Text/Mantis Finance (ID: TanglangFin)
Author / Kinki
This winter was really cold, with the "cold waves" one after another. Some time ago, the circle of friends was bombarded by friends in Beijing. The temperature of -18°C is already close to the body temperature of Harbin.
Because the weather was too cold, down jackets were directly sent to hot searches. The well-known down jacket brand Canadian goose was sold out of stock. Long queues appeared in many stores. The waiting time was almost 1-2 hours, and many consumers still Choose to line up to buy.
Moreover, you may not be able to buy it when you enter the store. Sales indicate that many item numbers and yards are out of stock. It is likely to be in line for an hour or two. Consumers can only be lonely in line, which is "big increase" this year. The luxury brand bags are a good fight.
When the whole people began to scramble to buy down jackets, this down jacket despise guide was also out of the circle. After reading it, people can't help but look down, at which end of the chain of contempt for their down jacket?
Young people are actively embracing down jackets, and high-end series are more popular
In fact, every down jacket brand is very popular this year, whether it is luxury down brands such as MONCLER and Canada Goose, outdoor down brands such as NORTH FACE, and popular down jacket brands such as Bosideng and Uniqlo, every family is full of markets.
According to Tmall’s “Double Eleven” sales data in 2020, down jackets have become one of the most popular TOP5 products for consumers born in the 1990s in most provinces in my country (mainly concentrated in the north). Just like mobile phones and skin care products, they are in daily life. An indispensable item.
Moreover, with the improvement of the spending power of people aged 25-35 (post-80s and 90s), they have become the main consumers of down jackets, and they have also driven the rise of the mid-to-high-end down jacket market by themselves.
In recent years, consumers’ average budget for purchasing down jackets has reached nearly 1,000 yuan. Among them, those born in the 80s/85s are even more tyrants. More than 40% of people are willing to purchase down jackets above 1,000 yuan. The budget for down jackets born in 1990s is also as high as 700-1,000 yuan.
And this extends another question, why is down jacket more and more popular among young people? In fact, the bloated down jacket completely obscures the body curve of consumers. Where does this fashion sense come from?
At this point, we have to benefit from the major down jacket brands. In order to connect with the fashion circle, they have extended their hands to the fashion circle year after year, trying to create a kind of "even if the whole body is wrapped, but I am still very fashionable." a feeling of.
For example, NORTH FACE and the fashion brand Supreme jointly launched a joint model; for example, inviting domestic and foreign fashion stars to personally wear down jackets to demonstrate the sense of fashion and so on.
In addition, in addition to the celebrity down jackets of the same style and co-branded styles, the product designs of major brands are also constantly adjusted to reduce the "bloatedness" and increase fashion elements, so that down jackets gradually decouple from the "earth flavor".
Down jackets have become trendy, and their single product prices and sales have also followed up. Just like the Canadian goose mentioned above, although the average price of a single piece of clothing is as high as tens of thousands of yuan, they are willing to pay for the "trend" and "warmness". Consumers are still not a minority. According to the China Garment Association, by 2020, the size of my country's down jacket market will reach 138.2 billion yuan.
Is the down apparel industry a cyclical industry?
With the above changes in the down apparel industry, both consumers and investors can feel that this industry is entering the 2.0 era.
Although it cannot be said that the down apparel industry is a brand-new track or a blue ocean market, there is indeed a new market space here, but questions are also coming. Can the new market space change the cycle of the down apparel industry? Sexual issues?
As a special product, down jackets are more cyclical than products such as air conditioners. After all, there are hot summers every year, but cold winters may not occur every year. In addition, China’s vast land and resources, the temperature difference between the north and the south, is the 2.0 era of the down jacket industry. Can this imbalance be changed?
To answer this question, we might as well look for the answer from the current China's largest down jacket brand "Bosideng". Since the beginning of winter this year, Bosideng's stock price has climbed all the way and has reached a record high.
In 2007, Bosideng was listed on the Hong Kong Stock Exchange and became the "first stock of down jackets" in China. After its listing, Bosideng, with abundant cash flow, tried to develop non-down business and proposed a "four seasons" development strategy. It not only broadened the product line other than down jackets, but also actively opened stores in overseas markets such as Russia and the United States.
But at this time, Bosideng also encountered its first "cycle." In 2007, my country ushered in a rare "warm winter", which was naturally a "fatal blow" for down jacket brands. Under the pressure of high inventory, various manufacturers could only start price wars one after another, and "warm winter" became a crossover in the down jacket industry. But cut it off.
Warm winter + large-scale expansion caused Bosideng's share price to fall after its listing. It was not until the winter of 2008 that the cold wave came again, and Bosideng's stock price rose steadily in mid-2009.
As a member of the clothing industry, down jackets face another cyclical confusion, which comes from whether it can keep up with the trend of the change. To put it simply, the down jacket industry now produces fit tailoring down jackets that young people like. Which manufacturer also produces bloated down jackets is destined to be unable to please mainstream consumer groups.
This point can also be reflected in Bosideng's revenue performance over the past ten years. Around 2010, fast fashion brands such as ZARA and H&M have landed in the domestic apparel market. Coupled with the rapid development of e-commerce platforms, a wave of e-commerce brands such as Handu Yishe is also accelerating the sharing of the entire industry cake.
Bosideng encountered its second "cycle". After the company's revenue reached a historical peak of 9.325 billion yuan in 12 years, it continued to decline from 2013 to 2015.
Of course, after 17 years, Bosideng's performance has rebounded again. From the revenue of 8.9 billion yuan in 2017, it has gradually grown to the present, and it has exceeded 10 billion yuan.
Despite the epidemic in 2020, it coincides with another cold winter in 2020, so Bosideng's performance is still quite eye-catching. As of Q3 of 2020, the company's revenue was 4.661 billion yuan, a year-on-year increase of 5.1%; profit was 486 million yuan, a year-on-year increase of 41.8%.
During the "Double Eleven" period in 2020, Bosideng's performance exceeded 1.5 billion yuan, and its online down apparel business achieved a cumulative increase of more than 45% year-on-year.
Looking at the development of Bosideng over the past ten years, the development of the entire enterprise does have a relatively clear "cyclical", one comes from seasonal influence; the other comes from the management's control of the "trend trend".
So the question is, are there any down jacket brands that can cross the "cyclical" period?
Don't want to "rely on the sky for food", is high-end down jackets the secret of passing through the seasons?
If Bosideng is the leading down jacket brand in China, then Canada Goose and Moncler are the more successful down jacket brands after entering China in recent years.
Comparing the Baidu index of the three, it is obvious that down jackets are mentioned the most in winter. However, judging from the portraits of consumer groups, in Chengdu, Hangzhou, Shenzhen, Guangzhou and other southern cities that are not too cold, Canada Goose and Moncler mentioned The rate is not low, and stronger than Bosideng. It can be said that these two brands have changed the inherent impression that consumers in northern and southern cities have "wear only in cold winter" down jackets.
So, how do they allow consumers to accept a down jacket worth tens of thousands of dollars?
Back when the Canadian Goose was born, its positioning was only the outdoor work clothes used by Canadian police.
It was not until the third-generation head Dani Reiss took office that he began to transform his own products into western and fashionable down apparel, and infiltrated the marketing essence of luxury goods into the marketing of Canadian goose.
On the one hand, it adjusts the design of its own down jackets to impress consumers with a simpler and more fashionable style, and frequently invites celebrities and designers to cooperate to increase the exposure of its own products in the fashion industry.
On the other hand, it has continuously strengthened its own products as a professional outdoor cold protection brand, including sponsoring the Antarctic scientific expedition team, etc., to demonstrate the value of clothing. The most iconic round badge of Canadian goose today is the contour topography of the Arctic region.
Finally, by limiting production capacity + high pricing, Canada Goose successfully squeezed itself into the "light luxury circle." This is the anchoring effect of the brand. When consumers judge the value of a product, they usually "mark the price" based on a preconceived impression. Once they recognize the high value of the brand, they are naturally willing to pay for it.
In 2001, Canada Goose’s company revenue was only 3 million U.S. dollars. By 2019, Canada Goose’s revenue has reached a staggering 831 million Canadian dollars, and the revenue growth rate in the past five years has reached an average of 40%.
It can be said that "high-end" is the key to the down jacket brand to successfully cross the "seasonal cycle". It is the same as the Hermès brand. No matter whether you own his bag or not, you always know the brand.
Bosideng, who has focused on down jackets for more than 40 years, has also keenly seized the opportunity of high-end.
Since Bosideng announced the brand's "Focus on Down Jacket" strategy in 2018, its products are also trying to take the road of "high-end".
In 19-20 years, Bosideng boarded the New York Fashion Week and Milan Fashion Week, and also invited the superstar Nicole Kidman town field. After that, Bosideng also teamed up with many international designers to launch a joint series, and invited international stars Dou Sen and Widow Sister to endorse. Domestic endorsement stars include Yang Mi and Chen Weiting.
Embarking on fashion week, releasing co-branded series and haute couture series, and inviting celebrities to endorse...These are also commonly used moves in marketing by Canada Goose. However, promotion naturally also costs money, and Canada Goose and Bosideng are no exception.
In addition to overwhelming publicity, high-end product lines must also keep up. In Bosideng's official flagship store, the average price of Milan Fashion Week series and Takada Ken's triple series is between 2-3 thousand yuan, which is much higher than the price of domestic down jackets.
In fiscal year 18-19, the proportion of sales of Bosideng products below 1,000 yuan fell from 48% to 12%; the proportion of sales of products above 1800 yuan rose from 5% to 24%. From the data point of view, the "high-end" has already Brought some new changes to Bosideng.
However, when we opened Bosideng’s flagship store, we found that the sales of products in the price range of about 100-300 yuan were still very high, indicating that some consumers have accepted the "high-end" Bosideng, but some still have not.
But in any case, a series of fashion and trend changes favored by young people have also brought tangible benefits. In 2020, the sales of Bosideng and Xuezhongfei in Tmall stores were 2.912 billion and 454 million respectively, up 50% and 179% year-on-year. Among them, the mid-end brand Xuezhongfei has also been brought up a lot.
However, the acceptance of Bosideng's high-end products in the entire market obviously still has a certain gap with Canada Goose. The market size of Bosideng is more than double that of Canada Goose, but Bosideng's profit is about 1 billion yuan, and the net profit of Canadian Goose is about 770 million yuan. The profit gap is far less than the market size gap.
Finally, let’s compare the stores of the two brands. As a direct way for products to communicate with consumers, the store can display the brand’s tonality and collect data to feed back consumers. It can be said that it is the facade of the brand.
So far, Canada has a total of 16 stores in China (including Hong Kong, Macao and Taiwan), of which 4 stores will be newly opened in 2020, all of which are directly operated stores.
The number of Bosideng retail outlets has changed greatly. The number of stores reached a peak in 2012, and the number of stores has been shrinking since then. In 19 years, the proportions of self-operated stores and third-party operations were 38.2% and 61.8%, respectively.
But doesn't it mean that the more stores the better? This is not necessarily true. The number of stores should reach a balance with the strategic goal of brand development.
Take Canada Goose as an example. Although the number of branded stores is small, the response speed is not slow. Since the brand proposed a strategy for Greater China in the middle of 18 years, it opened boutiques in Hong Kong in October and opened flagship stores in Beijing and Shanghai in 19 years.
Furthermore, as a luxury down jacket brand, there is nothing wrong with such a "slow store opening" model. It slowly explores the boundaries of China's down jacket market increment, so that the relationship between supply and demand will not be broken, and the brand can go for a long time.
After all, take a step back and think about it. When the number of Canadian goose stores increases to one in ten, the brand's sense of luxury will be reduced a lot. For the Chinese, rare is precious.
Therefore, Bosideng's adjustment of the number of stores in recent years is actually a move under the focus of strategy. Since 18 years, Bosideng abandoned the extensive expansion of the store growth model and gradually increased the proportion of self-operated stores. While directly managing the stores through the direct-operated stores, Bosideng was also upgrading and transforming its own appearance.
The large-area transparent window, conspicuous brand LOGO and background lighting, the image of Bosideng’s store is bidding farewell to the "earth flavor", which is also very helpful to change the inherent impression of Bosideng in the minds of consumers.
In general, Bosideng’s strategy has begun to bear fruit on the road of “climbing high”. Through his efforts in the fashion trend circle, Bosideng has gained a new wave of young fans.
However, compared with Canada Goose, its international brand's influence and coverage do have a first-mover advantage. In terms of promotion investment, the same expenditure will bring about a natural splash compared with Bosideng, which is only rooted in China. Be stronger.
In addition, most domestic consumers have stronger trust in foreign brands than domestic brands, and their willingness to pay will be higher. Bosideng wants to keep up with the road of "climbing", but also understand that its advantages are not only derived from "high-end prices." It should also include a unique brand tone.
As a "national tide" brand, Bosideng can create its own culture and connotation, and inject resonant brand cores into its own products, and consumers will naturally be willing to pay for the products.
However, in the short term, due to the impact of the epidemic, the North American market has been severely affected. Instead, the Chinese market has become the only market with a growth rate in the down apparel industry. This is why the Canadian goose sold in the international market is dependent on Q3 revenue as of 20 years. The year-on-year decline was 39.5%, which was only due to the increase in the Chinese market.
Therefore, although the epidemic has also caused a certain impact on major clothing brands, for Bosideng, this is also an additional opportunity for Bosideng to play against Canada Goose.
China is a market where consumer sentiment has not cooled down, and online sales are booming. If we can seize this opportunity and make good use of local advantages to expand, it may be able to bring a second breakthrough for Bosideng.
*The pictures in this article are from the Internet
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