Electric dealers have launched their own brands, higher gross margin is an important attraction

After Dangdang, where the customer prudential products, to the online supermarket image of the 1th shop recently confirmed the launch of the brand "Bestluck" clothing. 1th Shop Senior commodity director Mang revealed that its own brand clothing will be used to OEM production of cost, quality control, in the future, the private brand will become the 1th business growth of the important plate. However, the development of their own brands is not a panacea, there are risks to avoid. No. 1th Store's "Bestluck" can be as its name all the way "good luck" to develop its online clothing map, it is difficult to say.

Electric dealers have launched their own brands

The introduction of its own clothing brand has become a number of electrical business to seek development of the routine-wide build channels, expand the platform, and then the opportunity to mature on its own brand. The former has the fast fashion brand of every guest, have when when "Bondstreet". But people know more about shop 1th is online supermarket, to enter the field of fashion, to do their own clothing brand, this road to go to the end is not good, it remains to be seen.

When it comes to owning a brand, the first thought is Wal-Mart. "Own brand, daily parity, global procurement" and other keywords together to form a Wal-Mart popular global retail model. And Amazon early in 2009 and before, has launched a number of private brand business, such as Home brand Pinzon, outdoor brands Strathwood, sanitary and bedding class brand Pike Street, power tools brand Denali, Consumer electronics brand AmazonBasics, ebook terminals, such as the Kindle. In China, Dangdang launched its own brand "Bondstreet", but because of high logistics costs and the promotion of new brands when the cost of being hard to bear the weight of the brand, although the reputation of the outside, but has not yet achieved profitability.

Industry insiders said that the channel type of electricity dealers to open up their own brand is sooner or later. In fact, even the traditional retail channel, there are about 10% of the revenue from the private brand. Analysis points out that the introduction of its own brand, also means that the electric business platform from the core category of the development has entered the day-to-day department store times.

Higher gross margin is an important attraction

At present, the electric business owners of their own brand enthusiasm, no less than the brand manufacturers to control the shelf share of the strong desire. What causes their own brands to become the "sweet cakes" of the electric dealers?

High gross margin, for the electrical business is a big temptation. There is an industry analyst, "Generally speaking, the gross margin of own brand textile is about 60% (allow return), the gross margin of daily necessities is about 60% to 65% (the buyout can be as high as 80%), the leisure food has 50% gross profit, the shoe has 55% to 60% gross profit (allowed to have 30% return rate). "Along with the domestic electric dealer" price war "unceasingly, the flow buys the cost to rise day by day, the domestic electric power trader generally faces the profit dilemma. Channel type of electric business platform to get out of the operating state of low gross profit margin, relying on its own flow advantages, a modest launch of its own brand products, or is an optional road.

It is noteworthy that retailers, especially electric companies, are eager to "redeem profits," behind the will of VCs. "Before VC often with sales growth rate as the assessment requirements, and now is the gross margin, capital flow status to determine the additional investment." Industry insiders say. But like coin has two sides, the own brand commodity mainly relies on the cash buyout, obtains the independent pricing power, on the one hand brings the huge profit for the retailer, raises the competition threshold; On the other hand, it has also laid down the "bomb" for its inventory backlog and cash flow operation.

The introduction of its own brand is also conducive to the formation of a stable user base, can reflect the unique value of the brand. The development of own brand in fact for these electric business is a business model of innovation, for the common existence of homogeneous competition in the electric business industry, private brand is also the enterprise to take a differentiated route, the way to shape the brand. At the same time, the development of self-owned brand is helpful to promote the core competitive ability of the electric business platform, and to differentiate with other similar electric dealers, can use own brand to embody platform value and enhance customer loyalty.

The road of own brand is diffuse and long

As early as 2007, has not listed Dangdang modeled on PPG Model, launched its own brand "Bondstreet". But due to poor, soon after the shelf. Dangdang exerting its own brand clothing initially can only take the "OEM" way, the product is difficult to differentiate, and because of its relatively small production capacity, and the factory negotiation ability is much weaker, it is difficult to do some deep custom products.

And for every guest, although every guest has been in the field of clothing for more than four years, behind also has more than 400 foundry factory, 140,000 workers, successfully restructured the standardization of the production line of clothing, but now, where the customer is also facing a serious problem of product backlog.

Store 1th continues its "supermarket" characteristics and open up the road of the self-clothing, it can be said to be the natural, its backing from Wal-Mart's huge supply chain support, but also make it different from where customers, when, with more channels and resources to protect. The future of store 1th will be a bright place for its own brand.

But reality is not as good as it might seem. It is understood that the line of the next clothing brand to cultivate the cycle of about 5-8 years, although the line is slightly shorter, but also need more than 3 years. Shop 1th has such a long time to wait for its own brand to cultivate it? This is a very small test.

At the same time, the clothing industry in the past two years is facing high inventory, product quality and so on, it is difficult to say that the new "little brother" in shop 1th will not meet.

In addition, the capital, Brand trust, positioning and so on are the electrical business to do their own brand must face the problem. Despite its own brand high gross profit margin, but the early brand-building market investment is very large, the construction of the brand itself is not an overnight, it takes a long time, but also to accept competitors and customers like Uniqlo, the United States and so on, such as the basic market based on the traditional clothing brand challenges. Therefore, not only shop No. 1th, domestic electric dealers to develop their own brands, embarked on will be a long and dangerous road.