According to some data, due to the impact of the new crown epidemic, China's clothing market revenue is expected to evaporate by at least 400 billion yuan in 2020, and the overall market size is expected to shrink by 15%. Hailan home, known as the "national clothing brand", has not been spared. In the first half of the year, Hailan home's revenue was 8.102 billion yuan, a year-on-year decrease of 24.43%. The net profit attributable to listed shareholders was 947 million yuan, down 55.41% year-on-year.
Disassembly, like many clothing brands, Hailan home suffered heavy losses in the first quarter, with an operating revenue of 3.848 billion yuan and a net profit of 295 million yuan. In the second quarter, it recovered rapidly, with revenue of 4.254 billion yuan and net profit of 653 million yuan, an increase of 223% compared with the first quarter, and nearly 80% of sales were recovered in the second quarter of 2019. In addition, Hailan home's mid year report showed that its net cash flow was 881 million yuan, a strong increase of 76.79% over the same period last year; the total inventory at the end of the year was 8.217 billion yuan, a year-on-year decrease of 625 million yuan and a decrease of 830 million yuan compared with the beginning of 2020.
"In the first quarter, the pressure is huge for the offline enterprises like Hailan home. After reviewing and reflecting on the first quarter, we ushered in the recovery of performance in the second quarter, and the cash flow recovered to 90% of last year's. Although this has not fully met the company's expectations, it has undoubtedly restored the cohesion of our team from top to bottom to the state before the epidemic, so now we have a high degree of internal consistency and clear objectives. " Zhou lichen, President of Hailan group, talked to Yibang power.
Looking back on the past period of time, Zhou lichen thinks that two things are right: first, when many brands close stores in large numbers, Hailan home sticks to its offline dishes; second, it does not give up the deep cultivation of traditional e-commerce channels when catching new traffic such as live broadcast and community.
In addition, the change of single brand management thinking and the parallel of new brand incubation strategy provide enough energy for the rapid recovery and subsequent running of Hailan home.
After talking with Zhou lichen, Yibang power summarized several key actions and thinking behind the growth of Hailan home.
Physical stores can't be closed
"A physical store is equivalent to a small private domain traffic pool, and it needs a slow process to raise it to a higher sales volume. Many of our stores have been open for more than ten years. If we close them, we will give up our market share. If we close them and open them again, it will be very difficult to recover the original performance. That's why many well-known clothing brands are so defeated that it's hard to recreate their past glory. " In Zhou lichen's view, a store to close is very easy, to open is also very easy, but closed to open again certainly can not reach the previous brilliant.
Therefore, in the first quarter, when a large number of brands closed stores, Hailan home was strong, and there was almost no closure of 6000 stores across the country. "It's going to be forced to survive. Lower the gross profit and focus on the market share. " Zhou lichen recalled.
We all know the truth, but it doesn't mean we can do it. Under the epidemic situation, offline stores are very difficult. The dealers will consider that they are losing money every day because they have so many goods on their hands. They still need to live? Therefore, it is a wise choice to clear the warehouse and close the shop to stop loss.
But this is not in line with the wishes of the brand side. "It's not that the dealer doesn't want to do it, it's that he doesn't have the ability to do it. If they can control it, they will not close the store, because closing means losing sales and market share. " Zhou lichen pointed out, "at this time, you will find that only companies with direct management can control their own dishes when the crisis comes, especially offline." Editor's note: Hailan house adopts the mode of less direct marketing plus most direct marketing.
Under the quasi direct mode, the company and franchisees form a community of interests. Under the quasi direct mode, the franchisees raise funds by themselves, go through the procedures of industrial and commercial tax registration in their own name, set up shops or rent shop / shopping mall stalls. The franchisees have the right to use the shops / shopping malls legally, and the franchisees entrust the company to take charge of the internal management of the stores.
The sales settlement between the company and the franchisee adopts the consignment mode. The company owns the ownership of the goods, and the franchisee does not bear the risk of unsalable inventory. After the final sale of the goods, the franchisee and the company shall divide the shares according to the agreement. Compared with franchising, direct marketing replaces distribution contract with management contract. The advantage is direct management, which can be more subtle. In Zhou lichen's view, when the outside world said that the physical store is not good, we should change the angle to think: a physical store, if the usual test only 60 points, the test paper becomes difficult after a failure, that of course will feel "no", but if the original test is 90 points, because the test paper becomes difficult, only 80 points, it can still live very well.
Focus on new users, not new traffic
In the second quarter, Hailan home's online business grew by 40%, of which a small part was gained through live broadcasting and community, and the vast majority came from traditional e-commerce channels.
"There are a lot of new traffic, but they are also scattered, such as live broadcasting and community. These growth must go through a climbing process. Therefore, it is also very important to cultivate the traffic of the original traditional e-commerce platform. " In Zhou lichen's opinion, do live broadcast, buy traffic, finally must pay attention to this flow whether can precipitate down, become own flow. Therefore, when we advocate new traffic, we must be calm.
According to its introduction, during 618 of this year, Hailan home's sales on tmall platform increased by more than 140%, ranking first in Jingdong. In the first half of this year, it also achieved good growth in vipshop. In addition, it added some additional new traffic (such as live broadcasting and community), so it had the overall growth of online business in the second quarter.
"In terms of community, we did not do it immediately in February. In retrospect, it is right. Why? Because many ideas were not perfect at that time. If we blindly do it, we will only overdraft our energy and affect the recovery of the second quarter. " Zhou lichen pointed out.
"I heard a very interesting saying: the flow is like a ventilator. When you wear it, you feel very comfortable. When you pull it out, it will probably hang up. Focus on where new users come from, not where new traffic comes from. There is an essential difference here. Flow and commodity supply chain docking good, reached a deal, will become your user. "
Single brand management needs to tap the needs of users in all aspects
In terms of the idea of single brand management, Hailan home has two experiences in acquiring new increment: one is that for the same customer group, it should deeply tap the needs of other parties; the other is to do "joint brand" and cross-border marketing, which can not only have volume, but also have sales volume.
It is reported that at present, 50% of the online users of Hailan home are women (buying men's clothes), and the proportion of offline female users has also reached 40%. This change makes Hailan family truly realize that her economic era has come. As a result, Hailan home began to dig into the needs of female users, build a new supply chain system, and iterate commodities.
"We did a bold test and put in more than a million pieces of children's clothing at the end of last year. As a result, children's clothing sellers have been constantly replenishing orders. By the beginning of August, they have sold more than 1.5 million pieces, and it is expected to sell 2 million pieces by the end of the season, with a very high sell out rate. " According to Zhou lichen, the trial of children's clothing has invigorated many old female users of Hailan home. They constantly recommend friends around to buy children's clothing, because the children's T-shirt of Hailan home is very cost-effective, which costs 38 yuan and 58 yuan, and has the brand of Hailan home to guarantee its quality.
Children's wear makes users have a new connection with Hailan home, which brings impact inspiration to Hailan home. "It's not that I want to move into children's wear, but it lets us know that whether it's to activate old users or find new users, we still have to rely on new products to drive, relying on products that meet the deep needs of users." Zhou lichen talks.
In addition, in terms of cross-border and joint branding, Hailan family, which has gone through a detour, has begun to emphasize that "both sound volume and sales volume should be guaranteed". Zhou lichen pointed out: "joint brand must be sympathetic with consumers, otherwise, your consumers have no feeling for you, only feel that you are doing something with open teeth and claws. Secondly, the product design must conform to the temperament of the original user, and then add the co branding element, and can not compromise with the ideas of the co branding party. "
It is understood that in the second quarter of this year, Hailan home launched a joint brand product led by "Bruce Lee". In terms of consumer resonance, at that time, Sino US relations were tense, and the phrase "Chinese people are not sick men" in Bruce Lee's JingWuMen hit the user's point. Therefore, this co branded product became a hot seller once it was launched. In addition, this year's father's day, Hailan's home also jointly promoted Xiang Huaqiang and Zuo's father and son, with a sell-out rate of more than 80%, making a great contribution to the return in the second quarter.
Break the circle with new brands and new products
Multi brand management is also one of the growth strategies of Hailan group. In Zhou lichen's view, when the original brand can not grasp more new users, it is inevitable to do more brands. The incubation of new brands is closely related to user interaction and the creation of new supply chain system.
"For a fixed customer group of a brand, first of all, you have to meet their different needs. This is to dig deep into a single brand. There are a lot of different needs in this new world
Hailan home began to incubate women's clothing brands three years ago. On the one hand, it is optimistic about the potential of women's consumption. On the other hand, it also takes a fancy to the group of independent women. They have more and more voice and influence on the society. They need some brands to express their personality to express their voice and resonate with them.
It is reported that the online sales of the "women's TV series" in August this year only exceeded that of the Japanese TV Group in August.
"The brand has actually been polished for three years. Ordinary people don't understand that the brand is behind the Hailan home, and we will not deliberately enlarge it. Because ovv uses a new supply chain and a new team, which is totally different from our original system. This is a great test of an organization's ability to innovate and top-level design. " Zhou lichen pointed out to Yibang power.
In addition, in terms of multi brand strategy, Hailan group has acquired the high-end infant and children's clothing brand "Yingshi", launched the popular children's clothing brand "boys and girls", and incubated "Hailan optimization".
"The accumulation of new users will make brand power. If more people buy you, your brand power will naturally show up. This is an iron rule. " Zhou lichen said that in the past two years, Hailan home has a clear goal to upgrade the brand from the old image of "men's Wardrobe" to a real national brand. In addition, he does not rely on deep advertising and supply chain upgrading.
Private domain traffic should be strictly differentiated from offline traffic
In August this year, Hailan home launched the "cloud store plan" to obtain new traffic through all staff marketing. On the evening of August 19, the transaction volume of the online outlets small program activity of Hailan home exceeded 100 million yuan in the first two hours, and the Gmv of a single event exceeded 200 million yuan, setting a record of the highest transaction volume of a single event of clothing brand app.
"It's a big step forward for us." Summing up the experience of "cloud store plan", Zhou lichen pointed out that when analyzing the playing methods of many brands, it was found that the sales performance of many communities was only overdraft of the sales of other channels of the brand, and the total plate did not expand. After realizing this, Hailan house has made a strict distinction between the community and the offline in terms of goods and incentive mechanism. For example, it is forbidden for shopping guides to pull the customers of stores to the line for transaction, and only allow them to spread and publicize in their circle of friends and do natural diversion.
"We have prepared for 20 days to do an organized and disciplined activity, put the incentive mechanism in place consistently from top to bottom, and 40000 employees worked together to mobilize their relatives and friends to buy."
After this small trial, Hailan home saw the explosive power of private traffic. First, establish a sales channel based on the community, and then prepare suitable goods for this channel. And outlets small program and community communication has become a good way to explore new channels and digest inventory. "After all, it's hard to play too many tricks because our main brand is making a positive price." Zhou lichen sighed.