Electronic Business and Entity department stores to attack their own brands to make profit hidden risks

Independent pricing power can bring huge profits, but experts warn against inventory risk and cash flow bombs

H&m in recent times to the market to put new products, labeled "Versace (Versace) for H&m", "Givenchy (Givenchy) for H&m" and other labels, the purpose of the surface is to get rid of imitation h&m plagiarism suspected, but in fact conducive to stop consumers "Downgrade consumption" ——— buy retail Stores "own-brand" products.

and April 5, when the own brand children's wear and its own home brand low-key online, set off the electric business platform collection to meddle in the big screen of their own brands. South all reporters learned that Jingdong Mall has also set up "own brand department", good music to buy also in with own brand consulting company to discuss cooperation, and Lok Amoy nets in addition to increase the "Angry Birds", "Plant war zombie" and other joint brand development efforts, its C-EO Bi Sheng (micro-BO) also publicly said, Lok Tao Network will gradually launch its own brand.

"At the moment, Wangfujing department stores, thousands of department stores and other entities in the private brand is also a lot of trouble, for the factory settlement ad hoc preferential payment methods." "Beijing Zhao Yi Retail company general manager Liu told South all reporters, own brand is the retailer to enhance the profit of the most powerful weapon, but the hidden threshold is quite high." If blindly developed, or will repeat more than 10 years ago, "Sheng Extremely and decline" the mistakes.

The tactics of fencing own brand

"In addition to the currently online D angd Ang B Aby Children's wear, in the future, we will expand the product line of our own brand to toys, baby carriages, early teaching supplies and other fields, and will try a variety of operating modes, such as special distribution channels, will soon have ' Bird No. 3rd Mall ' stationed Dangdang. "Dangdang Vice President, Infant department general manager Wang told South all reporters, the reason to choose to pry open their own brand market, first, when the" 0~13岁 "Baby Child consumption habits analysis of the data is very detailed; second, China's high-end children's wear product development is still relatively blank.

In Wang's view, the difficulty of private brand development is not in the procurement of foundry and other production links, but planning marketing, product planning, product design links. This requires a professional team to operate. Dangdang has set up its own brand operating team, the team's relevant leaders are from Li Ning, the United States and other well-known clothing companies out of the brand to establish, operate quite familiar. ”

However, the establishment of this brand-name operating team is not without difficulty.

"There is a lot of art in pricing. This relates to the inventory of this single product all year round, how to sell, fabric business how to price, processing, packaging costs and how much money need many details of the problem. "Beijing Zhao Yi Retail company general manager Liu to south all reporters frankly, this kind of buying hand must know both sales and proficient fashion production, this in China is simply" rare.

If the customer as "electric quotient + fashion" model, perhaps Jingdong Mall's approach is more flattering. According to people familiar with the matter, Jingdong Mall has set up its own brand department, and its trader is from every guest to the Beijing-East Vice President Shengchang (Weibo).

In addition, such as good music buy, Wangfujing department stores, thousands of department stores and other enterprises, may adopt a more secure approach, commissioned by the company's own brand consulting companies to fencing.

The Redemption of profit

The enthusiasm of the retailer for its own brand is no less than the strong desire of the brand manufacturer to control the shelf occupancy.

A C Nielsen study found that consumers ' loyalty to a particular retailer was very low and that the main reason was that there was not enough difference between store types. And if develop own brand, can form retail market differentiation advantage.

And, Nielsen has investigated the consumption habits of Chinese consumers, the results show that Chinese consumers have relatively low awareness of their own brands, and in the past one months have bought their own brand of consumers only 15% ——— This also indirectly proves that the self-owned brand in China still has a lot of market opportunities and development space.

The bigger temptation might be to "increase profits". "Generally speaking, the gross margin of private-label textiles is about 60% (allow returns), the daily necessities of the goods is about 60%~65% (buyout can be as high as 80%), leisure food has 50% of gross profit, shoes have 55%~60% margin (allow 30% return rate)." "Liu is an analysis. By contrast, according to public information, Dangdang's gross profit margin last year was 13 8%, while Jingdong Mall gross margin is only 5%.

It is noteworthy that the retailer, especially the B 2C Electric Company, is eager to "redeem profits," behind the will of the VCs. "In the past, V C are often based on sales growth rate as the assessment requirements, but now is based on gross margin, capital flow status to determine additional investment." "Lok Tao Nets vice President Chen said.

Hidden risks

But like the two sides of the coin, the self-owned brand commodity mainly relies on the cash buyout, obtains the independent pricing right, on the one hand brings the huge profit for the retailer, the lifting competition threshold, on the other hand also for its stock backlog, the cash flow operation buries "the bomb".

"Take small appliances for example. The usual price of the nine-yang soybean milk machine is about 300 yuan. If b 2C electric business to the nine-yang soy milk machine into its own brand, change packaging, the price adjusted to 150 yuan. The question is, will 150-dollar products be better? Even if so, consumers will abandon the nine Yang, the United States and choose your brand? "Every guest an internal executive told the South reporters, only in some brands of low penetration of the field to do their own products to achieve success, such as home trinkets." and clothing textile seems to be very large consumption, but the trend is too fast, Adi, Nike, 361 degrees and other brands are still difficult to resolve the inventory of the disease, not to mention the hard to find the retailer?

Little-known "Secrets" Also, "allegedly, Beijing copper Cattle Company has to undertake Dangdang own brand clothing production orders, and the company is in fact the agent of the factory."

Liu a gauge, "roughly estimating that the sales of a private-label product will be at least 18 million per year." "Single product 18 million sales performance for when, Jing Dong and other electric companies, should not be difficult." The new problem is that the current electric-business sector is "cash-king", but the more orders it has, the more cash it will need to pay.

How to balance? Liu told the south reporters, "now, Wangfujing department stores, thousands of department stores and other retailers are considering to follow the Gome (micro-BO), Suning model, and the banking system cooperation, for the factory settlement ad hoc ' acceptance ' service. ”

Reporter: Xiaoxin intern Zhang

Industry view

Only in some areas of low penetration of brands to do their own products to achieve success, such as home trinkets. Clothing textiles seem to consume a lot, but the trend of change is too fast.

In the past, V C are often based on sales growth rate as the assessment requirements, but now is based on gross margin, capital flow status to determine additional investment.

The self-owned brand commodity mainly relies on the cash buyout, obtains the independent pricing right, on the one hand brings the huge profit for the retailer, the lifting competition threshold, on the other hand also for its stock backlog, the cash flow operation buries "the bomb".