for users to experience and understand. Compared to movies, the requirements of short videos are simpler, making it easier to operate. It applies direct audiovisual methods, rich content elements, and entertainment narrative techniques to communicate to the user effectively about the message you want to deliver, thereby establishing a close connection between the audience and the creator. In addition, compared with text, the interaction between the short video and the user has a higher level of attraction, and it is more penetrating than text, which is convenient for experiencing and understanding. As the pace of modern life is getting increasingly fast, the time that people are willing to spend on texts is decreasing. The original interaction model can no longer satisfy the audience. While accepting media expressions, everyone also hopes to hear their own voices, which is why the interaction attraction level that users demand towards various media forms is becoming higher.

 

What Preliminary Preparations are Required to Make a Short Video?

At present, due to the popularity of short videos, many people believe that the threshold of short videos is very low, which may lead to an overcrowded but low-quality output. Some people may mistakenly believe that the starter requirements for short videos are high, which makes them scared to try. In face of the two disparate perceptions, what exactly do we need to do if we want to do well at short videos?

I think it’s important to firstly have some basic video knowledge– basic video knowledge and the ability to tell stories “picture by picture”. Take the example of Papi Jiang–Although there was no team behind her in the early stage, with a certain film and editing expertise, she could record her own clips and get high ratings without a team. At present, many short video producers do not have this knowledge. Therefore, these video contents are just recording journals, or they are just aimed to highlight the dynamic picture effect regardless of the inherent content of the video.

The second point is to have ideas–the core creative design. It is not easy to achieve consistent output, which requires good ideas and creativity, without which it will only be overwhelmed by the work of other creators.

The third point is the conscious conversion of text logic to video logic. Since the expression method and structure of text and video different, to gain traffic through short videos, it is important to pay attention to your own expression- expression with a purpose will make it easier for the audience to understand.

The fourth aspect is the positioning of the audience for video distribution and the choice of the delivery platform.

Apart from these four, the quality of the video is also the basis. However, many people believe that the most difficult part of short video is the post-production and processing. Although nowadays many Apps can edit and add special effects to videos, this is supposed be suitable for individuals with limited funds or without special training in video production, saving them a lot of troubles. As long-term videos with content and connotation, in terms of editing methods, techniques and packaging, they should not totally rely on the apps. It is also necessary to learn and understand professional video post-editing software, or to establish a team after developing into a larger scale.

Generally, companies with short video content have their own post-teams, and the pay terms for post-editors may vary in different companies. However, Papi Jiang, who became extremely popular through her short video content creation, did not have a good editing at first—it was just average. The fact that she became popular through editing the long videos she saved without a team manifests that content and creativity are more important in short video contents.

 

Where Does the Commercial Demand for Short Videos Come from?

The demand for short videos mainly comes from several aspects. The first is the advertising companies in the market. Since the cost of short videos has now declined, most companies can afford it, including many small companies. While this market will be popular for some time, at the same time, it also encounters the problem of uneven industry. Today’s advertisement requires more skills and tricks. Spreading through short videos on food or social platforms is a common way for them.

The second is the major self-media platforms and their corresponding users. Individual short videos have a lot to do with your content and the people you target. Although part of the needs of ordinary users may be blind, there are also those directly targeted at consumer groups. Another large part is targeting at franchisees. A media practitioner used to analyze that except for the 20% of his videos viewers who truly understood and supported him, the remaining 80% of his reposts came from average users.

After all, the popularity of short videos is not only the demand of the market, but also the need of the era, consumers and users. For many companies, their largest motivation of making short videos is profit, which comes from their target consumers. When the early network technology was still in the 2G and 3G era, users might be satisfied with graphic content with shorter loading times. However, with the continuous emergence of various beauty software, consumers have become skeptical of the authenticity of pictures in graphic content. Through the emergence and presentation of short videos, on the other hand, despite post adjustments, users will still believe that to a certain extent, the authenticity of this dynamic form is higher than graphic content, which also applies to the following popularity of livestream. Therefore, brands have noticed this, and use this method as a carrier to impress consumers, gain their trust, and thus gain market access.

 

Short Videos and Fashion Industry

What is the status quo and future of the fashion industry under short video marketing? Short video is a trend in itself, to which the fashion industry is also adapting. Video advertising has always been an effective tool for major fashion businesses. But now the fashion industry is no longer limited to video advertising on large platforms or mainstream media. The fact that Everyone has extended from posting short videos of clothes and shoes on Weibo and Wechat Moments to now, when they spend more time introducing product content through livestream is essentially an extension of the length and depth of the video. The purpose is to generate more direct, effective and face-to-face communications with fans and customers, hence achieving information sharing, fashion dissemination, and emotional interaction.

The development of the Internet promotes short video as its inevitable product. Basically, none of the brands or industries does not take video. Short videos are different from advertisements. The purpose of advertisements is to attract interest, while short videos can tell brand stories. For example, there was some time when major luxury brands use short videos for branding. For example, Independent and Energetic Women from Dior and Inside Chanel from Chanel tell brand stories through a series of exquisite short videos. Rebecca Minkoff in the United States is also very successful in short video. Reposting interesting short videos on Wechat Moments can promote the products to a certain extent. As for the short film clips of brands that are currently dropped in Wechat Moments, there tend to be a lot of people who pay attention to and like them. This phenomenon of short videos on Wechat Moments has become a trend for promotion, and a lot of accounts have even started selling clothes through short videos on Sina Weibo. A lot of Wechat sellers have also switched from posting pictures to recording small videos. Especially for the clothing industry, the dynamic effect of models in the clothes is be better than pictures. In fact, it is not difficult to conclude a trend from this: nowadays, fashion and technology are more and more closely connected, and in the future, it may be possible to order through one direct click on the video. Short videos and the fashion industry are bound to be connected together as well.

The medium of communication changes with technology, and how to be in the spotlight is the eternal topic in terms of promotion. Nowadays, WIFI is available everywhere, traffic is cheap, and the form of expression for small videos is rich (combination of audio and visual), which can better enable people to obtain information in videos. Individuals are more willing to choose to see what is conveyed in the video when the texts appear to be simple and boring, on which people are reluctant to spend more time. Now that short videos are becoming popular, everyone is more willing to produce content through it. Therefore, many apps have currently developed the function of short video. In addition to short videos, live streaming has also become popular among brands in the fashion industry, becoming a recent hot spot with a lot of traffic. The Internet is developing rapidly, so it is reasonable that we believe that before VR, the combination of the fashion industry and short video will only be closer. If hardware peripherals can be popularized in the future, the close cooperation between VR and fashion industry will definitely be the trend.

When it comes to the combination of short videos and fashion industry, the first thing that comes to my mind is to express people’s concern vividly through graphics and pictures, such as “Feidieshuo”, which makes you feel that knowledge has never been more interesting. There are also storytelling models like “Yitiao” and “Ergeng” that will also intrigue readers. Video is more direct than words, pictures, and audios, making people feel that learning is also like watching a movie, immersing you into knowledge unconsciously. For example, the official account “Bigger Institute” is to deliver some interesting knowledge of the popular stuff to everyone through video clips. Recently, it has been talking about the collision of a bag from a famous brand with IKEA. It has also talked about some Western etiquette or cocktail knowledge before, which were also great.

Short clips with stories are the most attractive for people; with a good story, the shooting can even be done through the phone. In addition to the content of the short video itself, the repost and discussion on short videos is usually a geometric multiple compared with the text, so deep interaction is important. How to generate interaction? Videos can include links, or it is necessary that interactive nodes are set up on the content, or more directly, set giveaways lotteries for reposts—all these methods can make your short video content interact with users. In addition, you might be able to gain different perspectives through a readership and better communication with readers. Interaction brings traffic growth. In addition to traffic conversion, advertising is one of the biggest profit points for short videos. Miaopai is a good short video business model. With an ecological combination with Weibo, it has become the largest short video platform on IResearch through its good capital performance, large user group, and strong distribution capabilities.

 

How to Maintain Mass Production of High-quality Content?

How to maintain mass production of premium content? I believe this is important to everyone who cares about the future development of the industry. Compared with text-based creation, the production cost of short videos is relatively high, and professionalism is not guaranteed. Even some TV station teams are unable to provide sufficient high-quality short video content.

For a consistent high-quality content, I believe that two aspects needs to be clear:

  1. What kind of content can the creative team present?
  2. What kind of content does the target audience need?

Arranging contents in an organized way based on correct self-positioning is the basis for achieving sustainable output of high-quality content. But more often than not, it is an ideal goal to ensure that each issue can meet the standards of everyone with its high quality. Since different audiences have various understandings towards the definition of “high quality”, based on these two aspects, if the content or idea you intend to convey can be perceived by the viewers, then it is of high quality. Appropriate contents delivered to the target audiences is good content for them. Usually, it takes experience to choose a topic with traffic; it might happen that only 20% of people really understand you, but the repost can come from the remaining 80%, which manifests the importance of selecting a topic.

Is it necessary to try niche subjects? Is it required to catch popular hot spots? Niche subjects have their own demand groups, and it is also feasible to follow hot spots as a pitch point for niche topics. The application of hotspots can bring traffic to other contents, and unpopular topics can catch people’s attention. Sometimes popular themes cannot ignite everyone’s enthusiasm, but rather, niche topics are impressive. Although the audience for niche subjects is small, this is exactly a testament to the low video production cost threshold and fast transmission speed of short videos. However, professionalism is also a solid foundation for fast communication. Most of the major official accounts that are doing well on WeChat are media practitioner. Why? profession! Those who handle short videos well are also usually professionals and teams. This is because short videos are not only a tool for learning, but also a tool for communication. The effect of communication is hardly related to the acceptance of the audience, but rather, to the professionalism of the producer. However, the cost for high-quality short videos is often high, which is difficult for average teams to achieve.

As entrepreneurial contents, short videos have strong penetrability and high level of interactive attraction. Fashion industry can provide the audience with the matching contents and product features in a direct, diverse, entertaining and effective way through the vivid combination of videos, words and audio, establishing a close connection between the audience and the creator. Meanwhile, the establishment of a deeper and more effective interactive interface with readers can realize direct and effective face-to-face communication with fans, so as to achieve information sharing, fashion dissemination, and emotional interaction. The trend of fashion industry marketing through short videos is irreversible and will intensify in the future. We can also predict that the fashion industry will be more closely integrated with technology in the future.

What Is the Current Situation of Cross-border E-commerce? What Transformation Opportunities Are There? Where Will the Post-e-commerce Era Take Cross-border e-commerce?

Christine Tsui Fashion Community

What Is the Current Situation of Cross-border E-commerce? What Transformation Opportunities Are There? Where Will the Post-e-commerce Era Take Cross-border e-commerce?

Xu Lele-Shanghai-yMato Procurement and Sales @ wechat: x1395711770

Former channel manager of New Zealand Countdown supermarket office in China. Former procurement Manager of B2B Global Procurement Division of yMato.

FOREWORD

The Internet has deepened the globalization of shopping. With the continuous advancement of technology, the once-popular cross-border e-commerce environment has changed a lot. What kind of different cross-border new e-commerce will the 5G era bring?

The major experience that e-commerce brings to us is the shopping experience that breaks down time and space. We also collectively refer to these global e-commerce platforms as cross-border e-commerce. Cross-border e-commerce is generally a type of e-commerce, but it is different from general trade. General trade belongs to import trade, which is usually a business behavior between enterprises, while cross-border e-commerce is usually directly facing consumers worldwide. In addition, they are different in many aspects such as taxation system, supervision method, import link, transaction method, and business model.

 

Overview and Models of Cross-border E-commerce Platform

Currently, the platforms we know, such as Koala, Tmall, Amazon, eBay, and Wish all have cross-border businesses. These are actually domestic import and export platforms. Are there any differences in their platform models?

Koala, Tmall and Amazon are all more familiar and commonly used cross-border e-commerce platforms, so I won’t go into details here. eBay and Wish, which are still relatively niche in China, are mainly e-commerce platforms used abroad. What is the difference between the two?

eBay is the  largest online merchandise trading platform in the USA, allowing people around the world to purchase, sell and auction items on this platform. Compared with Wish, eBay mainly targets the European and North American markets. The model is similar to that of Taobao in China, with complete categories and low barriers to listing. Wish is an emerging APP-based cross-border e-commerce platform. In recent years, it has quickly attracted consumers in foreign markets. Its core categories are mainly apparel, mobile phones and gifts. Before the establishment of its cross-border e-commerce platform, Wish was just a tool for managing products. It mainly focused on sub-categories of products, recommending some products according to customer preferences and promoting by content sharing. Its products are mainly shipped from China, and most sellers are Chinese. Its product features are low unit price, low weight, high gross profit, good quality and low price, and the main market is the North American mobile endl.

These cross-border e-commerce platforms are usually divided into different models like B2B, B2C, and C2C. I used to do deal with B2B at yMato, which is a C2C platform.

B2B (Business-to-Business) refers to the fact that both the supply and demand sides of the e-commerce transaction are merchants (or enterprises and companies). The B2B model is similar to traditional general trade, which is simply a pallet for large orders. Its representative is Alibaba.

B2C (Business-to-Customer) refers to the model where the supplier is the merchant and the demand side is the consumer. It is an online shopping channel provided by most companies for consumers through the Internet, and it is able to sell products to consumers directly online. Its representative platforms include Amazon and JD.

C2C (Customer to Customer)— individuals to individuals. Now there are some platforms for individuals to sell products to other individuals. This platform mainly relies on the current logistics industry. The biggest advantages are low inventory, low capital, and low thresholds, such as small- scale Taobao shops, but the more representative platform is actually eBay and yMato. yMato is aimed at smaller individuals overseas. For example, if you are an international student or a salesperson of an overseas supermarket, you can put the product on the yMato and sell it to Chinese consumers through the platform. The well-known purchasing agents, who directly ship products to domestic consumers, also belong to this mode.  If there is a platform in the middle that can connect both sides, it is in C2C mode. These are different modes of e-commerce, but the fact that docking ports of various modes are different determines their own characteristics.

 

Under the Premise of Increasingly Intense Competition, What Kind of Directions for Transformation are There for Cross-border E-commerce?

In fact, currently, the threshold for cross-border industries is getting increasingly high, and platform traffic is slowly falling. Judging from the current status of cross-border e-commerce in China, manufacturers who really profit are overseas brands. Relying on their own brand advantages and channel advantages, brand owners directly authorize China’s supply chain or TP (Tmall Partner) agents. TP is the acting operator. The relatively powerful brands have offices in China and are responsible for procurement themselves. In a certain way, the distributor refers to the supply chain company that helps a brand sell, mainly focusing on trade attributes. Nowadays, cross-border distribution is becoming more and more difficult–The price limit of brands, the control of channels, the instability of the market, etc., have all restricted the dealer’s authority. Most of the dealers currently based on B2B and B2C models have fixed sources of supply and channels. The C2C dealers, on the other hand, are scattered and the individual volume is relatively small.

From 2015 till now, cross-border imports have gradually become the Red Sea. The cross-border imports that everyone knows are no longer what they usually are, and many people are thinking about ways of transformation! Take Danone as an example—it has several types of the most popular milk powder. In the early years, the traders who cooperated with Danone were mainly B2B, wholesaling to Hong Kong customers directly. Now Danone directly authorizes to several major customers for sale, such as U1Baby Online,as well as Kidswin and Yuou Offline. This way of making their own supply chain system based on their advantages is called “clutch chain” in the industry.

The reason why cross-border e-commerce began to think about transformation is that after the dividend period of previous years, the current development of e-commerce has also begun to face unavoidable development bottlenecks. What is their dilemma? Should they choose platform or positioning? In fact, whether it is platform or positioning depends on the capabilities of all parties. When the development of cross-border import trade enters its second half, it is time to start to competition of the overall strength of the supply chain. For small cross-border importing businesses, when they entered the industry, the fact that the price was not so transparent, and the market competition was not so fierce neither made it easier to achieve profitability. But now, while the path for import are becoming clearer and the prices are increasingly transparent, the market is still dominated by the first and second tiers– the speed of sinking to the third and fourth tiers is very slow, making the share of the cake smaller.

Which direction should cross-border import and export businesses go? How to do cross-border business well? This has to go back to 2015, when import trade was still a blue ocean–platforms such as Koala had not yet emerged, and various national trade policies of the country were slowly being liberalized, without formulated policies. Identifying the prospect, many companies earned their first bucket of gold by adjusting from general traders to cross-border imports. China’s cross-border exports also started in 2015, when Shenzhen’s major sellers were also confused and did not know what to do. But at that time, many small business owners who were engaged in exporting thought that they saw the opportunity. Although they wanted to try it, there were no overseas channels. At that time, many cross-border forums appeared in Shenzhen, and many companies would pay a fortune hiring talents majoring in international trade.

Koala and Amazon have done well for some time. But now it seems that cross-border e-commerce and foreign trade are starting to experience difficulties, such as increasing tariffs. Even for the industry giant Amazon, it is not easy: VAT has to be paid in Europe, and the competition in North American is getting increasingly fierce. There are still prospects for development in the Canadian market, but currently more platforms have started taking the route of boutique. The requirements for products are also getting higher. In order to gain unique advantages, it is best to be serialized and systematic. Currently, among these platforms, Amazon is still more suitable for merchants with production systems to take boutique routes. In addition, there are also many merchants who build their own websites without relying on third-party platforms—they have the conditions for transformation.

Compared with domestic e-commerce, cross-border e-commerce has its advantages in terms of transformation, since it does not draw distinguish in geography.

If you are a factory with your own set of production system, all you need to do to get onto Amazon is improve the product quality, move closer and upgrade towards the product lines that are systematized with boutique route. If you are a trader who wants to do business on Amazon, it is recommended to deal in products in small categories, low unit prices, low weight, and high demand—Market is relatively large for this type of market. In 2015, when cross-border exports were surging, many people realize that this is the market trend and they wanted to be involved. There were also Many people desperate to do it, creating a lot of accounts in advance to occupy the “pits”; now they refined them slowly, gaining a lot of profit. Although this method can occupy a certain market share in the early stage, the current difficulty lies in its heavy inventory pressure. In addition, with the popularization of real-name system, this method of creating multiple accounts in a large volume is no longer feasible.

What are the other ways of transformation? It used to be the development from offline to online, and now, there are online platforms that transform to set offline experience stores. For example, Shopify’s self-built station has started offline foreign trade. In addition, there are also those who make tens of millions a year through sales systems, such as Woocommerce. Woocommerce is a self-built mall system, which is mostly used by foreign trade customers. Just by selling this mall system to companies that do foreign trade, it can earn ten million a year. The number of customers in this field may be greater than we imagine. For independent e-commerce websites, they have also realized that they need their own living space, that is, self-built websites. The self-built websites used by the back end mainly include Shopify, Woocommerce, and so on.

Developing subdivision categories is also a direction for transformation. Everyone used to like wide track and high gross profit. Now, whether it is import or export, many categories are developing well. They may not be large categories, but they can achieve Top Sales in small categories. However, foreign e-commerce models are still different from domestic ones—they are not like China, where Taobao is such a huge platform and such a large market. The services provided by Taobao platforms, especially secured transactions, have Chinese characteristics. A great source of traffic for foreign shopping searches is Google, but there are many websites with vertical category segmentation abroad, for example, there are shopping websites that deal in clothes and shoes respectively. Integrated and unified platforms also exist, such as Amazon, eBay, but neither of these sites has achieved such a large market position as Taobao, whose slogan is that Taobao is omnipotent. It seems that no website abroad dares to claim that credit, but the mindset of domestic e-commerce is not enough for foreign trade, due to the differences in environment and background. Since credit is important abroad, the credit system is relatively complete and fixed. Purchases on eBay is paid through PayPal–because they are already used to it, they think it is very simple, therefore,  there will not be revolution in payment methods in spite of Alipay in China. Refund is also available any time in the United States. People with real names in the United States can only have one account, which is different from China, where you can often have multiple accounts. In the United States, when eBay and Amazon find something in your shopping cart or products you browsed, they will basically notify you the price and latest situation of the products or similar ones every 1-2 days. As a seller, the system will also tell you who is interested in your products after viewing them, and that if you lower the price a bit, maybe you can close the deal. However, with the popularity of big data, Taobao is currently able to promote products, remind and notify users based on their preferences.

 

Post-E-commerce Era

The platform behavior of combining big data analysis, intelligently promoting users with their interests combined with text, pictures, videos and other content so that you see what you are interested in, and the website where you bought products promoting related products reminds us that we are moving towards the “post-e-commerce” era, and the more mature post-e-commerce era may develop towards contextualized one-stop shopping. Now Taobao has begun to set up personal avatars, which may be the first step towards an immersive user experience in the future. While it used to be E-commerce, it could be A-commerce in the future. AR and virtual shopping experience can solve many existing difficulties including inaccurate fitting sizes, which is also a subversion to the past and entrance to intelligent shopping. If this model can be implemented on games, then it will be fine on shopping. Viewing it from now, it may be realized soon.

With the advancement of technology, advertisers and media will use technology to make shopping products more diverse and attractive. In addition, the 5G era has brought us more chances and opportunities, so various applications can promote contextualized shopping. Future shopping may be like imitation of an entity. Building an entity on a large platform, for example, putting well-known architectures around the world on the platform and consumers go directly to shops, watch movies and play games in the headsets– mature packages of this already exist in cross-border e-commerce. The Shopify mentioned above is just an example of combining AR and VR.

What can the technological revolution bring us? We tend to be unable to see the whole picture in the flow of history. With the development of technology, the “contextualized one-stop shopping” of e-commerce may be achieved in the near future, and online shopping can be as real as in a physical entertainment street. Physical stores also need to consider making new retail experiences, deeply cultivating artisan spirit, creating personalized experiences or “anti-tech” experiences. In the future, when we achieve material abundance and it reach a certain saturation, what the market needs may not only be products, but service consumption that pays more attention to spiritual level.

If “contextualized one-stop shopping” can be achieved, what e-commerce sells is no longer only the past products itself, but more likely, it will focus on the service consumption before the rise of e-commerce. Currently, the mode of cross-border import and export is basically fixed. It is nothing more than B2B, B2C, and C2C. The direction of future development will definitely be scientific, experiential and intelligent. For us, there are opportunities as long as we make decisions based on the actual situation of our company. E-commerce is a platform and a way of selling. We need to look at its role in a rational way. More essentially, we should seize the development trend and take the foothold of product core.

In the “New Retail” Era, How Do Small and Micro Fashion Companies Expand and Manage Sales Channels?

Christine Tsui Fashion Community

In the “New Retail” Era, How Do Small and Micro Fashion Companies Expand and Manage Sales Channels?

Yibai-Beijing-Channels etc. @ Wechat

Yibai graduated from Tianjin Polytechnic University with a bachelor’s degree in fashion design and engineering and a minor degree in English. She attended the Postgraduate Course of Import and Export Strategy and Management at the University of International Business and Economics. Invited lecturer at Beijing Institute of Clothing Technology, she has assisted in teaching courses such as “Luxury Fashion Management” and “Consumer Behavior”. Yibai has the experience of managing distribution channels for high-end socks (domestic and foreign OEM and ODM channel negotiation and follow-up; domestic brand channel expansion and distribution, etc.).  She has also operated an online store independently.

In the context of new retail, what should channel management for small and micro fashion companies do?

Before answering this question, let’s take a look at an internal industry article in 2018. In the article “Inspecting China’s Street Fashion field from INXX 丨 LuxeCo’s  Exclusive Interview with Co-Founder Liu Kunneng”, it said:

“The fashion brand collection platform INXX was established in 2014. Currently, it has opened more than 130 offline stores in high-end commercial complexes such as Hang Lung, Intime, Kerry Center, etc., with annual sales of nearly 400 million yuan. Recently, LuxeCo interviewed Liu Kunneng, the co-founder of INXX. It was rare to hear the in-depth contemplation from an industry insider who took street fashion as a serious business.

“INXX conducts market expansion through multiple methods including direct management, franchise, and joint venture. Based on the experience of the founding team’s Internet operations, online operations are completely satisfactory, however, it lacks operational experience and channel resources offline.

In the early stage, we tried a lot of new retail methods online, such as Pop-up store, ordering through iPad, etc. Problems have occurred, and later we adjusted our strategies by doing what should be done online and offline respectively, but also using the Internet operation experience to make the two combine effectively. For example, INXX’s space design has a lot of highlights with visual impact. At the same time, our team also followed the traditional offline operation models in combination with the open mind Online, gradually settling down and forming a set of INXX models. ”

Liu Kunneng believes that omnichannel development is necessary, such as combining the member management system with various platforms and channels to form information flow, customer flow, and product flow. In addition, “we focus on extended shopping scenarios, not just in stores.”

“Through practice, INXX has established a complete store evaluation mechanism in terms of operation management. This is a process of continuous correction to reduce prediction errors. In the end, instead of being radical, we opened a hundred stores in 4 or 5 years. We hope to find the right senses in the exploration process to open the store steadily. ”

Why do I start from this article? Because it has mentioned a problem, that is, the early channel establishment of small and micro brands. Promotion budget for most brands, especially small and micro brands is limited, and they often have limited expenses and less staff. However, even with little promotion budget, businesses often hope to achieve good results, so as to achieve simultaneous growth of brand reputation and conversion. Nowadays, it is said that “traffic is the king”, but the current traffic is still at a stage of high price and difficult conversion. Generally, the aim of other channels (non-e-commerce) is just to establish reputation and shape brand impression. The platform for real purchases will still be switched to Tmall, JD.com and others. In this industry chain, what should small and micro brands do? Let’s make a hypothesis first — assume that a designer is an independent designer and operates his own brand. The reality he currently faces is:

  1. There is a store that he rented with average turnover but high operating cost (labor, store rent, inventory, etc.);
  2. He hired someone to manage his own online store, (there is an artist and an operation specialist), whose turnover is average;
  3. The main turnover lies in domestic and foreign buyer stores, but if the order is large, while the unit cost is low, the advance fees such as fabric production will be high, and the repayment period through the channel is long; Costs for small orders are high and the profit is low, which is time and energy consuming.

In fact, cases like this hypothesis of independent designer’s self-supporting business can be found in reality. In view of the situations above, the designer now wants to temporarily close the self-operated store and turn to stall wholesale and retail, whose repayment is faster. Is this a right mindset? Should we carry on when the current operating costs of self-operated stores are high? What are the reasons if we give up?

It is undeniable that there must be sufficient funds to support branding. The first problem that must be dealt with in physical operations is high rents, followed by high staff costs and changes in customers’ offline consumption habits. Although currently the rent of designer’s option—the stall is not low neither, the retail store has a smaller customer base and a lower unit price compared to it. At present, due to the impact of the Internet, many offline stores are indeed in a state of relying on their luck; ineligible operation is a great burden for most small and micro enterprises. Despite this, many small shops can still continue to operate smoothly and steadily. Operation is a dynamic process. In addition to considering the current situation, we also need to focus on the long-term direction. In fact, if you want to grow from micro and small to large scale, self-operated stores are still necessary.

The reason is that even if there are shops online, most customers still need offline experience to buy products online, therefore, offline is still an important platform for customer experience. Even if AI technology is further developed in the future, the online experience can hardly match offline experience. At the same time, offline stores can directly learn, record and investigate the consumption habits of target customer groups, which provide designers with more direct information. Therefore, if the company’s funds allow it, it is still required that a brand has its own offline store, whether it is a prototype store or a brand boutique. But at the same time, it is necessary to calculate the balance of profit and loss.  A good VIP service and strengthened customer experience are also good brand promotion channels.

In addition, what we need to know is that the cost of online customer acquisition is not low nowadays, and online traffic acquisition and conversion are not easy. If you have a regular customer base, focusing on offline retail may be more stable. Plus, since the domestic market is large, there are still many customers who, instead of buying clothes online, choose to buy them in a physical store.

Rather than whether to continue operating offline stores, what small and micro enterprises consider first is survival. Operation needs efficiency, and a brand should spare no effort to improve the experience of offline stores. However, based on different developments, if it is difficult to afford the high cost after comprehensive considerations, it can stop losses in time and give up temporarily. In the long run, there should still be direct-operated stores, and it is better to combine physical stores with online stores. Alibaba’s plot on Freshippo and Tencent’s acquisition of HLA both indicate that the offline traffic is a new lowland. The combination of offline experience and online purchase is the best for consumers.

What are the common KPIs for directly operated stores or channel terminals? In the era when KPI is the king, businesses have to prove themselves through data, so that ordering, distribution of products, listing planning, replenishment, promotion and management of goods can be rational, beneficial, and restrained. In terms of monitoring and trend analysis, buyers’ personal visits to terminal stores are beneficial to the correction of “deviations” caused by pure data. Also, attention should be paid to the difference between single regional stores in comparison to competitors.

图片 204副本

(Source: Hermann retail Weibo, China)

The data commonly used for the assessment of a shop’s KPIs can usually refer to the chart above, which includes 11 core performance indicators: sales rate, inventory turnover rate, surface efficiency, cross rate, seasonal index method, associate purchase rate, and customer unit price. These indicators are also the 11 key passwords to leverage store profits. Here I will share the article “Hands-on knowledge: Eleven Key Passwords to Improve Store Profits” published by Longshang.com on June 3, 2015. The article has mentioned how to define and decrypt these 11 passwords, for example, human efficiency refers to sales per person per day. Monthly staff effeiciency of the store = sales of the store in the current month / total number of people in the store (including the manager, cashier, shop assistant, warehouse manager, with night attendants and securities excluded) / days “. The indicator of human efficiency reflects the following issues:

  1. Product knowledge and sales skills of employees;
  2. Matching between employees and products;
  3. Whether the schedule is reasonable.

(Note: source of the texts above: Longshang.com)

In addition to the significance of the data themselves, we can also use them to guide us for further improvements of store operation, such as enhancing the store experience, holding more activities to attract attention, training sales staff, occasionally adjusting display, unified online and offline accounting, etc. The direction of store operation mainly comes from customer feedback and the objective comparison with neighbor or similar stores. For small and micro businesses or stores, human is fundamental. Service and communication are achieved through front-line service staff, therefore, shop assistants are the key. With enhanced abilities of shop assistants, the transaction volume can be raised. You can also encourage shopping assistants with high sales volume to share their experience. However, it is necessary to give shop assistants an attractive commission and incentive plan, which is for the seller’s profit.

From the buyer’s point of view, it is necessary to provide customers a cost performance experience that exceeds their expectations. Making customers feel that they have taken advantage does not necessarily mean it is cost-effective; it is a self-feeling.

 

Should I Still Carry on If The Sales of Self-operated Online Channel are Average?

As mentioned above, what offline and online stores need is combination instead of conflict. How to achieve integration? In the context of new retail, a good growth point is to manage offline community operations well; in addition, offline brands can also test market feedback and channels through “pop-up stores”.

Case: “Kenji Wu opened his streetwear store in Sanlitun, claiming  ‘100 stores will be opened in three years’”, The Curiosity Institute (http://www.qdaily.com/articles/44505.html)

“Kenji Wu opened his streetwear store in Sanlitun, claiming ‘100 stores will be opened in three years’”. Opening a pop-up store before setting up a formal store is a way for the brand to test the mainland market channels.

According to media reports, since 2014, Debrand has opened pop-up stores in Shenzhen, Chengdu, Beijing and other places.

In a media interview in June this year, Yu Guoan, the manager of Taikooli, Sanlitun, called the pop-up store “a bilateral selection process”: “Through the pop-up store, we can know whether the brand has potential for development, popularity, consumer favor, sales performance, etc.

On the one hand, it can keep the commercial center of TaikooLi in Sanlitun fresh and boost consumption; on the other hand, it is also beneficial for brands to promote and test the water in a new regional market. ”

This case illustrates that online brands are now seeking to integrate with offline stores. Why? Perhaps because the traffic is getting more expensive, the deterioration of this living condition forces them to find loopholes in the platform. Repressed by channels for years, these online brands have developed unconventional tact. Therefore, it has become popular to open a “pop-up store” first and then a “real store”. The meaning of the pop-up store is to “test”, whether it is the purchasing power of the customer base, or the acceptance of price and style, etc. How to manage a pop-up store? You can find some platforms or institutions that specialize in pop-up stores, such as “Pop-up Palace”. As WeChat thrives, these sellers, who are experience products, know very well that they must grasp the rule of “decentralization”.

This issue needs to be specifically analyzed according to the situation of the company, but the general view is that companies that are eligible for it should open their self-operated stores as the most direct store for brand awareness, image dissemination, product testing and role model.

But online direct sales also need to be carried on. Although it is difficult at the beginning, it is a cumulative process for a lot of things. If you have something ready when others need it, you have grabbed the opportunity, which means you have met the market demand. For online promotion, in addition to attracting traffic through Weibo, Tiktok and livestream, in fact, ground promotion can also be the most popular and down-to-earth method for online store promotion and recognition. Attracting the traffic from offline to online, on the contrary, although a bit old-fashioned, will lead to better quality than some fake followers, if efforts are put into it. Many supporting schemes have to be synchronized– Capital is the first step and then management follows.

Even if your company is exclusive to offline stores, when your brand is successful, there will be someone who fake it under the name of your brand, both online and offline. For example, there was a Victoria’s Secret shop in Shanghai a few years ago. Everyone thought that Victoria’s Secret has entered the Chinese market, only to find out later that it was just a fake and unauthorized store. There is something even scarier and undefendable, that is, the retailers fake the brand of their products –they represents and sells your brand while faking their own products under your brand, which disrupts the brand reputation.

Although it has become increasingly difficult to attract and convert traffic through Weibo and Tiktok, as a matter of fact, neither online or offline is east to operate. Do not give up online stores just because of their average sales volume. Instead, analyze specific issues. Online direct sales provide a convenient way for online customers to purchase products. In the current Internet era, an official online store is a must. Whether it’s for brand promotion, convenient purchase, or new-style test and prices test, it is very practical. Meanwhile, pre-sale of some designs can also be carried out online in advance, so as to add orders on products with good feedbacks in advance. Pre-sale can also greatly reduce trial and error costs.

According to McKinsey Online Luxury Consumption Report,  In 2025, e-commerce channels will contribute 19% of sales to the luxury industry. The ambitious Dubai Internet company Mall.Global wants to create a virtual shopping mall that fully replicates the offline experience.

“The Mall.Global project will be based on virtual reality (VR) and augmented reality (AR) technologies, coupled with artificial intelligence, so that consumers can experience at home the feeling of shopping in a mall. In addition, the project will also include cross-platform consumers functions such as loyalty programs, opinion leader evaluations, and support for multiple virtual currency settlements. Mall.Global will ensure user information security through EU Data Protection and GDPA. “(Text from: http://luxe.co/post/85174 )

In fact, you should think clearly about the position of your online store in your brand, and why you would open an online store. If you feel that your sales are average, you should solve this general reason: it is because of the channel itself, the product, or the people—it is only after analyzing these one by one that you can determine the nature to open an offline store. Analyze your target consumer groups and their characteristics, or shopping habits. We can analyze this through user portraits.

The latest NPD clothing retail industry trend report states that the key to success lies in connecting online & offline stores and expand consumer contacts.

The report classifies the interviewed consumers into six categories:

  • Social consumers (enthusiastic about shopping online and searching for information; sensitive to pictures);
  • Technical consumers (enthusiastic about obtaining more product information through technology; shopping attitude is cautious);
  • Trendy consumers (enthusiastic about pursuing fashion trends; sensitive to pictures);
  • Taobao consumers (pursuing cost-effectiveness with clear shopping goals);
  • Loyal brand consumers (willing to pay for quality, high brand loyalty, and only shop when needed);
  • Lazy “consumers (prefer one-stop shopping, don’t have time to shop and hate online shopping). (Source: http://luxe.co/post/86145)

Intentional strengthening can be applied in terms of website page design, marketing channels, etc. Online channels should also be categorized according to different goals: exposure, conversions, and new visitors. Professionals need to be invested if small and micro enterprises want to do business on platforms such as JD.com and Tmall. Moreover, attracting traffic is quite costly at the moment, which might not even result in higher conversion rate in turn. Although e-commerce is not easy, it can’t be abandoned. To establish e-commerce, you need to first learn to attract traffic with pictures and control costs through ROI. People are visual animals, so picture editing and copywriting are very important. At the same time, you should also understand the various other maneuvers on e-commerce platforms. These platforms have always been issuing new requirements and new rules; it will be more disturbing if you are fined accidentally. At the same time, traffic costs competition is fierce, so in the long run, it would be better to have an independent website.  In the early stage, promotion and introduction can be conducted, but accumulate step by step. Engage in low-cost activities to increases consumer loyalty—For companies with low budget, try to attract traffic through free channels, such as Weibo, Official accounts, etc. I will share the specific steps through the following two articles for your reference:

“Teach You How to Do” shop diagnosis ” in One Article”

(Https://weibo.com/ttarticle/p/show?id=2309404263091813632519)

“The Most Comprehensive Taobao Shop Diagnostic Method– Quickly Find the Core Breakthrough Point of the Shop!”

(Https://weibo.com/ttarticle/p/show?id=2309404093292693352422)

It is worth mentioning that, based on the enterprise, co-development of multi-channel online can be achieved. When online distributors are involved, the company should designate relevant staff to monitor the implementation of price policies and promotional plans of different channels, otherwise it’s easy to get out of control. With the popularization of the Internet and the rise of the sharing economy, online channels are increasingly valued by enterprises. No matter what kind of dilemma they face, many things are actually a process of accumulation. In the development of small and micro enterprises, they should cooperate with new media and pay attention to self-operated channels online. In terms of new product testing, they still have great advantages. In fact, in the channel of new media, there are companies doing very well no matter what the platform is; it is suggested to pay more attention to them in daily life to accumulate and draw reference from.

 

With Limited Time and Money, What Factors Should Be Considered When Establishing a Chanel?

Survival is the primary concern in the first stage, but the problem in this phase is that the advantages of the brand have not been tested by the market. At this stage, you need to see whether the user group of the channel itself coincides with your target customers. The first step is to look for similar companies to portray your users. First of all, the company itself should form a general understanding of its target users, and then clarify it through data to avoid fundamental cognitive bias. For example, I want to sell products to “fair, rich and beautiful ladies”, but somehow the store staff reported that most of the actual purchases were “new money”. This is the deviation. Through data analysis, you can more accurately formulate sales strategies and improve efficiency for your user portraits.

The first thing is usually to do what you can and focus on breakthrough. Prioritize whichever problem that can bring you profit soon by solving them. If the initial funding is limited, you can consider finding second-tier channels with target customers, such as advanced second-tier cities, and then enter central cities. It is very important to act according to our abilities, but we can’t let income affect the brand image, which should be protected in the early stage, while the channels can be limited and refined.

Survival does not necessarily require a powerful brand; an ability to survive proves it is a brand, because survival represents the satisfaction of some customer needs. It is feasible to consider the model after when there is a team and cash flow. However, you have to be prudent with the choice of brand channels– you can register for a sub-license for the wholesale channel, which means “open source”. Brand channels in the market are roughly divided into three categories: 1. Completely autonomous (higher requirements for retailers, but brand owners barely have control over its terminals); 2. Auxiliary support; 3. Complete domination (high requirements for brand owners).

Some retailers are relatively dominant and require buyouts. You can decide based on the situation of the enterprise.

But whichever method you choose, don’t leave it once the delivery is finished. The channel management staff should visit the store from time to time. An extreme case is that the retailer has developed into a larger scale and would like to make its own brand, but the product design and development ability is weak. After importing from the brand owner, they went directly to factories to change the logo on the clothes. The fact that many big brands choose not to enter the channel is also related to their own positioning, that is, the question of which advantage to pitch into. For example, in the case of the cooperation between new brands and Lane Crawford, since the advantages these new brands have are very weak in all aspects, they can properly compromise to platform for faster development.

For small and micro enterprises, how to make the “channel” find you? This can be achieved in the following ways:

  1. Self-promotion:
  2. Weibo account and official Wechat account, etc .;
  3. Media interviews and reports;
  4. Participating exhibitions;
  5. Good reputation– if a good reputation is established, retailers will also actively look for “you”;
  6. Keep up with competitive products;
  7. Department store, real estate, chain stores– conversations with the investment promotion department;
  8. E-commerce: JD.com, Red, etc., analyze investment promotion policies and evaluate costs;
  9. New opportunities: Keep an eye on industry news, for example, those of HLA and Meituan these days, to find new channels.

 

Here is an article about whether direct sales will become the future trend: “Strengthen Control, Outdoor Brand Columbia Acquires Remaining Equity in Chinese Joint Ventures”

(Source: http://www.qdaily.com/articles/52190.html)

French knitting queen Sonia Rykiel has accelerated the pace of reorganization: Japan’s distribution channels have returned to self-operation– womenswear and girl’s clothing product lines have found partners.

” Sonia Rykiel, the French knitting queen under the Li & Fung Group in Hong Kong is accelerating its pace of revolution by launching a key strategic decision: take back the Japanese distribution channel and implement self- control.”

“The licensed production of Sonia Rykiel and the Japanese / Italian luxury group Onward Luxury Group and the agreement of exclusive distribution in the Japanese market ended in A/W 2017. From the S/S 2018 collection, the brand will directly manage the Japanese market. After 30 years of cultivation, the brand has gained a very high reputation in Japan, which has also become one of the brand’s key markets. Company executives believe that direct control of Japanese distribution channels is one of the company’s opportunities. ”

In my opinion, the proportion of direct sales mainly depends on the development stage of the brand. Initially, the brand enters the market quickly through distributors and dealers. On the other hand, with considerable economic background and understanding of the local market, brands are more inclined to operate on their own.

 

What Are the Pain Spots in Channel Cooperation? How to Deal with It?

With regards to pain spots, especially for new brands and micro-enterprises, consider the issues of inventory and factory production capacity, billing period, online and offline price management in different regions, etc. In addition to this, there are also venue issues that offline entities often encounter. The conditions for traditional department store cooperation are renewed once a year or even every six months and are subject to adjustments and changes at any time. Some shopping malls implement elimination system. If the sales are not good for a while, they will move you to a bad location. In this case, you can cooperate through groups or carry out multi-brand collaboration. Performance is the key. Only with sales performance can we have the power to speak.

For online brands, the pain spots they face are more in terms of physical entities or offline cooperation.

“This 45-year-old sports giant will dramatically reshape its retail channel and focus on its key retail partners in the future, which accounts fo 40%”

“Currently, Nike’s retail network includes more than 30,000 retailers and 110,000 retail stores. Although it will not dissolve partnerships with all these retailers, in the next few years, the company will put its important resources, marketing strategies and exclusive products on a few limited retail channels. They will be “merchants who are willing to set up a unique Nike brand space in the store and have specially Nike-trained employees to assist in sales.” (Source: Nike announced that it will reorganize the retail channel; the revenue of the next 5 years will mainly come from overseas markets)

Online and offline cooperation is an inevitable trend. An important element in cooperation is to establish common performance expectations at the beginning of the cooperation, and then maintain close communication to ensure that the goals are achieved. At the same time, whether it is channel management or a buyer, as long as it is retail, it is better to visit stores and chat with customers and front-line shop assistants. Although the data is important, it is too abstract to look at the numbers alone, so on-site visits are needed.

In the new retail era, what should small and micro enterprise brands do? In summary, if conditions allow, shop assistants are the key to establishing a self-operated store and solving specific store operation problems; the cost for traffic through online channels is high so it is feasible to attract traffic through free channels (Weibo, Tiktok, etc.) to refine presale and reduce risks; if the money and staff of the company is limited at the initial stage, it is necessary to consider its own advantages when establishing channels. Multi-brands and multi-channels can be applied to ensure survival. Carefully choose  your brand channel vendors, cooperate closely and strive for a win-win situation.

 

 

 

 

 

 

 

 

Current Situation and Dilemma of the Wholesale Clothing Market

Christine Tsui Fashion Community

Current Situation and Dilemma of the Wholesale Clothing Market

Tao -Shanghai / Hangzhou- Wholesale Manufacturer, etc. @ Wechat

Tao, Shanghai / Hangzhou, Architect. Bachelor of Architecture at University of Melbourne. Tao’s family owns a business dealing with wholesale stalls for 20 years. Tao is often found in wholesale markets in Beijing and Hangzhou.

FOREWORD

Wholesale is a means of clothing sale, and it is also a very important process and link in the clothing industry, which controls the most important supply source in the entire clothing industry. It is indispensable for both manufacturers and vendors. From the reform and opening up to now, in just a few decades, China has entered the era of consumption upgrade from the stage of supply deficiency—so now, what course should the wholesale clothing market follow?

Distribution and Classification of Wholesale Markets

Wholesale markets exist in all major cities in China. In terms of scale, the wholesale markets in Guangzhou, Hangzhou, and Shenzhen belong to the primary market, and most of the other provincial capital cities belong to the secondary market. Beijing is special in the secondary market. Its wholesale market is dominated by the Zoo and Dahongmen. With an overall large volume in the past few years, it has been an important transit point from the south to the north. However, in recent years, due to industrial upgrading, most of Beijing’s clothing wholesale market has moved away.

Among all wholesale markets, there are many foreign trade factories in Guangzhou, due to geographical reasons. There are also tens of thousands of large and small factories in Humen around Guangzhou with very large output. The style producing is relatively the fastest, and the quality of clothes is generally guaranteed in the wholesale markets in Guangzhou. There are many markets based on different positioning including Baima, Thirteen Factories, Shahe, Huimei, and Red Cotton. They are also relatively mature and organized in terms of management.

The management of the Shenzhen Nanyou Wholesale Market is also very good. Compared with other wholesale markets, the Nanyou Market is more oriented towards original designs and higher class, while the price is also relatively high. It is generally export-oriented and will designate different processing systems based on the exporting countries.

In addition to Beijing, Shanghai, and Guangdong, basically, clothing wholesale markets exist in the capital cities of all provinces. For example, Qipu Road in Shanghai, Evergreen in Hangzhou, Hankou North in Wuhan, Lotus Pond in Chengdu, Enjoy in Zhengzhou, Wuai in Shenyang, Markwell in Harbin, Machine Station in Xi’an, etc., but the most important markets for clothing trade in the country are the three formulas of Guangzhou, Hangzhou, and Shenzhen. These.

Near Guangzhou, The Humen market in Dongguan is also large in size and belongs to the primary market. There are many product categories in Humen market that mainly focus on processing, and many products are exported to Singapore, Southeast Asia and the United States. The exported products are well finished, especially the ones exported to the United States, Taiwan, and Japan, which are usually subject to strict quality inspection, and product quality is guaranteed. Wholesale markets around Shenzhen deal in more high-end products. Most wholesale markets encompass all kinds of positioning, covering high, middle and low end. Wholesale markets in Guangzhou, in fact, also include different positionings. Various levels are distributed to different buildings, or different floors of the same building, China is a large wholesale country that sells clothing to foreign countries. Not only domestic consumers, but also many foreigners come to the Guangzhou market for products.

The positioning of Evergreen in Hangzhou mostly belongs to the mid-class. The more popular markets are Yifa, Zhongzhou and Jiutian. The products in Yifa are trendy, and most of them are from first-hand manufacturers, with slightly lower price than that of Zhongzhou. Most of them are in stock. The positioning of Jiutian is mainly cashmere with higher price. It is fair to say that Yifa is the most sought-after stall in Hangzhou in recent years with good management and fierce competition. Products in Zhongzhou are mainly European and Korean, and some are from studios. Mostly it is in Korean style, while there are also a few original brands that are developing well.

In addition to the ones mentioned above, there are also many markets in China that, despite not familiar to everyone, are important origins of clothing. For example, there are Tongxiang and Dongguan for knitwear, Xinji Haining for fur, Zhengzhou for women’s trousers, menswear in Changshu, down for Pinghu, denim in Dayong and Xintang, and double-sided wool in Kunshan. And Tongxiang’s cashmere product is also their big advantage– especially in the past two years, it has developed very fast. Merchants in the Jiangsu, Zhejiang and Shanghai like to go to Tongxiang, which produces good double-sided fabrics and sweaters. Although these markets are not large and cannot be categorized as primary markets by scale, they are important sources of clothing production.

There will also be a phenomenon of hyping in these markets, because many hit and hot sells will copy each other. One of the important characteristics of the wholesale market is the focus on volume, so it is fair to say that the overall requirement for design is not high. Some stalls buy designs from abroad, and sometimes Shenzhen, as a base for original clothing designs, is often copied by merchants in Hangzhou. From the perspective of fashion design, there tends to be a gradually weakening sense of fashion from south to north, so it is usually the north that follows the trend of fashion in the south. In the past, this cycle may take up to 1-2 years, but with the advent of the information network era, now it has shrunk greatly. For example, the difference of fashion trend for ladies between North and South is 10-15 days.

Although there are many first-tier wholesale markets in super-first-tier cities, such as Beijing, Shanghai, Guangzhou and Shenzhen, in the future, with the development of scales and industrial upgrades of cities, the wholesale markets in these cities will be gradually marginalized—the clothing processing industry will definitely not be accommodated in first tier cities, so these wholesale markets may shift to the model of ordering.

Operation Mode of Wholesale Market

There are several types of merchants in the wholesale market, including self-producing and selling, production outsourcing, hyping (second tier market), brand ambassador, etc., who focuses are different. However, a large number of merchants in the market copy each other, jeopardizing the environment of original design, and sales are dominated by volume.

Self-producing and selling: Own a processing factory and sell at stalls.

Production outsourcing: Produce designs yourself and place orders for shipment to processing factories, which puts more emphasis on design capabilities.

Hyping (Second-tier market): Take products from other suppliers and resell them to make profit from the difference of prices, which is common in secondary wholesale markets. This model takes advantage on geographic conditions and information asymmetry to make profits—a test for overall capabilities.

Brand ambassador: Represent a certain brand, order and ship from the head office for resale. Unlike the common second-tier market, the design is provided entirely by the head office.

Online wholesale mode: The most famous online wholesaler is 1688. In fact, 1688 can be compared with self-producing and selling, as well as second-tier market. One is the manufacturer’s self-operated shop, and the other is to firstly get the products from the manufacturer and then sell them online; meanwhile, the price is really Cheap. For many stalls that rely on speed and market sensitivity as a selling point, online wholesale provides a faster and wider platform. However, the disadvantage is that the actual fabric is out of touch. Since it is easy to copy from online wholesale products, many manufacturers would not put new and popular products online for wholesale. These popular hit products are often quickly digested offline already. Although the cost is low for online stores, it is necessary to keep promoting to ensure the exposure rate. Real manufacturers do not have so many hit products. And after the online investment is completed, the major customers will go offline. Some merchants that are doing well on 1688 are actually in the secondary market, but once they have really cultivated a customer base, they usually would not like to see their stores overly exposed. Online stores are just a type of sales channel. There are distinct positionings and sales plans for different products. Various e-commerce platforms also have their own positioning, and different products are suitable for different channels at different times. The channels for profitable designs and clearance designs are usually not the same. For example, Y.Sing takes the form of independent design and sales, both online and offline.

In fact, there is no clear-cut boundary between these models, and they are often mixed with each other. For example, some of the second-tier merchants will also order hit products from factories; those who produce and sell themselves will go to other suppliers to get products to supplement their own ones. The emergence of online wholesale will not exert a fundamental impact on the physical wholesale market. After all, physical retail still has its irreplaceable function and charm that online retail cannot replace. The current technology has not yet reached a level where people can have a good experience solely online. Although the technology is getting more and more advanced, it will only boost the physical market to further improve its requirements for quality and service.

Due to the different models in the wholesale market, we need to accumulate experience to get products from the stalls in the wholesale market. For those who are new to the industry, most wholesale markets are still quite confusing. In the wholesale market, it usually requires few sizes for one single design, providing that the single price is almost the same with retail price. It’s easy to get pitted at the beginning. There may be different quality and price in different stalls for the same style. There was an article on Zhihu: someone bought the same garment from Taobao, Tmall, and JD.com for comparison. While they all looked the same, the fabric was still different. For the same design, different platforms have different suppliers and purchase channels, so the quality may be different. Usually Taobao sellers who buy products the wholesale market will go to shops that are exclusive to Taobao. There will usually be signs hanging on the door of this kind of shops—for example, there is a lot of stalls in Shahe Jinma in Guangzhou that are dedicated to Taobao, with lower prices and poorer quality. Other stalls do not want business with Taobao sellers, because they think it will disrupt market prices. The prices of physical wholesale and Taobao are very different, which also applies to the quality of products. Nothing for nothing and very little for a half penny. Competition of price online will definitely affect the quality of materials.

The present and future of the wholesale market

Currently, the first problem for wholesale markets is rising rents. Because the wholesale markets were built in the central areas of cities in the early years, they were generally close to transportation hubs, such as train and bus stations. Therefore, the value of the areas in these years have become unsuitable, and the rising rent has become a major problem. For example, one of the two major clothing markets in Beijing was entirely demolished, and the other was rectified. Wholesale markets in other cities, such as Shanghai and Hangzhou, also face relocation. Physical stores on the street, especially during the previous two years, are not doing well, mainly because there are now more sales channels like WeChat and online stores, etc. Physical chain stores, due to their size and quantity, are doing fine. If it is not a designer shop, a single shop is still difficult to manage, which makes the high rent a great burden.

The second problem is management. Most of the place for wholesale clothing is a mix of good and bad, and the feelings the market gives people are dirty, disordered and bad, often causing problems such as traffic and order. Therefore, many markets are undergoing rectification or relocation.

The third problem is the model. Many merchants in the wholesale market are pursuing hit products. In order to supply in season, they have to gamble to stock up, which puts a lot of pressure on manufacturers.

The fourth problem lies in the shortage of processing resources. Labor for making clothes is becoming increasingly low. The operating cost of places for clothing assemble is also increasing year by year.

Despite this, there will be a market when there is demand. Although the physical wholesale market faces many problems, it will not disappear. Instead, it will respond to market and consumer needs and develop in new trends. What is the future trend of the clothing wholesale market?

The first trend is that as consumer requirements become increasingly high, the demand for design capabilities become gradually higher. In recent years, the life cycle of a single design in the wholesale market is getting shorter. A hit product can be sold for two or three years before, but for now, sometimes it can only be sold for up to a quarter, which requires manufacturers to keep promoting.

Take Hangzhou Yifa as an example. Many merchants originally turned out to be “gambling”—preparing a batch of goods was for a quarter and sometimes rely on luck to see whether it “hits” and “dies”, so many owners ran away a few years ago. There have been some changes in the model over the years. More designs have been used to test, and the fault tolerance rate has increased.

In the future, the requirements for design style and speed are also going up. Design is something very costly. Only merchants that do well in the wholesale market can slowly develop or cooperate with designers to seek common development. Evergreen Wholesale Market is learning from in Shenzhen by putting the original design in front. Now a Yifa original center is newly established, together with M21 opened by Jiutian Group—they both seem to be developing into the showroom mode. Consumers’ spending power has been improved, and domestic products will become increasingly good in the future.

The second trend is the relocation of core areas, which was also mentioned before. Sooner or later, the wholesale market will relocate to the suburbs or surrounding cities, and even move closer to the source as the factory moves.

The third trend is decentralization. Now that the information is getting more and more developed, it will become increasingly difficult to hype. Many long-time practitioners will go to factories for products, and the space of the secondary market will become smaller. It is only possible to save costs by reducing intermediate price difference. For some fast fashion companies, except when they request documentary assistance in China, in any other countries, they would purchase through buyers, who directly communicate with suppliers (may include factories). Now factories are also very versatile, with both design capabilities and foreign trade export capabilities. For example, in Bacheng, Kunshan, factories specialize in the production of woolen coats. Basically, each of them is a family-based workshop. While taking orders for processing, it also deals in wholesale and retail, and cooperating with Taobao sellers as well. After the seller takes a picture of the clothes, the order is shipped directly from the manufacturer, so that Taobao sellers can reduce the amount of stock.

The fourth trend is the labor problem, that is, the problem of processing resources. The rivalry for human processing resources will intensify, and the cost of employment will also increase significantly. In Hangzhou, the average salary of processors has reached more than 10,000 yuan, and the annual income of one couple (husband and wife) is about 180,000 yuan. The workers who make double-sided fabrics are earning 10,000 yuan a month because they need to sew by hand. A video a few days ago shows that more than 2,000 recruiters in Guangzhou lined up in the street, waiting to be picked by the workers. Even if the daily salary has increased to 400 yuan, instead of suitable workers, they could only get green hands. In addition, factory processing is very difficult, and working 12 hours a day is normal. Young people rarely choose to be garment workers because they can’t stand the boring assembly lines. Processing resources will become more and more scarce in the future, and there is also the case that orders from Hangzhou are sent to Anhui, Hubei, and Hunan. Because the cost is too high in Hangzhou, some experienced workers went back to their hometown to open a small processing mill. A lot of wool factories now outsource orders twice or three times, and then 50 or 60 year-old women sew them at home, settling wages with the factory according to the number of pieces. Maybe in the future, artificial intelligence will be used to replace part of the clothing processing, however, the current cost of technology is too high, and profits cannot afford it.

The fifth trend is the trend of singularization of products. Now manufacturers are becoming more devoted, categories are starting to be subdivided, and more emphasis is placed on small scale and refinement, doing something more professional as professionals. In recent years, most of the companies dealing in brand operation in Hangzhou have declined, and single-product companies have begun to rise. More often than not, only by focusing on one thing can we do our best.

The sixth trend is the polarization of high and low-end products. These years, the businesses of some low-class markets are also very popular, since a large number of people who pursue cost-effectiveness in remote areas still exist. But corresponding to this is the consumption upgrade. Manufacturers with good quality will survive well, and there are also many consumers pursuing quality consumption.

With the development of the Chinese economy, the traditional wholesale market is facing the problem of transformation and upgrading, with multiple markets already in the plan of relocation and rectification. The market’s requirements for merchants’ professionalism, originality, and production capacity have also become increasingly high with the improvement of consumption levels. As an important part of clothing sales, the clothing wholesale market is facing many problems today, however, this does not mean that it has reached the end, but instead, it is undergoing a process of elimination and adaptation, as well as upgrading and transformation. The temporary predicament also means the arrival of breakthrough. While the traditional clothing wholesale market seems to be gradually declining, in the long run, it is the beginning of more industrialization, standardization and specialization.

How Far Can the Model of “Buy Designs and Trace Patterns to Produce and Sell” Go? How Should Designers Respond to This Model?

Christine Tsui Fashion Community

How Far Can the Model of “Buy Designs and Trace Patterns to Produce and Sell” Go? How Should Designers Respond to This Model?

Nancy- Shanghai- Designer, etc.

Nancy studied naval architect and marine engineering for her undergraduate degree. She started her career in the apparel industry as a junior. Currently, she works as a designer assistant in a foreign trade company and contributes styles to domestic and foreign brands. With the intern experience at independent designer brand POLLYANNA KEONG, Nancy has a thorough understanding about the style production of independent designers. After graduation, she was engaged in clothing (foreign trade) business. Therefore, she also understands the style production patterns of American and Australian designer brands. After serving at HLA, she also learned about the design production models and current status of large domestic brand companies.

 

The industrial chain in the apparel industry (design-production-sales) is often biased towards the back end, which means that the main industrial model and profit point lie in clothing production and processing, as well as distribution and export. In the initial stage of the clothing industry, low labor costs often make it easier for the clothing industry to benefit from manufacturing and sales. At the same time, however, design research and development, which should have become the core competitiveness of the industry, has not received enough attention, and the role of designers is even more difficult to highlight. Therefore, although China is a big exporter of the world’s clothing industry, it is not strong one. For many years, “low profit and low value” has been looming the industry. Practitioners have worked hard to find a way out, especially for designers.

European and American fashion circles have always been coveting Chinese culture. Met Ball (Charity Ball of the Metropolitan Museum of Art, New York) announced the theme of “China: Flowers in the mirror and the moon’s reflection in the water ” in 2015, which explored the influence of Chinese culture on artistic creation in terms of fashion, clothing, painting, porcelain, art, and movies. This manifests its extreme desire for Chinese culture. But Anna Wintour (the editor-in-chief of “VOGUE” magazine) believes that China has never had its own fashion and real designers. Given that we have been in the stage of plagiarism and imitation, we were never able to cross this threshold.

The entire clothing industry may yet to be sorted out. Some Chinese citizens blindly follow first-tier international brands and pay no attention to domestic brands; some excellent businessmen switch to designers while excellent designers switch to sales, because it is difficult for the brand to survive if there is no profit; there are also some entrepreneurs with designer visions who purchase fashionable and stylistic samples in batches from abroad to trace their patterns for production and sales– low prices with avant-garde styles have won the favor of more consumers. As a result, the position of pattern cutters who have strong ability to trace patterns has far surpassed that of designers in the industry. So, how far can this model of ” buy designs and trace patterns to produce and sell ” go in the future? To know the answer, let’s start with the current status and model of pattern production of domestic womenswear companies.

With the enhancement of national strength, the consumption power of the Chinese people has been improving, so more and more big foreign brands are trying to attract Chinese consumers with the hope of further stimulating this market. While foreign brands are seizing the opportunity to attract this huge consumer market of China, how can domestic brands seize the opportunity? In recent years, more and more domestic designer brands have begun to use the concept of “Guochao” to position themselves with the rise of domestic trends. But at present, most domestic designers and brands have not sufficiently refined the elements of Chinese culture. This is because firstly, fashion in China has only gradually risen since the reform and opening up, developing much later than other European and American countries. Secondly, there are also some consumer factors. In addition, many “Guochaos” are designed by some independent designers. Although the design style is aimed at the niche, the target group is the general public. The design style and target customer group have not been matched up from the beginning, which leads to the fact that it isn’t doing as well as some big foreign brands.

But on the whole, the domestic apparel industry has now entered a period of adjustments. From the general trend of the clothing industry, womenswear is currently developing better than menswear, and at the same time, gender-neutral clothing has become popular. In addition, with the development of Internet technology, the clothing industry is also expanding and transforming to e-commerce networks.

Under the influence of this trend, domestic womenswear brands’ method of style production also indicates the following characteristics:

  1. Design and development stages are not valued;
  2. Domestic designers cannot dig into their culture well and intently;
  3. Methods such as buying designs can directly lead to higher benefits, making it difficult to highlight the value of designs.

The three reasons above directly affect the design production method of domestic womenswear brands.

What is the Design Production Model of Domestic Womenswear Brand Companies?

In the general environment, the model of ” buy designs and trace patterns to produce and sell” has made more and more medium and large brand companies eager to seize the psychology of the mass consumers to gain a place in the market. Here is just an example of the company I worked at, HLA. The company’s womenswear brands include Aiju Rabbit (20-25 years old), OVV (25-35 years old, light luxury), and EXOM, which was previously announced to be dissolved. Each brand has its own team: design director, designer, pattern cutter and assistant designer. However, given the company’s large scale, there are hundreds of suppliers for a single brand, and each supplier has broken their minds to make supply designs for the brand. And this kind of design supply method is, based on the company’s design plan, the supplier travels with the design director or designer to Japan and South Korea, buys sample clothings and traces their patterns directly to profit. Most of the time, the designs are copied exactly from the original fabrics, trimmings, patterns and floral designs. In this case, the brand designer only needs to produce 20% of the patterns– the remaining 80% is assigned by the design director.

In this regard, my biggest doubt is that since the company has paid a lot of money for foreign planning teams to make a detailed trend analysis, why is the entire brand still applying this mode of operation? At that time, my company usually developed summer styles in August to October for May-July next year, autumn styles in November to January for August- October next year, winter styles in February to May for November-January next year, and spring styles in June to July for February – April next year. Of course, some supplements will be adjusted in due course. This development time is reasonable enough for designers to design independently, but due to the brand’s need for better market acceptance, that is, a good sales rate, design directors would still choose to ” buy designs and trace patterns to produce and sell.” And the pattern production mode of other domestic large and medium-sized clothing brand companies is also basically looking at the market for trends, and then choosing images that match the theme based on plans. After all, it is still copying from the market. In this model, how to increase the hit rate of style production and boost the brand’s sales rate?

First and foremost, the control of design time. The main control lies in the design director, followed by the designer, and finally the assistant designer. Every week /month, produce styles according to the assigned task of “color system, profile, printing and embroidery”, and report in time to the superior. This requires designers to improve the hit rate of their styles, that is, “how to quickly and accurately grasp the core of each quarter.” Secondly, the source of new designs. Most companies choose to copy mainly because the design director does not trust the designer, or the styles the designer produces is unable to adapt to the market. The fundamental reason is that the designer lacks an understanding to the complex structure of the industry. This also requires that the designer pays attention to accumulating styles. When seeing a good style (overall or structure of some parts), he or she can communicate with the pattern maker. Through this long-term discussion mode, designers cultivate a strong ability of structure association, and lay a solid foundation for producing styles on their own in the future.

Taking EXOM as an Example

EXOM is a light luxury brand established by HLA in July 2017. Taking “post-80s” as the dominant market, the brand anchors consumer psychology as ” the taste of CELINE with a budget of COS”, that is, “practical + selective “.

The following image is an overview of the womenswear market:

屏幕快照 2020-03-02 下午11.28.40(Source:  EXOM brand forerunner)

From the picture above, we know that the brand’s positioning in the early stage is very accurate, but in the process of fashion development, the brand designer failed to bring personal style or blend it with other styles, therefore, the ” buy designs and trace patterns to produce and sell” model has been followed, making the look of final products too similar to the overall style of Aiju Rabbit—this deviates it from the original brand positioning, so it was eventually dissolved (certainly, this also involves internal decision-making).

From this we can conclude that “buy designs and trace patterns to produce and sell” can quickly gain a group of consumers in a certain period of time, but the long-term plagiarism will make it impossible for the original brand story to keep a foothold, and consumers will not be able to form enough loyalty /reliance.

If a company only wants to profit without good products, with the increasing of homogenization of clothing, indistinctive products will inevitably be eliminated by the market. This brand positioning layout and style production model may be able to develop well in the beginning, but the vitality is not long enough. This situation is becoming increasingly conspicuous in the women’s clothing industry. Not only EXOM, but also well-known brands such as SANDRO and MAJE are becoming more pupularized.

The Impact of E-commerce (Internet Celebrity) Brands

The e-commerce (Internet celebrity) brand was also the first to get a response from consumers through the ” buy designs and trace patterns to produce and sell” model. For example, independent e-commerce brands with a sense of design, such as ROSE LING LING and FANO STUDIO are generally based on Japanese and Korean niche brands (RECTO, PAUL & ALICE, SOONSU, etc.). They copy the patterns directly or make slight adjustments. They release new products very fast — usually once the referenced brand releases new styles, they are able to produce copies within 7-10 days, and many medium and large branded companies will take these as styles for the next year, which makes them obviously lag behind these e-commerce brands and lose a number of trend followers to a large extent.

In this regard, how can brands provide more novel designs? How do designers change designs? In terms of my personal habits, first of all, designers should classify materials in their daily life:

  1. Save them based on the categories of collar, shoulders, sleeves, waist, and hem, so that you can use these elements when you see the appropriate shape in the future.
  2. The daily aesthetic accumulation cannot be missed–“What kind of silhouette can be used for what elements, whether the overall style is coherent”– these are the long-term accumulation process.

In the Internet era, the speed of information dissemination is fast, which makes all online celebrity stores look the same—it doesn’t make much difference between visiting a few stores and visiting only one. Previously, an Internet celebrity copied the designs of Chictopia, and there were even a lot of people applauding for it under Weibo. It can be seen that the domestic awareness of copyright in clothing design is still weak. Focusing on operation instead of design, they only take clothing as an item to profit without idea input. Big brands are also just copying competitive products to avoid mistakes. There are a number of small brands that engage in pre-sale models, ordering products based on market response. Consumers also only pay attention to the appearance rather than the feelings of the actual fabric and wearing experience. All these factors further catalyze the severe plagirism of the market, and a large number of brands distribute products to occupy the market, leading to the following characteristics in the majority of e-commerce online brands:

  1. The product is invalid, and the quality of the fabric of the garment does not meet the standard;
  2. The design is not flattering;
  3. Poor intellectual property protection and brands copy each other;
  4. Limited publicity and promotion are overly dependent on the fan base.

Clothing has to firstly be flattering and comfortable, and it is also important to reflect the taste, interest, identity, status and other people’s sense of recognition, but the most important factor is the quality.

Survival Situation of Independent Designers

“The real situation of domestic independent designers is that they are not able to find good fabric, factories and stable customers.” Young designers tend to operate personal brands, but the establishment of a new brand is not easy: funding for designs, establishing a studio, hiring employees, promotion and sales all need to be done by hand.

In addition, there is often a huge gap in aesthetics between independent designers and ordinary consumers. Designers’ creativity pays so little attention to the market that it is hardly accepted. Certainly, in the past two years, the impact of the Internet (the promotion of clothing e-commerce platforms, the recording of designer competitions and the brand effect of celebrities) has pushed more independent designer brands to the forward position. More post-90s generations are willing to pay for these distinctive styles.

In 2015, I have interned at POLLYANNA KEONG, which was famous for its color schemes and floral designs. The sales channels back then include D2C, Shangpin, Netease and other e-commerce platforms, which were similar to Taobao; following these were the artist’s brand effect. At that time, the brand had cooperated with YIGUE (Shanghai Yigue Clothing Co., Ltd.). In terms of the given color scheme from large companies, independent designers were not able to submit works that were satisfactory to each other: Independent designers had to reduce many avant-garde elements of their brands to cater to the market and constantly adjust trends and elements into something easily acceptable– this kind of running-in is a severe torment for many young independent designer brands. Although the runway shows were glorious, the sales rate later became a concern for designers and companies.

Some people think that independent designer brands can ensure the coordination to a great extent. Designers can easily master the personal brand and do not need to cater to the mass market all the time, which is why a lot of recent graduates are more willing to open a personal studio. In this regard, I will still take POLLYANNA KEONG as an example. One thing I admire about POLLYANNA KEONG is that designers never buy patterns or copy deesigns. Many independent designer brands basically give designers their heads without limiting the way designers think. This includes AWAYLEE, with which we had a cooperation–their team will not buy patterns and copy designs, and will give designers a sufficient development cycle (6-7 months), consistently communicate with the pattern makers to produce the appropriate version. I remember when I was producing styles for POLLYANNA KEONG three years ago, whenever I told the design director which pictures I referenced for my styles, she could get my points quickly, and I would also give her design drawings as soon as possible. But then when I went to other companies to produce styles, I had to find pictures fully approved by the design director. She accepted neither my description, nor my design or effect drawings. She will only allow us to develop them when the pictures we found suited the styles she wanted.

Nevertheless, from 2015 to 2017, POLLYANNA KEONG also needed to continuously update the styles of each quarter and invest in several artists at the same time. If it weren’t for Wang Ziwen who wore a few outfits from the brand in the TV series Ode to Joy, it would be difficult for the brand to usher in its renaissance. But the cost for designers to invest in artists is still huge.

Therefore, for young designers who have just graduated, I recommend working in companies for a while. Only start considering operating your own brand after you have gained control over the brand and market and known the techniques of fabrics and trimmings. While designers are mostly sentimental, profiting means to be able to sell good products and designs. But original designers and independent designers often lack marketing awareness, as well as elements for sales and business. To achieve a combination of sensibility and rationality, designers still lack teams, funds, channels, packaging, rational business thinking, a fully coordinated supply chain, etc., which is why they need business partners. For example, in Mukzin model, the husband is responsible for business and the wife takes care of design and supply chain. However, the reason why most independent designers or design directors are reluctant to find partners is that only few people can resonate with their styles and ideals. Certainly, some independent designer brands have design teams, so all the design director needs to do is control the overall style of the brand. But in any case, what we need to understand is that from the perspective of brand development, the key does not lie the temporary design, but rather the continuity and change; and in terms of current management, the requirements of funding background and the founder’s social connection to establish a brand are too high; it is not easy to found a brand. Many original designers evolve into brands by starting from wholesale OEM for profits, such as NGAN LOK International. Its products have developed from wholesale OEM to brand, and then returned to the market for wholesale business based the development of the brand. In its zenith, it has even developed a team of foreign designers with a scale of hundreds of entities.

What Should Designers Do if They Don’t Start Their Own Brands?

New graduates to the company always complain about the tedious design work in terms of the choice of fabrics, decision of styles, printing and embroidery, techniques, patterns and modification, etc. In fact, these are basically the same as graduation designs, and it is not that complicated. The daily accumulated experience during work is a valuable asset in the future. What we should do is categorize and summarize. So how do we overcome this impetuous mentality?

When I was doing translation for customers’ design reviews in clothing business, I often thought about issues of patterns. This was also the foundations for being able to give accurate opinions on some basic patterns when I went to HLA.  Carrying it onto the current design works, I can analyze the accurate structures better and give them to pattern makers, which facilitates the entire operation.

In the industry, design is not just a process of drawing–there is a lot more to know. Many domestic design graduates find it difficult when they start working for companies. This is also because they focus on the study of theoretical knowledge while they have too little practical experience. For example, fabric selection is a big issue. Many designers who just entered society don’t know much about features of fabrics. The main cause is that they did not go to fabric markets frequently, and neither did they design a lot. In addition, they did not do sufficient summary, which directly affects the speed of style production, leveling up difficulties.

As designers, when we are designing, not only do we need to have knowledge about fabric, but also comprehensively consider factors such as technique and pattern.  Stop pattern designers from saying “What’s good with designers? Aren’t they just copying designs/ how can you miss the core when all you do is copy” over and over again, which make both parties embarrassed. In fact, as long as you set your mind on it, whether you are sorting orders, fabrics, techniques, designs or other relevant work, you will be able to summarize a lot of design-related experience. Working in a brand company is still very helpful for the future profession or career development of most people. It is completely different from factories and wholesale industries, and the improvement you obtained is also multi-dimensional. For example, there will be technical directors in brand companies, from whom you can learn a lot in terms of batch and silhouette patterns. For companies and brands, designs are good only when they sell well and have reasonably flattering and new elements. It is not sufficient for designers to only understand aesthetics; what’s more important is to keep up with the market and try to go ahead of it. Work hard on basics during school education, and attentively accumulate knowledge in society. Learning is a lifelong matter, and you will always be rewarded through slow accumulations.

Certainly, some people feel that it is difficult to fulfill their great aspirations, and that the brand concept is inconsistent with their own design concepts. The expectations of producing clothes based on their own wills as an independent designer means that they are yet to understand the reality of the market. Many times, when the garments they developed themselves are negated by the design director, they should have known that the denials from consumer will be even more cruel. What we should do is to find out the market needs, consumers’ psychology and consumption habits, and then integrate fashion elements into designs to instill them in consumers. It is only appropriate to say that “ It’s a more robust step into an independent designer” when you have the ability to produce a collection, know what designs sell well and how to add novel elements. Only when I was working at HLA did I learn what a market is and realize that design itself isn’t a wild card. When I was able to face the sales rate of each season with composure, I knew that I can adapt to the design environment. But if you are determined to be an independent designer, you need to go to companies for practice, which, on the other hand, shouldn’t take too long, so as to avoid stylization and deterioration of personal style.

Some designers who haven’t graduated for a long time find it difficult to take the road of design, so they would say “I’m going to be a buyer.” However, if they can’t even do basic designer works, to a large extent, they are not professional enough to be a buyer.

Although buyer has been very popular these years and many domestic womenswear brands have set up this position, do you really meet the professional requirements of a buyer? Can you grasp the overall style of the brand and properly guide the designer to the trends that suit your brand? The company’s budget is also limited. If you buy 100 styles and only 10 are selected, it will definitely doubt your vision and aesthetics. Designers will also question your decisions when they fail to produce in required quality and time. What are the main job responsibilities of a buyer?

  1. Pay attention to fashion trends, major fashion shows and magazines. Collect fashion information and pictures, have a keen sense on trends, and able to quickly and accurately find hotspots; make annual seasonal purchase plans based on sales plans; Formulate the Power Point for next quarter’s fashion trend, including popular elements, colors, silhouettes, structures, fabrics, patterns, etc., as a reference for designers’ storyboards.
  2. Analyze slow-moving inventory. Analyze the data of best-selling and slow-selling products, understand the consumption and economic levels of different regions; Analyze sales data in previous years and predict future markets;
  3. Visit wholesale markets, department stores, foreign trade markets to collect information and market news; Visit stores regularly to learn about consumer trends and after-sale responses; Understand the strengths and weaknesses of the brand and familiarize with the product status of neighboring brands.
  4. Communicate with designers regularly, provide fashion trend apps, transmit market trends and fashion news and provide designers with reference opinions; Assist designers to modify the look of sample clothing — silhouette, color, fabric, pattern, technique, etc.
  5. Communicate with the product manager and select competitive products; decide the proportion, quantity, quality requirements, price, cost, production cycle and products on posters. Follow up the production progress, supervise the delivery period of the finished product and ensure that the products are listed on time and wave band; Assist the production department with quality inspection and acceptance, and ensure the quality of the listed products.
  6. Master the positioning, characteristics, selling points, precautions, display, product allocation and distribution of new products on the market. Convey sales skills and brand value to retail staff in the marketing department through training and store manager meetings.
  7. The Operational buyer needs to be responsible for the adjustment, merge, and return of the goods in assigned or other areas; assist the district chief in the management of the products and display of single stores; independently complete ordering for the single store.

At the same time, as a buyer, you also need to be responsible for the suppliers from which you purchase, so that they will not be pitted by your company; in addition, encourage them to produce better products while facilitating their development under certain conditions. A buyer is also responsible to consumers in terms of avoiding misleading their consumption and aesthetic concepts; Be responsible for the impression of your own brand– leaders may not always be right, so have the courage to question them and provide reasonable advices and reserved suggestions for the products you prefer. Bravely put forward your views based on your own trend analysis without justifying fake data and finding excuses for the data; Meanwhile, calmly analyze the truth behind the data. At the same time, buyer also has to coordinate various departments and play a pivotal role that is not biased towards anyone which will affect correct decisions.

Based on the points above, I think that only if you have laid a solid foundation–familiarity with the characteristics of fabrics and trimmings, techniques and patterns, as well as an accurate grasp of the overall style of the brand and the trend of each quarter, together with a consistent effort to improve your aesthetics, will you be able to achieve qualitative mutations.

For young designers who have just graduated or only graduated a short time, they should start with themselves. It is feasible to learn from the big names; learn to find the benchmarks of the brand, grasp the brand style, and learn to assemble products first—draw analogy between designs with similar styles, and add in creative elements to form a harmonious and unified series style. It is only in this way of adding in personal elements gradually that a personal style can take its form in the in the long-term development of designs.  This also prevents the dilemma of “no one pays for the products” when the personal brand is established in the future.

In addition, personally, I also recommend that graduates work for companies. It is true that they can accumulate more experience during work, whether it is fabric and trimming or pattern and technique, they are all beneficial for future designs. The most important thing is to cultivate your own design ability, learn to follow the plan and extract the elements, silhouettes and colors that are suitable for your brand from each season’s fashion trends, and gain better understandings of the entire market (each large company has a corresponding sales rate analysis, which designers can view on a weekly or monthly basis; it is also suggested to see which styles are more popular in stores). Only when you have the ability to think independently can you claim that you can integrate ideas into your work and present them to the public, which entails years of experience.

Certainly, as natives who understand and are able to do design, should we dig more into our own culture? Incorporate it into personal design and bring Chinese cultural heritage to influence the world. After all, so many designers in the fashion industry attempt to dig into Chinese culture without any results. Therefore, in the future, we can also focus on the “display of Chinese cultural heritage”. The fastest and most concise way is to do more research on brands that display traditional cultural concepts, such as: Icicle, Shangxia, and Muzkin, etc., and understand how the brands’ new seasons are closely related to the conceptions of the brands.

At the same time, I also hope that design directors with certain experience will truly respect design and guide new generations designers to find their own potential, instead of simply serving the company, only considering profit, which deteriorates the basic sense of beauty and original intention.

Success Conditions and Profit Models of Designer Brands at Different Stages of Development

Christine Tsui Fashion Community

Success Conditions and Profit Models of Designer Brands at Different Stages of Development

Fang Qi et al.

International Economics and Trade student. Loves fashion design and everything related to the expression of attitude and beauty. Used to work as an intern editor at Haibao and aspired to become a fashion designer.

FOREWORD

At the initial stage when the brand is established, the fund is limited, the team is small, supply chains are inadequate, operating experience is insufficient, sales channels are limited, and promotion efforts is inefficient. Given the limited resources in all aspects, which ones should designer brands focus on? To avoid excessive trial and error costs, what else should be avoided?

Success Cases of Independent Designers

Designer Studio (preferably with OEM capability.  Those without OEM production capacity can only sell patterns, which makes life not easy).

As far as I know, many domestic fast fashion brands in the third and fourth tier markets are willing to cooperate with design studios. As long as the products they design are marketable and trendy, and the taste is also a little higher than that of the general market, it will be very popular.

If the price from the designer can meet the customer’s price system, it is also possible for customers to place an order containing up to several tens of thousands of pieces. For example, although many design studios in Guangzhou are not famous, they are operating well based on this model. Such a studio often only requires a few people. The starting capital of 300,000-400,000 yuan would be enough, and it is normal for the profit to be a few million yuan a year. Certainly, it requires the designer to have a good understanding of the market to achieve this.

Open the Stall

I have a friend– a girl from Hubei, who has three or four years of design experience, but the performance in the company is average. A few years ago, she went to Shahe Market alone with 100,000 yuan to get a small stall for sweater wholesale. Through her own efforts, she has earned more than 2 million in two years, and the inventory is very small! Her method of operation is different from that of unprofessional small stall owners. Through her own vision and design ability, she has differentiated her product from that of the market product while remaining marketable. Although she started from imitation, she has gradually found her own style from it.

For your reference, the two ways above are what I see to be profitable as an independent designer.  As for the designers’ insistence on their own aesthetics, as long as they have a certain profitability, dreams will be relatively easy to achieve.

What Issues Should Designers Face When Their Brands Are Founded?

Supply Chain 

Designers should firstly position their own style and customer base. Apply the experimental model of multiple styles with a small amount– but this also requires supply chain support. Put profit before development and leave ideals aside at first. Nowadays, many designers are too idealistic.

From the perspective of channels, if feedbacks can be obtained online, thereby orders can be generated as soon as possible, and orders can be issued in the fastest fashion, then it is always mostly accepted among the consumer groups. If the market feedback is good, extra orders should be immediately placed to the factory, which is an operation model with the lowest cost.

Production volume and minimal fabric order are the pain points of most Chinese designers in the production supply chain. The designer Ban Xiaoxue once said, “Most of the high-quality factories in China are of large scale that require large volume as support, which is a very realistic problem. We also encountered this difficulty in the early stages. The solution It is to reduce the colors of clothing or design multiple styles with the same fabric. ” Therefore, reducing the colors of clothing or designing multiple styles with the same fabric is one method.

For most designer brands, it is more realistic to not cooperate with large factories at first, but with small processing factories and workshops instead. Factories in Shenzhen Nanyou accept orders of dozens or twenties, and it is also possible to achieve long-term cooperation. However, to ensure quality, designers should go to the scene to supervise. For designer brands, production is not a fatal problem. Many workshop-type processing plants around China Textile University are shipping quickly, which can meet the demand of multiple styles in small amounts. However, in the early stage, factory workmanship is a bit tricky. For example, running-in stage is sometimes unavoidable when it comes to the cooperation with printing and embroidery factories, due to the difficulty of the process. This situation can be improved after the smooth cooperation in the later stage.It is more important for designer brands to pay attention to the penetration into sales channels. If you only do online promotion, it is likely to be buried in the sea of Taobao, therefore, offline customers are still needed. Promotion is very important.

Sales Channels

As a relatively successful domestic designer brand, Ban Xiaoxue initially relied on buyer channels, but accepted investment over a period of time. The pre-investor is a shareholder of a domestic market-oriented design brand.

Will designers still choose online platforms if there is no capital injection? If we start from scratch, what is the better way to lay out the brand’s first channel? The answer given by most people in the industry may be unexpected: designers should start with the wholesale market first (if there is a lack of funds). The wholesale market runs faster in terms of quantity, has an advantage in location, and can also be quickly seen by more wholesale customers, which is conducive to rapid dissemination, hence a larger chance of survival and faster return of funds at the early stage.

In terms of domestic wholesale market distribution, the primary markets are in Shenzhen and Guangzhou. The secondary wholesale markets are mainly Hangzhou, Beijing, and other provincial capitals, such as Shenyang and Chengdu. Then there are markets in other cities and physical retail stores available for sale. The wholesale market is also hierarchical. For designer brands, if the product quality and positioning are not low, it is required to choose a more unique and personalized wholesale stall. Otherwise, stalls with poor quality or severely homogenized products will make the products prone to be drown in the market. Most of the designer brands in the wholesale market cooperate with wholesale stalls of a certain quality. Some designers just go to wholesale stalls with their own products and ask the owners, “I have this in stock. How should we separate the profit if we sell it in your store?”

Therefore, in the early stage, brands can also dig the first bucket of gold through wholesale markets, and then operate the brand. It is unnecessary to settle everything all in one step. For start-up brands, it is difficult to promote without money; we can develop the styles we are good at when there is money. If products are not sold, the brand may not survive the early stages. Each period, some designer brands will “die”, and some will transform successfully. There are also many brands in the market that started out in the wholesale market and then transformed, such as MO & CO and Girdear. This approach is worth trying for brands with little fund in the early stage.

But many people are doubtful with regards to designer brands taking the wholesale market channel. Is it difficult for brands starting with wholesale market to develop into high-end in the future? Is it difficult for designers selling products at wholesale market to transform in the future? Many people believe that in this case, there is a greater possibility of transformation even if it starts from Taobao–after all, it is “small and beautiful”. Indeed, there might be no advantage for some designer brands to go for the wholesale market—due to the small volume, the fabrics they get are the most expensive ones, and at the same time, the processing fees are expensive as well. In addition to the design cost, for a small batch of clothes, 30 pieces of basic dresses cost at least 150 yuan per piece, let alone other more complicated designs. Therefore, designer brands with high prices and positioning will definitely not be able to go for the wholesale market, unless they can expand volume from the beginning. But for most start-up brands, whether to choose the wholesale market depends on the brand’s development goals (does the brand have stronger commercial attributes, or more emphasis on design attributes?). Wholesale is more oriented towards commercial development and focuses on the market. At this stage, brand design and brand philosophy can hardly become the focus of development. If it is a new brand with medium or high price, it is better to go for brand collection store and showroom from the beginning.

In addition, in terms of offline, we can also open our own wholesale outlets, or cooperate with platforms such as Showroom, both of which are currently channels with large volume. Start-up brands can find more opportunities for cooperation by participating in exhibitions and markets. In addition, based on the characteristics of the category, such as women’s clothing, we can also choose malls with high mobility to test the water.

As a designer brand, first of all, the product has to hold water– starting from one customer, accumulate it slowly, and then look at developments. Designer brands also have to go through a process of cocooning. Certainly, it should be easier if we have this kind of customer base in the beginning, which is actually true for all brands. In addition, the association of designer brands and wholesale stalls is a good way to both reduce the price of fabrics and allow us for free cash flow. Joint operation with stalls can be achieved through the combination of our own designs and combinatorial products.

How to solve the initial funding problem?

The initial funding mostly comes from the following three sources:

  1. Internal funds (accumulation or family support);
  2. Raised funds from yourself and partners;
  3. Investors. These three sources have different requirements for designers themselves. Investors in the market rarely invest in pure designs; they are usually more interested in new designs.

But due to the large market, currently, design entrepreneurs can barely succeed without investors. The clothing industry is a field that can only generate returns when there is investment. But investors usually don’t like to invest in the clothing industry, which is normal because the industry’s relative returns are low. What investors like are brands with multiple returns or those that can be harvested. If there is no investment in the initial period, then invest yourself and start with small volume. There are also brands that start with a small amount of 20 pieces and manage their own business step by step.

If you can find investment, still remain cautious– most investors only aim at making money, which tends to generalize the brand. Designer brands need to be selective, and as a designer brand, determination and adherence to their own brand core and design philosophy is a must. Since most investors want faster returns, in order to pursue some profits, they naturally abandon some of the brand’s originalities, resulting in an altered brand taste. In lots of cases, investment does not rely on the design itself, but rather the business models and channels, as well as the overall team and philosophy. The way we look at the clothing industry is sometimes too erratic; in fact, the biggest “investor” is the development based on the known and unknown needs of customers. In general, in order for a designer brand to find proper investment, its product must have a soul and attractiveness before someone invests.

 How to Serve Customers Well If You Own a Physical Store Yourself?

Consumer preferences for physical stores depend on the focus of their preferences. The preferences of people from different regions, ages, education backgrounds, and genders may differ. Some consumers pay attention to the furnishings in the store and like to visit those that provide collocations for different occasions. Some consumers, on the other hand, prefer a more open and autonomous environment. Rather than being followed by shop assistants, they expect a higher degree of freedom in stores. If the customer has an inquiry, shop assistants can also respond in time, or provide professional matching references on request.

As a designer brand, in order to be differentiated from ordinary clothing stores, there should be matching accessories, bags, etc. at the shopping area. Bookstores and homewares can be added to stores that reflect lifestyle. If customers can feel a sense of home through the scene, decoration, and products of the store, the concept that the store wants to convey can be better reflected.

With the increasing spending power of the post-90s generations, modern and fashionable shops have gradually become popular with consumers. But shops should be plentiful without being cluttered. In recent years, more and more malls and shops have also applied the concept of exhibitions for the display and decoration of shops, which is more artistic and is popular among many avant-garde consumers.

As for the student group, they may prefer seasonal shopping, and generally give priority to the seasonal items between the price range of 100-500 yuan. For example, sweaters in spring with prices between 100-300 yuan, and windbreaker or baseball shirt between 300- 600 yuan are acceptable, most of which are fast fashion brands. But many a time, if they find that the quality of the clothes is not good, they may turn to the Internet based on style. Therefore, when student is the main consumer group, the position of the store should not be remote—they will only go there for shopping when the surroundings are popular. However, the style positioning of the store should have its own characteristics, and it is best to have category divisions in the store.

Finally, a very open question– what kind of designer brand do you think is successful?

This question is important for all designer brands. What kind of brand can be called a successful designer brand?

We can view it from several different perspectives:

  1. The design is based on the designer’s root self (about the designer’s happiness).
  2. Profitable and able to achieve sustainable development.
  3. There is a stable pursuit group.

It is necessary that brands achieve profitability. As a designer brand, it needs to balance the relationship between design and the market, develop its own characteristics, and build its own circle and community from niche consumers, so as to gain more recognition. Every designer’s understanding of success may be different, but maintaining their own personality and style while getting positive feedback in the market is actually a success of the brand. If you can convey your own brand attitude to consumers, it is one step further. Fundamentally, adhering to the core and original heart of the brand while meeting consumer needs and having its own consumer group is creating value; in addition, realizing self-worth and achieving a balance between profitability and design can manifest that the designer’s philosophy is accepted by the market, and the brand has succeeded.

Case: Entrepreneurship Shared by Designer Alex

@ 1995nyc-New York-Designer:

I started a business while I was in college, and the brand started more than half a year. The main distribution channels are the online official website in USA, STYLEWE, Taobao Linglong in China, WeChat Moments, and two offline shoppers. In the early stage, there was limited fund which was just enough to make one series, and we had to borrow money. The current situation is that the income can maintain the next collection of small batches of products and samples without personal income. There is no investment at present, because I haven’t met like-minded investors–most domestic investors are eager to make profits, and while they want a large proportion, they are unwilling to invest a lot.

Problems Encountered in Brand Startup Development:

  1. Without large funds, it is difficult to find promotors in China for online promotion, making it difficult to be recognized.
  2. The cost of communication with domestic factories and transportation is higher when you are abroad.
  3. Due to absence domestically, I haven’t found a wholesale platform with long-term cooperation and direct order.

Aspirations for the Future:

  1. Make profits first.
  2. Establish a flagship store—I would like to forge a space with brand features and landmark. Instead of merely providing shopping places, it is more like an art museum.
  3. Support emerging artists and make exciting cross-border collections. In fact, we are working hard on it now–we have already made a short fashion movie, and we are planning the next movie now.
  4. Develop new fabrics with current technology.

In my personal experience, at the early stage of development, it is easier for people to remember the brand when it has a distinctive design. Our sweaters feature very bright color patchwork instead of basic models, so they are very popular.

Wang Tianmo, a domestic designer brand, is very strategic. She makes full use of social media platforms to share her daily life and design,  and she publicizes her WeChat account to allow her fans to be closer to her, rather than being superior and aloof. In fact, it is not top-notch in terms of its design style and products, but the market strategies are good. This is what designers should pay attention to when developing a brand—learning to market. Some designers think that designer brands should follow the high-end line, but in my opinion, this form of Wechat Moments can also be taken. Maybe some people feel that the form of Wechat advertising will be annoying, which is what I never do as well. I would usually share some comments and feelings about the recent exhibitions, movies, books, and costumes on Wechat Moments. When sharing articles, I summarize and talk about my views. This will give an impression that as an independent individual, my existence is valuable, and then from time to time, if there are pretty buyer shows and photos, I would post them. I improve the quality of pictures, so people often comment that they would buy them. Therefore, there are different methods with regards to distinct channels. Instead of to adhering rigidly to one of them, all profitable methods are worth trying.

Whether it is a brand that has already emerged in the industry or a designer struggling in the early stages of entrepreneurship, to become a relatively successful designer brand, it is necessary to have a sincere love for design, a strong belief in the dream of building a brand, as well as years of accumulation and persistence in this industry. Words like “dream” and “passion” sound very far away, but they are indeed the oringin of everything.

Everyone may have their own definitions of “success” for a designer brand. As a friend in the group said: “Everyone has his or her own idealism.” I personally believe that a successful designer brand requires more than satisfying these conditions— to put it another way, although important, they are not the priority. What is more important for successful designer brands is that the designers should constantly express their attitude, manifest the spirit, and narrate their souls through their work. In this process, reveal observations and ideas about the world through works to resonate with consumers and the market. Obtaining a group of loyal consumers who can understand its spiritual connotation and endorse its brand culture through these is the most essential success for designer brands.