reply Global clothing industry collective winter: the closure of stores constantly reshuffle accelerated

Consumer demand is not to force, how to discount are useless!According to previous years, when e-commerce platforms are in a great battle on June 18th, offline stores in the clothing industry will also seize this great opportunity to attract consumers with discounts, coupons and other modes. But with the epidemic on a regular basis, that doesn't seem to be working.Reporters in Beijing Shunyi district after a business district visit to understand, including Nike, Adidas and other stores have put up different degrees of discount billboards. When the level of epidemic prevention and control in Beijing rose, a notice was posted at the entrance of these stores, saying "We can limit the flow of 4 to 5 people". There were few customers in the stores.A high-end outdoor clothing store staff told reporters that some of the store's goods at least 40 percent off, new 20 percent off, two can enjoy the discount. "It used to be difficult to get such deep discounts."Despite the discounts, but the reporter observed during the visit of consumers or a handful. "Because of the outbreak, fewer people are buying clothes offline." An employee of another clothing brand store told the reporter: "Weekday traffic itself is not big. The level of epidemic prevention and control was lowered some time ago, and the number of people on weekends increased significantly."It is worth mentioning that in the case of shrinking consumption, a number of clothing giants have delivered a dismal report. It's as if the global clothing industry as a whole is entering winter.The apparel giant delivered its "worst" reportZARA's parent company Inditex, 45, recently reported its first quarterly loss in 2020. Amancio Ortega, the world's richest man and founder of Inditex, who once surpassed Bill Gates as the founder of a $100 billion clothing group, has nothing to lose.It is understood that more than 88% of Inditex's stores were closed during the fiscal first quarter reporting period. At the end of April, only 965 of the group's eight clothing brands, including Zara, were open, less than a seventh of all stores.Meng Qi, former head of JD's new channel strategy, told reporters: "The fundamental reason for the decline in the performance of apparel companies is the shrinking market demand. Affected by the epidemic, the overall revenue of enterprises declined; In addition, as people reduce their outdoor activities, people's consumption decreases. In addition, business production is also affected, especially in the upstream and downstream industries under the same impact, people's income is reduced, the mass consumption ability will decline."In the operating data is not ideal under the circumstances, the closure of stores has become one of the consensus of the giants. Inditex said it planned to permanently close 1, 000 to 1, 200 of its stores, or 13 to 16 per cent of its global total."Closing stores is the right thing to do," Meng told reporters. "If the cost of opening a store is higher than the operating income, closing some poorly run stores is also a way to improve performance in order to lock in profits."International garment giants are tightening their belts, so what will happen to the domestic garment industry?In the first quarter of this year, 23 of the 53 listed companies in Shenwan's industry-apparel and home textiles industry posted losses, according to Flush Shun. In addition, 8 apparel and home textile companies have released the forecast of the performance of the first half of 2020, among which 1 is expected to suffer the first loss, 1 is expected to suffer the further loss, and 2 are expected to suffer the reduction."Although the company's performance declined in the first quarter of this year, the company has gradually resumed its offline stores since the end of March. By April, the company's offline stores had basically resumed business, except in some areas of Hubei province." A relevant person in charge of listed company of garment industry says to the reporter.Another person in charge of a well-known clothing brand in China told reporters: "During the outbreak of the company related stores. However, with the outbreak under control, the company's stores have all resumed business. The company has been developing online business, so in the first quarter of this year, the company's revenue still achieved year-on-year growth. The company also contributed to the growth by stepping up production lines for refitting medical protective suits and masks after the outbreak."In fact, with the gradual resumption of offline stores, domestic apparel enterprises can maintain their performance. With the global development of the epidemic, garment export enterprises are facing "order shortage".Mr Meng told reporters: "I once went to an export company and for various reasons their goods could not be exported and there was a lot of inventory. However, there is also a cost to keeping goods in warehouses, so companies have to dump goods at low prices at home. For example, a piece of clothing can sell for 300 euros in Europe, but only a few dozen yuan in China."The figures from customs tell a better picture of the garment export industry. According to customs statistics, from January to May 2020, China's textile and garment exports totaled 96.16 billion US dollars, down 1.17% year-on-year and 8.8 percentage points narrower than that from January to April. Among them, textile exports amounted to 57.95 billion US dollars, up 21.3% year on year. Garment exports were $38.21 billion, down 22.8 percent year on year. In May, driven by mask exports, textile exports reached 20.65 billion US dollars, up 77.3% year-on-year. Clothing exports were $8.91 billion, down 26.9 percent year on year.Go online to grab the bonus of live streamingPerhaps the loss spurred ZARA, whose June 18 campaign featured the word "discount" on the front page of its Chinese website, taking up most of the screen.During the special period, online and discount have become two key words in the garment industry.The relevant person in charge of the listed company said to reporters: "At present, the company's online business growth is relatively fast. The company has intensified its activities on jd, Tmall, taobao and its own official websites, and the June 18 event was also participated in."In response, Meng Qi told reporters: "The contraction in consumption has caused enterprises to increase inventories and costs, and the June 18 discount on e-commerce platforms is a good opportunity to clear inventory."It is worth mentioning that in order to support the growth of online business, a number of clothing brands have launched "live streaming" business."Nowadays, many brands are competing for the limelight of 'live streaming' and the company should not lag behind in brand promotion. Therefore, the company has specially set up a 'live streaming' team to promote it," said the person in charge of the aforementioned famous brands.It is worth mentioning that if you don't change, you will die. Inditex group has already realized this and started to lay out online channels, spending 1 billion euros to build an online studio. It is reported that the studio project is located in Zara headquarters, an area of up to 64,000 square meters. Inditex aims to increase its share of e-commerce revenue from 14 per cent to 25 per cent by 2022.According to the reporter, whether it is international famous brand ZARA or domestic brand, "live broadcast" has become a necessary product for publicity. But in the face of a barrage of live streaming from many brands, who will consumers choose? Can brand live streaming really turn things around?In this regard, Meng Qi told reporters: "although enterprises live with goods has become the current marketing tuyere, but the threshold of live broadcast is very low, the good and bad are intermingled, whether it can bring profits to enterprises is not clear.""You know, e-commerce has been developing for more than 10 years, and relevant rules have already been made. At this time, clothing enterprises want to develop online business, unless they spend a lot of money to find a professional representative company to promote, otherwise it is difficult for them to do online trading platform to compete with Tmall, jingdong and other large e-commerce businesses. "As brands flood into online trading and competition intensiates, companies may have higher online transaction costs than offline store openings in order to get a lot of traffic," says Mr Meng.In the opinion of an industry personage who does not want to be named, in addition to online transformation, focus on offline clothing companies can also undertake strategic transformation."Today, the landscape has changed. If the former garment enterprises are to lead the trend, then the current garment enterprises are to cater to the market demand. In this case, enterprises need to adjust their product mix to produce products with high market demand." Meng qi said the outbreak will be a big shakeout in the clothing industry, and two years from now will be the key. Businesses that dare to break their arms may find new ways.