The confusion of "multi-brand": whether it is a beautiful trap

Shanshan’s ideal is to use its “multi-brand, international” strategy to acquire dozens of clothing brands by 2010 through acquisitions and participation, so that more “shanshan” can be seen flying around the world. . However, the reality has ruthlessly poured cold water on the fir, which makes Shanshan's once dream began to become like a soap bubble, seemingly beautiful, in reality it is difficult to touch.

The confusion of "multi-brand": a beautiful trap?

If the world is a true prophet, he may not be able to foresee that a small garment factory, once known as a bad mountain in a small town in Ningbo, suffered serious losses and became insolvent. Even once became the “Global Economic Growth Company” and “China's Key Construction Enterprise” that took the top position in domestic sales for seven consecutive years.

No matter what kind of significance is taken into consideration, Shanshan Group is clearly worthy of a company that has been successful and once brilliant, but the fact is that it may be precisely because of the past glory that led directly to the Shanshan leadership. Decision-making mistakes, and after the glory, have become a typical case of failure of the transition of the clothing industry and even the business community for the blind pursuit of multi-brand.

Seven years of glory

Since Zheng Yonggang took over the predecessor of Shanshan, the “Ningbo Yigang Garment Factory” in 1989, this military-born and quite Confucian entrepreneur led Shanshan to run all the way, and put forward the first brand development strategy in the domestic apparel industry. , chanted the slogan "Shanshan to do the first brand of Chinese suit".

Three years later, in an amazing light, Shanshan took the lead in completing the market network system integrating production, supply, and sales, which was the largest market network system in the domestic apparel industry at that time.

Relying on a complete market network and channels, Shanshan’s sales of suits began to increase rapidly and expand to the national market. Since 1993, the market share of Shanshan’s suits has taken the lead among the national apparel brands, and has thus established its future. Seven consecutive year's suit winner.

According to an authoritative survey, in 1996, the market share of Shanshan's clothing has reached 25%, ahead of Youngor's closeness of nearly 20 percentage points.

From 1993 to 1999, when the highest Shanshan once occupied 37% of the market share, the highest profit rate reached more than 50 times the industry average. The rapid development of Shanshan has even attracted the attention of foreign economists. The World Economic Forum has rated Shanshan as a "high-growth company in the world economy" for three consecutive years.

Zheng Yonggang, the head of the Shanshan Group, who was described by the industry as “General Patton,” once inspired other clothing business owners to follow suit with his refined and resolute decision-making behavior.

When Shanshan Group’s high profitability and rapid development were in full swing, the Shanshan Group’s “strategic transformation” plan began to start in October 1999, and it repositioned its core advantages and turned itself into The management right of the garment processing factory was handed over to outsiders to implement sales outsourcing, and the focus of the group's work was shifted to the high value-added segment of the industry for brand development, design, and promotion.

According to Shanshan, Shanshan’s move was “a broken man”, saying that the reform will be in line with international standards and lay a solid foundation for its future “multi-brand, internationalization” strategy for the Shanshan Group in 2010. The goal of having 30 or so brands, of which 70% are international brands, is well-grounded. The move of Shanshan also won the applause of the community at that time and was called by the experts as “a daring attempt by the Chinese clothing industry”.

But later facts prove that Shanshan's dream of "multi-brand, internationalization" can only be wishful thinking.

Six years ago

In addition to what he wanted to do with body armor, Shan Shan used the abundant funds he had obtained in a few years of operation and the accumulation of capital after the listing. He turned product management to brand management, recruited big-name fashion designers across the country and even the world, and started The domestic high, medium and low-end apparel markets are rolled out across the board, with the goal of “covering 1.3 billion consumer demand in the Chinese market”.

To this end, it is based on China's well-known trademark "Fir Tree", and through strategic alliances and alliances with international companies such as France, Italy, Japan, etc., Rose Twilight, Italy, slavery, Masai, etc. Brands have mushroomed in the shortest time, and Shanshan's “sub-brands” have begun to fly.

While Shanshan’s hugely ambitious and ambitious preparations for aggressive offensive propaganda, both Shanshan’s leadership, its distributors and consumers have all seen a more immediate presence in the Chinese market in the near future. Fashion, brand influence greater Shanshan and look forward to endless.

However, in reality, Shanshan's "multi-brand" strategy is doomed to be Huang Xi's dream. One example that can be corroborated is that in the second year of Shanshan's strategic reform of “multi-brand and internationalization”, that is, in 2000, the Shanshan brand’s share of the market’s sales declined, with a 12% drop, and the market share. Once fell from the throne of the “seven consecutive championships” and was successfully surpassed by Younger, the rival of Ningbo. According to industry insiders, while Shanshan’s grand strategy is undergoing strategic reform, Youngor is also building huge amounts of RMB 1.1 billion to build its own channels to open up and down the industrial chain. Its practice has limited and affected the Shanshan’s past. Sales channels and sales scale. That is, since that year, Youngor has been firmly occupying the leading position in the clothing brand sales in the Chinese market and has maintained it to this day.

At this point, Shanshan began to realize that the chanting of slogans can no longer represent market sales; after all, the desire to be beautiful can no longer be translated into market interests. After falling from the championship of the apparel industry, Shanshan began to pay for its mistakes in decision-making: In November 2003, Shanshan Co., Ltd. held an emergency board meeting. At the meeting, it decided to sell the firs with a price of 12 million yuan and 5 million yuan respectively. Song Shan’s wholly-owned brand law and poems were all transferred to natural persons Chen Xingguo and Hong Wei. The market survey at that time showed that Shanshan had made a lot of painstaking efforts and its own human resources, and the loss of its own brand in the market reached more than 4 million yuan; Fanshan brand also brought huge losses to Shanshan.

Shanshan Dream's "multi-brand" strategy has encountered a head-on blow in real-world operations.

The long road ahead for “multi-brand, internationalization”

Since the transition from Shanshan to the present, it has been going through six years and six years. It is not a short-term for a company that started out in the grassland. Assuming that Shanshan's "multi-brand, internationalization" strategic direction is correct, then in this six-year period, Shanshan should have spent a period of pain and adjustment, and should embark on a normal development track. However, sadly, six years have passed, we still haven't seen a more fashionable, more internationalized, more branded Shanshan, but saw the gradual decline and decline of a once-gloomy clothing company. Many young brands such as Youngor, Pellow, Lodz, etc., who came from behind and emerged, are catching up and catching up. For Shanshan, how many six years can come again?

Zheng Yonggang once said that the general direction of the reform in 1999 was undoubtedly correct, but the implementation details were not satisfactory. There are many lessons worth learning.

Obviously, even Zheng Yonggang, the head of Shanshan, who has always advocated an international “multi-brand” strategy, had to admit that Shanshan lacked macro-control and planning in multi-brand control in the face of the current difficulties of Shanshan. And the mistakes of its initial strategic decision.

The fact is that for Chinese companies, especially for the "grassroots enterprises" that are similar to Shanshan, which started in the private sector, the implementation of the "multi-brand, internationalization" strategy is theoretically capable of furthering the enterprise. Development and growth lay a foundation and foundation for integration with large international companies. However, in fact, whether this strategy can be implemented successfully is undoubtedly an unknown number.

For Shanshan, its multi-brand strategy of advocacy and pursuing, at least so far, has not yet presented its blueprint as originally foreseen, and Shanshan’s warning to Chinese companies is that it is so-called internationalization. The branding strategy is not simply to look at who owns a lot of brands and brands, nor is it simply to put a few clothing brands on the market, but to lay the foundations and to develop the internal strength In order to achieve a high level of success, we must take advantage of the timing.

Similarly, the so-called "multi-branding and internationalization" of the so-called Shanshan Model can only be regarded as an exploration of Chinese enterprises. As for the ultimate outcome, we cannot Giving a definitive conclusion, but in any case, Shanshan has always been the forerunner of Chinese enterprises to take the first step toward the "multi-brand, internationalization" strategy. In this sense, Shanshan is worthy of our respect.