Top of the big era

Shi Jinglin said softly: "PPG was very popular in the past few years. It claimed to copy the Dell model to the clothing industry. When it entered the market, it was engaged in men's clothing."

The Dell model is legendary in the business world.

It is said that at that time, HP computers were the best in the world, and Mr. Dell also wanted to make computers, so he designed a lightweight business model starting from the inventory turnover rate.

That is, there is no research and development, no production, no factories and assembly lines, no stores, and all business is outsourced. Then adopt the direct sales model, eliminate the middleman, and use mail orders, telemarketing and TV shopping to directly face consumers.

Dell is only responsible for advertising and order management. The light company model greatly reduces company costs and inventory pressure. Through a series of exploration and innovation in business models, Dell finally fought its way into the red ocean of the computer industry and became a large company as famous as HP in less than ten years.

Today's lightweight direct sales companies are basically copies of the Dell model.

"A few years ago?" Zhou Buqi was a little surprised, "B2C e-commerce? Why haven't I heard of it?"

Shi Jinglin said: "There is an e-commerce platform, but it is not the main channel. They spend millions of advertising dollars every month on TV stations, newspapers, magazines, and building advertisements. Their main sales method It’s phone shopping.”

"Pure bullshit."

Zhou Buqi shook his head.

Telephone shopping has been around for decades in the United States and Japan. It is a very healthy and advanced direct sales model and can be called the pioneer of Internet e-commerce.

But it's different in China. Telemarketing is equivalent to fraud.

Shi Jinglin nodded and said: "Well, that's not good. Last year, it was reported that the advertising fees owed to the TV station could not be paid. It was also exposed by the media that they were clearly a local company, but they were labeled as an American company. , claimed to be a world-class fashion brand to deceive the people. It also said that the inventory and slow-moving goods purchased from abroad were sold as new models in China. Sales originally reached 1.5 billion, and then they were all over. Last month, I heard that the founder took the US$20 million in his account and went abroad with the money."

Zhou Buqi nodded, "Well, the inventory stagnation pressure in the clothing industry is so high, clearing inventory can present great business opportunities."

"Huh?" Shi Jinglin raised her eyebrows, "What do you mean?"

Zhou Buqi said: "This is the PPG model you are talking about. It is definitely wrong to deceive people, but their model also has merits. Consumption levels are directly linked to income levels. Products that cannot be sold in developed countries can be sold domestically. Sales in second-tier cities. If the products cannot be sold in first- and second-tier cities, they will be sold to third-, fourth-, fifth- and sixth-tier cities. If they cannot be sold in seventh- and eighth-tier towns, then they will be packaged and sold to Africa."

Shi Jinglin looked down upon her, "What kind of business is this?"

Zhou Buqi crossed his legs, not shying away from her at all, and put his arm around Sun Wanran's shoulder, "Didn't you say that more than 40% of the inventory is stranded? Except for those luxury brands with deep pockets, they will destroy the inventory directly. Most of them will be destroyed directly. All brands have to find ways to clear their inventory to get their money back. Since they are clearing their inventory, they will inevitably reduce their prices significantly. If there is an e-commerce platform that can sell genuine big-brand clothing from around the world, the price will only be 50% off, or 30% off, or 10% off, isn’t this business going to start? It not only helps merchants clear their inventory, but also meets the consumption upgrade needs of some low-income groups.”

The essence of transactions in a market economy is that everyone gets what they need.

The stronger the demand, the more prosperous the business will be.

This is obviously a good idea.

Shi Jinglin's beautiful eyes widened, "Do you really want to be a clothing e-commerce company?"

Zhou Buqi said with a smile: "What are you doing? I am very cautious about e-commerce. I didn't see how Penguin's e-commerce has spent so much money and was suppressed by Ali."

"Then what happened to you today?"

"Lei Jun invited me to invest in Fancl. He said that we would jointly build a national fashion brand to compete with Uniqlo and ZARA. I think this matter is very meaningful."

"Disaster!"

Shi Jinglin shook her head, her expression not relaxed.

Zhou Buqi sighed, "Yeah, to hear you say it, it's not easy. Clothing is a fast-moving thing. To keep up with the trend, you need to have strong multi-level management capabilities."

Shi Jinglin said: "Yes, foreign clothing brands have been in business for decades, and they all have very mature international operation experience and a complete set of inventory clearance plans to provide services to developed countries, developing countries, and the third world. The country allocates inventory. They have the whole world, and it is a global deployment. We only have the domestic market, and the scope of circulation is very limited. The most we can do is ship to Africa."

"Yes, no matter how big the domestic market is, it cannot match the digestion capacity of the global market."

At this moment, Zhou Buqi understood why domestic fashion brands were losing ground under the impact of international giants.

Foreign brands can pursue lower gross profits, use better materials and fabrics, better designs, and lower prices. This is not the case for domestic brands. Inventory turnover is a big obstacle. Foreign companies can easily clear inventory and collect payment, but domestic companies cannot clear inventory. Once there is a large amount of unsaleable goods, cash flow will collapse.

In the previous life, Fanke had 20 billion worth of unsold goods in the warehouse. Most of these goods were "borrowed". They borrowed materials from suppliers and then asked the manufacturers to produce them first and pay later.

After the product was made, it actually sold quite well.

However, who can be sure that every product can be sold out? The accumulation of less makes more, and the more we accumulate, the more foreign debt we can pay, and the financing cannot keep up, and we will no longer be able to bear it.

Shi Jinglin pursed her lips and said: "Don't you always say that the more you give up, the more you get. The more you pursue low profit margins, the more you can make a big business. Just like the computer industry, in the past, the whole world There are thousands of computer brands, but now there are only a dozen or so left. Taking the initiative to reduce profit margins seems to make less money, but in fact, all competitors are dead, and its own market share has increased, making more money. "

"You still need to educate me?" Zhou Buqi snorted, "Lei Jun and Fanke are playing this trick. They must be ultra-low profit margins and use low price and low profit strategies to dominate the market."

In fact, when Lei Jun later started Xiaomi, the business thinking he used came from Chen Nian’s Fanke.

Focus on cost performance, super low price.

During that time, Vanke was at its peak, and it was highly sought after by those born in the 1980s, making it the number one trendy brand in the country. After Lei Jun invested in Xiaomi Studio, he followed Fanke's business thinking and started Xiaomi Technology.

Fortunately, the threshold for making mobile phones is much higher than making clothes.

When making clothing, you can basically do whatever you want without any pressure from the supply chain. This is not possible when it comes to making mobile phones. The supply chain is short and Xiaomi mobile phones are in short supply.

The end result is that Fanke, which is never out of stock, is finished because of too much inventory. Due to poor supply chain management and no inventory, Xiaomi mobile phones have avoided this minefield and become bigger and stronger little by little.

Therefore, the success of starting a business must be inseparable from the luck of the right time and place. If Xiaomi's entrepreneurial stage was as smooth as Vanke's, it would probably be dead.

Zhou Buqi gradually cleared his mind.

From this point of view, if you want to save Fanke in this life, you don't need to look at anything else. You must keep an eye on inventory turnover. This is the most critical thing.

Shi Jinglin said: "There are also BONO and Maiwang, which are also B2C clothing manufacturers."

"How about it?"

"BONO is a business attire, suit and the like. It was a project started by the Yahoo China team after they left their jobs. But I always feel it is too monotonous. This should not be an independent e-commerce company."

"Huh? What do you mean?"

"They also have an e-commerce platform, but after logging in, there are just dozens of BONO clothes, which is too monotonous. There are too few choices, how attractive can this be?"

"Well, this is also a very important point." Zhou Buqi nodded, agreeing with her opinion, "Same for Fanke, clothing and e-commerce are a bit too confusing. I told Lei Jun last time However, whether Vanke is a clothing company or an e-commerce company, its positioning is too unclear."

It's certainly possible for a company to do both clothing and e-commerce, but that would require a large conglomerate.

Fanke is just a start-up company and is not strong enough.

Just like BONO, if you sell your clothes on Amazon, Taobao, or JD.com, what’s the point of having your own e-commerce platform?

If you only sell it on your own platform, but there are dozens of clothing styles on this platform, how many people are interested in buying it?

E-commerce shopping is just like going shopping.

Many times, instead of placing an order with a purpose, I just looked at it, suddenly saw a good thing that I was interested in, and then placed an order to buy it.

This is different from Manchester United’s official website.

When fans go to Manchester United's official website to buy jerseys, they do so with a clear purpose. A real e-commerce platform must be like Taobao, JD.com, Dangdang, and Amazon. It has the attribute of shopping. After users log in, they can always see a lot of strange and interesting things.

Taobao has the richest brands and the most fun gadgets, so Taobao does the best.

"Where's Maiwang?"

"Mai.com has been around for many years and has gone through several transformations. In the beginning, I made my own clothes. But then I found something was wrong and stopped doing it. It became a pure fashion clothing shopping platform with hundreds of clothing brands on it. But e-commerce is not that easy to do, and it has never taken off. Last year, Mai.com was controlled by its major shareholder Sequoia China. I hope there will be changes, but the actual results are not good. Except for Taobao, nothing else will work."

"Yes, how can e-commerce compare with Taobao?"

After such communication, Zhou Buqi gradually got to know this industry.

For Fanke, they are really forced to do e-commerce.

Because the prices of Vanke's shirts and T-shirts are too low.

Others' shirts cost 200 yuan, but they only sell them for 69 yuan. They mainly adopt the direct sales model that eliminates middlemen, sell through Internet e-commerce, and return the middlemen's profits to consumers.

However, if you go to Taobao to sell... Taobao has also launched the Alimama advertising platform, and Ziweixing is the largest Taobao customer.

If Vanke's clothes want to have greater traffic and exposure on Taobao, they need to join the advertising platform of Alimama.

As a Taobao customer, Ziweixing usually earns about 25% commission from each clothing order.

In other words, if a user places an order for a shirt priced at 69 yuan on the Taobao preferred platform of Friends.com, then 17 yuan of it belongs to Friends.com. In addition, about 2-3 yuan belongs to Taobao.

Coupled with the higher shipping costs that may exist on third-party platforms, this additional expenditure will put Fanke into a loss, and it will have to do its own e-commerce.