The Development Of Domestic Brand Apparel Industry Has Entered A "Fragmented Era".

Over the past ten years, the domestic garment industry has achieved rapid development by extension and product price increase. In the future, with these two driving forces weakened, industry growth will be more dependent on the same store growth brought by volume increase, and the industry growth will go down to a "medium speed development period". According to international experience, the growth of same store will be characterized by two stages: first and then slow. At present, domestic same store growth is still in its infancy, and the growth of central 10% is expected to be achieved.

We believe that the important feature of the industry's "medium speed development period" is the continuous fragmentation of demand, which is mainly manifested in two aspects: products and channels. The former refers to the more and more obvious consumers' demand for personalized and differentiated clothing, and the rapid development of the brand with distinctive positioning and obvious product personalization; the latter refers to the rapid development of consumer purchasing channels (such as shopping centers, e-commerce, purchasing agents and other emerging channels), and the way of obtaining commodity information is increasingly diversified.

　　 " Fragment Era "Reconstruction of value chain, impact on industry concentration and profitability."

Demand fragmentation leads to value chain reconstruction. In order to catch consumers' repeated and varied demand, the brand value chain structure of the brand is changed, streamlining the circulation and directly facing the terminal consumers. Because of historical reasons, the secondary value transfer to retailers (the franchisee), the main way includes terminal management output, and reducing the discount of franchisees. Fragmentation of demand impacts industry concentration, and market share of leading enterprises is challenged. Women's clothing, fashion, leisure and personal needs are high. Women's Shoes The fragmentation degree is higher and the impact is larger. For example, the concentration of the American casual wear market has declined slowly since 2000, and the leading brand market share has dropped significantly.

Fragmentation era, the profitability of the industry evolution: comprehensive domestic clothing prices difficult to upgrade, industry value chain reconstruction accounted for a steady increase in two aspects, judging the long-term gross margin of industry will remain stable, and based on the comparison of Chinese and foreign brands and the rigid growth of costs, that the industry net profit margin will slow down, as to when and where the level of stability depends on the industry's competitive pattern again.

　　 The age of fragmentation: Traditional clothing Repositioning of brand products and channels

In view of the different driving factors of growth, we divide the clothing brands into two categories: one kind of leisure class, the other is business volume, and the other is the pursuit of added value of products. The core driving force of leisure growth is the rapid turnover of products. Demand fragmentation has opened up the era of big data. Two types of enterprises (ZARA, H&M, and the positioning market of the head office) have emerged. Domestic brands should seek the balance between product and quantity, build the best product mix, actively seek new models, and achieve the integration of two major channels, such as the O2O mode. We are optimistic about the early positioning and the leading position of the two positioning channels and products. Although these measures are difficult to transform into short-term performance, they are expected to win in the long term competition. The core growth power of business class is to increase the added value of products. The market share of mature market business leaders is still improving, and the continuous improvement of profitability is the key to brand upgrading. We believe that those enterprises who will continue to upgrade through the continuous upgrading of their own brands across the overall profit margins will become the leading brand in the field of business clothes. In addition, the positioning of mid business business clothing brands can pay close attention to market share, and appropriately introduce the business concept of "casual" clothing.

In the long run, collectivization operations are expected to achieve large market capitalization in response to demand fragmentation. The international experience shows that collectivization is the commonality of large market capitalization companies. In the short term, there are many obstacles to the operation of the domestic brand apparel enterprise group. However, the fragmentation of demand and the existence of the ceiling of the single brand market capacity decide that the collectivization operation on the basis of multi brands is an important strategic choice for the enterprise to become bigger and stronger in the future. In the future, the competition pattern of the industry is stable, and mergers and acquisitions are the first choice. The successful experience of VF acquisition includes the construction of multi brand matrix of "golden ox" and "Star", effective integration and stable professional management team.