Tiger Pro Note:

Last Friday, Tiger Sniff held a closed-door meeting to discuss clothing downstairs, if you pay attention Not long ago, you should know that this is our first Tiger Pro Member Day < / a> event, a closed-door communication event for small industries with less than 20 people, we invited Li Jing, a partner of Zhongding Capital, Liu Xiaolu, the founder of underwear home lifestyle brand NEIWAI, and Ma, the founder of sportswear brand Sumday. Hui Juan, co-founder of Light Chain, Zhou Dong, and co-founder of Yipin Tiancheng, Jiang Fan, are more Tiger Sniff Pro members , practitioners and interested observers in the apparel industry.

Three hours of sharing and chatting, naturally there are chats and materials, and everyone’s opinions on the scene are still endless. Because it is a closed-door meeting, we will only sort out some of the contents of the on-site discussion as follows. You know, the details and wonderfulness of the scene can only be experienced by your next participation. Follow Tiger Pro member WeChat public account , get the event the first time Notice, grab tickets to occupy seats.

Enter the topic below.

It is easy and difficult for the clothing industry to grow a small business, why?

If you can see if a business model can be bigger, it depends on whether its entropy increases rapidly with the growth of the company’s size. The overall entropy of the clothing industry is very large. Whether it is viewed from the B-side or the C-side, there is huge entropy.

From the perspective of C, there are two characteristics of making clothing, one is trendy and the other is personalization. These two words are very scary for those who are doing consumer goods. Speaking of personalization, when I drink Maotai, it will drive people around me to drink Maotai, so its products can quickly change with the crowd, and then its horizontal is a large scale at the crowd level, but the clothing is When this style is used, I will drive people around me not to wear this style, and the network effect formed is basically negative. Trendy means that its cumulative effect is also negative, the more you wear a dress, the more you don’t want to wear it.

Everyone who does clothing research knows that there is a typical impossible triangle in the clothing industry. From a financial perspective, your three indicators of income, profit and cash flow are difficult to balance.

Red BullSingle can sales in China are 30 billion, but how can a clothing SKU support 30 billion?

When revenue increases, a single SKU cannot support large sales, so the number of SKUs must be increased, but unless some business model innovations are made, increasing SKUs means the risk of failure to sell because of prediction failure Increase. At this time you have two choices, either to protect profits or cash flow. If you protect your profits, I will not carry the brand support without reducing the price, that is, high-end does not reduce the price. At this time, you can maintain the brand, but your cash flow is not enough. It may even be that the company’s cash flow is immediately cut off. Then, as a boss, you worked hard for a year. At the end of the year, you only have inventory in the warehouse. Fees, there is actually no real cash; or you can maintain cash flow and clear the inventory quickly, but it will lead to a decline in profit margins, a reduction in the regular price sales rate, and damage to the brand; if you want both cash flow and profit However, the income cannot be very high, because this means that the SKU must be selected, and the cash flow and profit can be maintained, but the income scale cannot be very large, and it has become so-called small and beautiful.


The brand side of entrepreneurial opportunities

Thanks to Ma Huijuan, the founder of Sumday, for hand-painting the scene, and I sincerely suggest you save it ~

① It is limited becauseThe current maturity of AI technology can only be used in the development of simpler versions and general models for trend prediction. It is more suitable for serving some popular markets and wholesale market brands. If it involves more advanced consumer markets In fact, its current application is relatively limited. But the future is expected.

In theory, fashion-related information can be obtained through social media data, and then refined and refined through algorithmic logic. But there is currently no universally applicable service in the 2B industry. A big limitation is that the SAAS service is modular, which means that it cannot meet some of the more customized special needs of enterprises.

② As the information industry in the clothing industry is largely compensated, the emergence of such platforms (such as Baibu) actually has a lot of meaning for many small B companies, but it is relatively large in scale and has a large impact on fabrics. For brands with special needs, it may be difficult to meet

③ The supply chain has been shortened to a few short steps. Commercial technologies that have already landed abroad have already been tried by some brands such as Nike and Adi.

④ At present, simple sewing can be realized, but due to the special nature of clothing processing, auto machine still has limitations. Especially in the field of fashion, the difficulty of automation has become more difficult.

NEIWAI, inside and outside, bite the last piece of cake in the apparel industry

NEIWAI founder inside and outside-Liu Xiaolu

14-16 years is the beginning of our brand development. In fact, it is very important to find the last piece of cake in the right track, underwear, and clothing industry.

Unlined underwear is not only a response to the pursuit of free and comfortable spiritual culture for young consumers, but also solves the problem of a large number of sizes in an underwear market. Traditional underwear is generally 15-20 sizes, and we are -7,Streamlined SKUs and reduced inventory.

15 years since we established our own R & D team, we believe that R & D is the core of a brand that can go very far.

17-19 years, did a lot of channel establishment, brand marketing investment.

“In the development and maturity stage of the brand, efficiency has become a core point, and digital investment is very critical”

From 2020 to the next 3-5 years, brand development and maturity, efficiency has become a core point, and digital investment is critical:

1. ERP inventory management system

In fact, we used the ERP system as early as 16 years ago. Last year we made a lot of upgrades. The core of the ERP management system is to feed back data to the inventory balance center in the process of brand to C, and automatically tell you which products you need to replenish, or when you find that the turnover is slow, when do you start discounting and what? Discount price.

2. PLM (Product Lifecycle Management)

I went to New York to attend a clothing conference the year before, and all the big companies were studying how to make the process from design development to processing smoother.

Because the larger the company, the greater the span of personnel involved in its various links, such as product development in Hong Kong and designers in Paris

Wait, in fact, no one has a full picture of where this product is now in circulation. For us, in fact, there are not more than 100 products in one phase, but there is a delay in this process. We went to Centric PLM this year, which is one of the best PLM systems in the world.

3, 3D fitting room

Why 90% of the underwear market is offline? Because everyone has a big pain point for size. If this is the first time a new customer arrives, our sales will definitely provide you with measurement services as soon as possible. Previously, I used a tape measure, and the privacy and accuracy were not very good.

We have launched this 3D fitting room, you can know the user ’s size while wearing underwear, and make product recommendations based on the size system, and this data will also enter your internal and external Tmall member centers for the next time purchase. In the entire Tmall member center, you can see a dataTable, we collected nearly 300 core data points, but only showed the customer 8 data dimensions that he was most concerned about to help her make a choice. At the same time, if you come to take a test every two weeks, you can still see one of your body curves.

This project was officially launched in August last year, and currently collects data on nearly 10,000 Chinese girls. We can understand the distribution of cups, body fat percentage, height distribution, etc. of our existing users.

DTC, where do you spend your money?

Sumday Athletics, the founder of Ma Huijuan,

We are a functional sports fashion brand of DTC. Before starting a business, I worked for an AI company for many years.

DTC, it is very important to be close to consumers and be able to hear the voice of consumers in real time, which is why we insist on DTC. Another point is that you can really spend the cost where it is valuable, and you can make high-quality things at a relatively low cost. Why is the DTC brand very popular in recent years? Not only because it can quickly respond to the needs of consumers and distribution end, it can essentially provide better things at a lower price. At least at this initial stage, DTC is still the most suitable for me.

DTC means that brands can have a variety of media channels to reach consumers directly, but in the process of coming out directly, brands are managing themselves, whether it is inventory or managing their own membership, management. In the entire process of information, doing DTC actually means the concept of new retail, and there must be a lot of data integration behind it.

DTC differences between China and the United States

Compared with domestic, the United States has risen a lot of DTC products in recent yearsbrand. One big reason is that their infrastructure is not developed, so companies like Allbirds are going to make their own websites, and the domestic infrastructure is too developed, so you are just a point on the platform and will always be “chosen” by Ali. It is very difficult to grow only DTC in China.

About the differences between China and the United States in DTC, in addition to infrastructure reasons, it is also related to differences in cultural habits. For example, because of Americans ’habits, they value their leisure life at home. Most purchases are done on the PC. Websites are very important for them. In China, people’s time is more fragmented, and when your purchase occurs on the mobile terminal, the website is not the best way to show it.

In addition, the development of the retail industry in the two countries is different. China’s e-commerce platform has become particularly powerful and has a strong right to speak. So Chinese people will be less dependent on websites. Therefore, doing things in China is different from the United States. But the underlying things are the same, which is to find out which traffic distribution is more suitable, or cheaper.

Everlane, an American DTC brand, has a very good concept of consumption upgrade. It uses big-name suppliers, but the price is very close to the people. The supply chain is transparent, and the middle-tier dealers have been cut off. But it can be done for a very important reason. At that time, there were no particularly many emerging brands in the US market, and it stepped on a very good blank vacant area. In fact, China is now almost at a similar historical stage. The imported brands are Adinike and others. Their influence is weakening to a certain extent. The local Jinjiang brands are also slowly aging. Young people may not necessarily buy their singles. , Then the middle segment is actually very lacking in quality and can be recognized by the masses of consumers of such light luxury brands, or relatively popular brands.

The supply chain side of entrepreneurial opportunities

Light chain co-founder-Zhou Dong

What about the flexible supply chain for apparelsoft?

Light Chain is a clothing supply chain service provider serving the main and small B-ends of Internet traffic.

Our basic point of view: Based on the trend of the Industrial Internet, to connect the (upstream and midstream) factory-end and (downstream) demand-side services in the apparel industry chain, the core key is not to solve the problem of information asymmetry, but it must be Really cut into the production chain and build a new and open supply chain architecture through digital reform.

Traditional clothing brands, new cultural clothing brands, channel e-commerce self-operated clothing business … What kind of “new supply chain architecture” are all tending to be realized?

At the tactical level, the behaviors manifested are mainly the following two points:

At the organizational structure level, more and more attention is paid to the fine division of business, and only do what they are good at, such as brand operation and aesthetic design, channel management, etc., rather than choosing to control the entire supply chain. In terms of content e-commerce self-employed clothing business, when these Internet traffic owners began to cut into self-employed e-commerce, it was already a headache in terms of organizational manpower and operational energy, not to mention more complex supplies that have not been encountered at all. chain. The same is true at the supply chain level. In the past two years, the fire factory brand should be called “brand” in the strict sense. It is a channel manufacturer enjoying the new channel bonus, not the real OBM. When the factory can launch its own brand, They will also realize that this is not so easy. It is definitely no problem to make a good product, but how to operate C-end brand, marketing, public relations, channels, etc., is equally prohibitive.

Simplify complexity at the brand product level. It does not mean reducing SPU, that is, not reducing R & D and upgrading, but reducing many unnecessary SKUs, further improving the efficiency of operations and R & D, and reducing the cost of inventory management and human operations. What are unnecessary SKUs? Large level, multiple fabric versions of the same category, small level, multiple colors and too many size specifications for the same product. Conversely, with more refined user operations and short and flat sales data feedback, more flexible and rapid turn-over production or micro-innovative R & D is achieved.

From the perspective of the entire apparel industry chain, what will the new supply chain system logic look like?



In terms of refined operations and channel organization management, brands have more reasonable predictions of SPUs and SKUs, and more effective micro-innovations, which have changed the previous long-cycle ordering model, and quick decision-making has laid the foundation for the quick-reverse model .

At the factory end, the midstream processing plants in the supply chain system will fall on the following three points: First, there is a relatively standard organizational management SOP. In addition to process optimization, personnel organization and deployment will also be more efficient . Second, a more scientific and rhythmic plant capacity planning, instead of always responding to urgent orders, can not guarantee quality control, nor is the traditional slow thinking to plan the plant capacity according to semi-annual and annual plans. Third, it can avoid the blind opening of the traditional model, causing a lot of waste of operating manpower and resources. Pushing it backwards, that is, the raw material side of noodles, naturally, you can achieve the following three happy results. First, more reasonable raw material reserves; second, reducing the risk of self-developed stocking and book keeping; and third, increasing the production effect of a single SPU on a large scale can further reduce the supply cost of upstream raw materials.

What kind of products will the market bring after the improvement of industrial efficiency?

When the efficiency of the entire apparel industry chain is improved, good products that will inevitably appear on the market will meet the following key points:

  • has cultural attributes: more diverse and personalized, enhanced cultural attributes, and more vertical

  • High-quality, flexible fast-reaction: micro-innovation fast-reaction, shortening the plant delivery period, reducing inventory risk

  • Personal price: The brand markup rate is too high, eliminating redundant costs, allowing consumers to make prices more personal.

    Difficult contradictions?

    1. Changes in organizational and management awareness: It is difficult for the ship to make a U-turn, not only for brands but also for the supply chain. At the factory level, it is not only the time that it takes to reform the organization of production methods. If you want to realize the automation of digital production, the reform can only be done by medium and large manufacturers with strong capabilities.


    2. The Internet and traditional industries are not in the same language: in the context of excess factory capacity, it is not impossible to find a reliable factory or a factory that can ensure stable quality control. Why do Internet brands / enterprises always say “the supply chain is a pit”? In essence, it is because the two parties are not in the same communication language family, and the chickens speak with the ducks. This is also what I meant at the beginning. Connecting services is by no means just an issue of asymmetric information.


    3. The market is chaotic and bad coins drive out good coins: The “negative effect” of the new retail and new channel delivery model is that it has led to a large number of fake and shoddy products that are “recharged and falsely publicized” “IQ tax products” such as “hyaluronic acid tights” have appeared, and upstream manufacturers who are really good at quality can’t figure it out.

      In short, if we only talk about the Internet model and digital reforms, but we are not enough to awe the industrial supply chain and the product’s enthusiasm, in fact, the industrial efficiency cannot be effectively improved.

      Postscript

      2019 is a year with no investment theme, but the clothing supply chain is a rare dazzling outlet. Capital ’s focus on the clothing industry has shifted from distribution and marketing to the back-end supply chain, from design, production, and circulation. There are head institutions waiting to see, and this trend is expected to continue in the new year. Regarding the clothing industry and the clothing supply chain, Tiger Sniff Pro Member Day will continue to follow and discuss, and look forward to the next time, with your participation .

      Tiger Pro member day is tentatively scheduled once a month, the activity is free, only for Tiger Pro members are open.

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