How much inventory is not a fatal challenge

In view of the current domestic apparel industry hot "Close the Tide", "Inventory Pressure" and "O2O" and other topics, Zhou Chairman of the United States, said that the closure of some shops is normal structural adjustment. Enterprise static How much inventory is not a fatal challenge, the biggest challenge is how enterprises do not produce inventory, and create product brand power. Local apparel industry should use the Internet to achieve apparel "guest to plant" personalized customization.

In the era of globalization, international famous clothing brands have landed in China, so that once brilliant domestic young tide card deep in the "closing tide" of the query, but also face the billion-digit high inventory size of pressure. In view of the current domestic apparel industry popular "Closing Tide", "Inventory Pressure" and "c2m" (That is, "customer to the Factory") and other topics, Zhou Chairman of the United States, said in an interview recently, "Closed tide" is only a structural adjustment process, and that the static inventory of enterprises is not a fatal challenge, Local apparel industry should look for inventory digestion opportunities, and in the future use of the Internet to achieve apparel "guest to plant" personalized customization.

The structural adjustment of the origin of "closing tide"

Q: I think the state of the United States in the whole industry from the point of view of the stock price is actually very good. But before, like Baleno, Jeanswest, pure these so-called domestic young tide cards are caught in the closing tide, not long ago also some media said that the United States last year also closed more than 200 stores, this is true? is the state now in disgrace?

Zhou: About the shop this matter, we have been adjusted for so many years, there are no way to renew the contract expires, we have a large number of properties are rented. The second aspect also has the city relocation, specially nearly five years Chinese urban reconstruction, the transformation, this relocation is very very big, the change is very big. So, there are a variety of factors combined, a year to adjust the hundreds of stores this is not very strange things, we have more than 4,000 stores nationwide, there are about 5% of the location of the shop to make adjustments to make improvements, I think is in a very benign structural improvement.

Of course, I think the development of the Internet over the past few years, this also needs to do some channels of adjustment, the original may be in the main commercial street will be high density of shops, 300 meters, 500 meters of the commercial Street we open three stores, four stores have, from today, the flow is gradually declining.

There is a city's business district constantly in the adjustment, change, so that the whole city has to shop. There are now more nearby mall, where the business atmosphere of the nearest living community is. The flow of people here is optimized, the original opened five stores, there may be a store there is enough. You have to turn off several, or you will have no profit or loss value. Therefore, this is also a very important issue. We are in business, mainly its profit and loss, no profit and loss necessarily adjustment.

There is how you better service consumers, the original opening a lot of stores is the purpose of people flow is very large, you can not meet the needs of a shop, a number of stores to meet the needs. Now some people do not need to go to a certain street, can be in their own area next to the new shopping malls, or new commercial Street. We need to turn off 10 of these five stores, but we're going to have to open 5 in another place, out of 7, which is probably the structure. So this is a natural rational adjustment relationship.

The local clothing brand should focus on the construction of brand power

Q: But we do see that in some of the more mainstream shopping streets, such as Beijing, we take the example near Xidan, and often see an international fashion store like h&m or Zara get mugged in a way that is overcrowded. But it is opposite of the United States is a bit of the hall of the cold feeling, have been affected by these two brands or the international fast fashion brand from the external impact?

Zhou: I think that from these years, of course, the Chinese market is facing the increasing competition of globalization, which is an inevitable trend. The second I think the location of the store, the business circle is related.

You just lift the Xidan, Xidan original Big Yue City before our position is the best position, people flow aggregation is the most. With the Xidan Grand Hyatt City, the flow of people here more. It is a mall, it is a shopping mall, and Mattel is an independent store there. It is in different time period of the people are not the same, purposeful shopping will go there, not purposeful shopping will go to Big Yue City. This is a business district relationship, not the absolute United States of the brand will not be welcomed by consumers, so less people, and not Zara, h&m consumers are more popular.

Q: But is this global shock just a change in the location of the shopping site?

Zhou: I think there must be some, I personally think over the past few years I thought more, that is, the construction of brand power. We build from the brand power, the original limited to such as looking for an image spokesperson of a promotion is enough, in fact, is not. Today's brand building from brand strategy, brand positioning, and even related to product strategy, product positioning, including product presentation, performance methods, including in which shop, in which location of the performance method, including the subtle whole shop building floors are related. These complete brand building, in this respect I think our Chinese brands, including myself in the past more than 10 years is not complete enough, not professional to think about the problem. It may have been more of a simple operation in the past and felt that operation represented the construction of the whole brand.

We look today, the first is the brand Power building, the second we from the Product force building. We from the original product force building, from their own innovative creative team building, relatively young. We have also introduced some excellent talents to join the team in the past few years, plus our focus on the internal training. In this innovation, the original design is more the internal and the end of it is business-to-business relationship, not the relationship between the company. Now our product innovation in this information acquisition, conversion from the original business-to-business relationship to become a direct consumer relationship, so that our designers to directly communicate with consumers. Consumer information, customer information directly to the innovators know that this innovation to further strengthen the problem, this is the second level.

The third level is the operational capacity level, our original operational capacity in thinking. China is the opportunity to grow up enterprises, 20 years ago have the courage to do things, have the courage to earn money, relatively fine management is not enough. Therefore, we now need to further strengthen the refinement of management, this fine management from a few dimensions to think of the problem.

The original time by chance, you will turn the 50 dollars into 60 dollars, and even will become 70 dollars. So, we said in the past more than 10 years how you can grow 20%, 30%, now you do not turn into negative growth, these years we are also the depth of the adjustment period. Therefore, from the sales scale is also shrinking, this contraction on the one hand we have a passive response, but also proactive response.

Have a passive response such as we do not do a good job in the brand, product strength, in the operation of fine management is not done well. Reactive, proactive, in some channels layout unreasonable, through such decomposition analysis, its profit and loss may be insufficient on the one hand we have to give up. This is called the Initiative shrink scale, to ensure that our profitability, operating capacity is positive. This can be seen from our financial statements that the results of our cash flow is gradually improving, gradually become better, which is called proactive response. Our size is shrinking, there are active ingredients, there are a lot of passive components, we do not in the management of fine aspects to strengthen. So, that's the next thing we're going to think about.

The fourth aspect is the channel strategy. From a channel strategy, Mattel is too rich to have 50 square to 10,000 square feet. This we are in some strategies, in the original strategy of thinking is not comprehensive. For example, you just gave these foreign brands its standardization is very high, it is basically such as in 800-1500 (square meters) between the error is not too big, it is impossible to show the United States Granville 50 flat to how much flat, which we are more complex than they.

The second level of complexity is our first-line market, such as to Beijing Xidan, to remote Tibet, and even Xinjiang below the city, city cities have stores. Our channel range, breadth also become more complex, such words to our product development all aspects also will increase the difficulty. But we have in the past in this strategy, in the planning aspect, in the whole standardization, the standardization this aspect originally was not enough. China has a saying that in the early stage of reform and opening up the first generation of entrepreneurs are first shot after the aim, is the first development, and then slowly regulate it, we have been doing this in the past few years, which is also active and passive.

China Market Digest Year 3 billion inventory easy

Q: Speaking of this management problem, in 2012, when the state of America had a news about its inventory. Because Shenyin Securities released a report that at the end of 2011, the United States of America's stock has reached 2.5 billion of the size. How is the stock digesting now, to find an effective solution?

Zhou: I think the peak was 2.9 billion, now about 1.3 billion, and I think the current range is very reasonable. This change just now I said, the original formation of a bad result is passive formation, today becomes this result is our initiative to improve.

This active improvement is I just now, from the brand force angle, product force angle, operating force angle, channel angle has been improving. The United States of America in these years should be entered into a deep adjustment, actively respond to the challenges and opportunities of the Internet, and actively deal with the challenges and opportunities of the globalization of China's retail market, and gradually become a adapt to global competition, adapt to the Internet transformation of such a new brand, emerging enterprises, dynamic enterprises, This is our goal.

Q: But the clothing industry it has its own characteristics, each season fashion is not the same, your inventory of the next season will be out of date?

Zhou: Of course, our past inventory digestion is a better way through more extensive channels. In China, 1.3 billion consumers, that is, China has a name only, it monopoly inventory, a year to sell 30 billion or 40 billion. The US stock from 2.5 billion to 1.5 billion, the middle a billion of, the A billion of and 30 billion or 40 billion percentage is still very small, indicating that China's market demand diversity is very very large.

So, we sell the history of these stocks to consumers who need it, and how we manage not to produce inventory today is a very important issue. Two years ago I said a word, I say: "Today any enterprise static how much inventory is not a fatal challenge, more than 3 billion, the Chinese market is huge, it is easy to digest in a year immediately." "The biggest challenge is whether you have the ability to manage no longer generate inventory; the second is more important to its brand power." If the brand is not strong, you do not have an inventory of consumers today will not like you. So, I think a brand of its core is a comprehensive ability, a number of capabilities to synthesize its competitiveness is what it is a very important.

Q: Can you do no inventory today?

Zhou: I think from today's report that I think is still relatively healthy, more benign, can not say I guarantee a stock does not produce, it is unrealistic, because after all clothing. You just said, the diversity of interests, he innovative things some people say this is OK, some people say this is bad, you always have some tail goods. These tail goods how we reasonable digestion, with reasonable channels, reasonable methods to digest, to serve consumers, this is also our operational needs to strengthen the thinking.

"Guest to plant" personalized custom or into the apparel industry trends

Q: You have mentioned the word channel several times, online also reported that you also about Ma Yun Travel, to friends learn the business of the electric business. You announced the O2O strategy a short time ago, and you have to tell us what the O2O strategy includes.

Zhou: The United States of America to do the Internet must not be copied Taobao model, it is not to copy the model of Jingdong, it must not replicate the other Internet mode. But the American state must think about this kind of development of the Internet, this trend is irreversible, even this electric business opportunity space is getting bigger. It is a very important thing for us to think about how you use the knowledge, tools and means of the Internet to utilize your resources. On the one hand now in the mobile platform, the gradual development of mobility, in fact, we can borrow these technologies and platforms so that the United States to develop a better state of Granville.

For example, we can make a good app. For example, we speak today of the concept of O2O, the O2O into a broader understanding and understanding, the original O2O it is a line of online interaction, is a simple interaction, we can extend. For example, our country 5,000 stores, the market is so extensive, we are very rich in goods, we are able to support a full range of goods in any store services, or let our country has 40,000 employees can realize a shop service. Through these apps can be a shop service, this membership type, this kind of micro-trust era, I think these aspects have very very big space, very very big opportunity.

In the next six months, Mattel will have some results in this area, and there will be some good ways out. But at present, we are doing well in O2O. One is full circulation, our country 5,000 stores have fully supported the liquidity delivery, is any one order initiated, if a store no goods, in B shop, C store any shop can find goods, promptly sent to consumers home, this is our call the full circulation of the project. This is the beginning of our 51 section this year, the effect is very good every day, whether to join or straight camp.

The second is that we will launch the cloud shelves next month. In other words, there is no goods in your store, as long as all the brands in our company have goods, you can support the service consumers. Here, for example, is a Mattel store, also through the cloud shelf can support the service Me&city brand. So, this is our next use of the Internet tools, the Internet means that the United States in the future of the development of the U.S. can go farther, better.

Q: Is this cloud shelf displayed as an electronic screen or a form of presentation?

Zhou: I think there are many, we are now more than one app operation. Download an app, in my friend's circle I serve you, you become my good friend I will tell you. You interview Zhou Today, Zhou like to wear what style of clothes, you may wear what clothes two people sit together more tacit understanding, this is a. The second you're going on a date tonight, partying with your new boyfriend, what kind of restaurant, what kind of clothes to wear, can also help you. We are equivalent to a fashion consultant to help you and serve you.

On the whole, I think there are many challenges on the internet and very great opportunities. Because the traditional enterprise was a little intimidated by the internet, a little panicked. We are now over the Internet to expand the subversion, expand the influence of the Internet. Whether from the government, from the society, from the academia, all think the future only the Internet, no other. Therefore, I feel that in the context of the Internet, we have to help the traditional industries to support the traditional industries how to do better, how to do a stronger.

So, the future we're talking about can be said to be c2m (i.e. "customer to Factory"), and no internet is possible. Originally C2M We call personalized customization, originally personalized customization I was also a small tailor, that is the high-end atmosphere on the level of things, tall things, today we can do it completely popular.

Today, for example, we have the Internet technology, such as two of us to take a photo of each other, the basic size in the inside, immediately through the 3D virtual pictures know how to match, how the plate type, how close, immediately can do pretty drawings, pretty plate type. Just do a relative, and the original database to do a comparison can know how a plate type is more suitable for you, we can do rapid production, within a week to meet your needs. Even we can through the means and tools of the Internet, our original manufacturing plant is a mass production line, transforming it into a single production line. Its production costs and the original volume of the gap between the small and faster, so that the c2m will become a popular supply of demand.

Therefore, our project is also within the next six months can be done. That is, we c2m personalized customization, so that personalized into a popular, popular personalization, which is also using Internet Tools, has not been done before. With the new Internet platform, in addition to the United States, the company's own brand, we can later and socialized brand docking, communication and cooperation. Because this platform can be fully enlarged, and even our China now rising rookie designers, I feel very good, very young, but he needs as we have the absolute supply chain integration capabilities of enterprises with his docking cooperation. I think they can be applied to these resources, with my resources grafted. Therefore, I think the internet can help enterprises to integrate the original resources into a larger industrial chain.

One of the thoughts of the future of the United States is to make the consumer experience simpler, more convenient, richer, and to make our industrial chain more valuable, and through this Internet technology, to help our original manufacturers to achieve flexible supply chain capabilities. This is the United States in the next 35 years, the idea of a big strategy, we have to use all the means of the Internet, the Internet tools to the upstream and downstream better integration, play a greater value.