Clothing prices all the way up the new round of brand shuffling will begin?

Rising raw material prices, rising energy prices, and rising labor costs... Clothing prices seem to have to rise. Starting from December 2010, the consumer price of clothing consumer reported by the National Bureau of Statistics ended the continuous negative growth from the same period of the previous year since April 2007. Since February 2011, it has continued to increase for several consecutive months, and the increase has continued to increase. Which rose in June to 2.1%, the first half year-on-year increase of 1%. The average unit price of apparel sales of the 100 major large-scale retail enterprises in the country as measured by the China National Business Information Center also showed an accelerated growth compared to the same period of last year. From January to June this year, the average unit price of apparel rose by 17.3% year-on-year, which is the same as that of the same period of last year. 12.1% accelerated by 5.2 percentage points. Despite rising inflation, prices have become a common phenomenon, but the growth rate of residents' disposable income is far less than the price increase. As non-food products, all kinds of clothing prices have risen. Will it help sales? Whether the price increase is the beginning of a new round of brand reshuffle?

Sports brand collective price increase From the end of last year to the beginning of this year, sports brands have initiated a wave of price increases. In recent days, the second wave of price increases has spurred on. Judging from the fourth-quarter ordering meeting of the sports brands that have been held, sports brands still have an average double-digit increase.

Li Ning Company announced in advance that the price of footwear products will increase by 7.8% in the fourth quarter and apparel will increase by 17.9%. Similarly, Anta, Xtep, Peak and 361 degrees at the end of the market for the ordering meeting, the product price is also "up one." Among them, the situation of 361 degrees is close to that of Li Ning. Xtep winter trade show data show that the ring than the previous order, the order amount increased by 27%, while the footwear and apparel prices rose by 10% and 17%. When Anta announced the price increase for the first time this year, ANTA ** Ding Shizhong once stated that “the annual increase is not expected to exceed 10%”. At the time of the announcement of the fourth quarter of 2011 trade fair data, Anta evaded specific figures, saying only that “the average selling price of sports shoes and apparel also had a double-digit increase over the same period last year.”

For this price increase, industry sources said that the first price increase, the product is spring and summer equipment itself, the price base is low, consumers feel is not obvious. The price of winter clothes is more expensive, and the increase is more than double digits, reflecting that the terminal will be very clear.

The price of luxury goods has risen again. At a time when parties have disputed whether to reduce taxes on luxury goods and high-end consumer goods, recent major brands have invariably raised their prices.

This round of price increase is led by the high-end cosmetics Estee Lauder. It is understood that some products, including Estée Lauder, Clinique and other brands from the July 1 price increase of 5% -8%. At the same time, Cartier, Rolex, and LV, PRADA and other luxury brands have also joined the list of prices. This is also the second round of price increase for luxury brands this year. At the beginning of the year, luxury products including LV, Chanel, and Hermès have already raised prices for some of their products. This time, more brands including high-end cosmetics, leather goods, and watches have chosen price adjustments.

According to an insider from Estee Lauder, the price adjustment is not a global price increase for the company’s products. Different countries will adjust it based on local market conditions, but it is not clear whether other countries have recently raised prices. According to reports, the current pricing decisions for luxury goods and high-end consumer goods are not just considering the consistency of prices in all markets, but will be based on different markets. If LV has a system of price adjustment based on different markets, Burberry has a global pricing framework. On the premise of ensuring that the overall profit target can be achieved in the end, each region can give an opinion based on the benchmark assessment to final pricing.

Before half a month ago, the Ministry of Commerce announced that it would cut tariffs on high-end consumer goods to narrow the apparent spread of such products at home and abroad. In 2010, the overseas purchasing market with cosmetics and luxury goods reached a total of RMB 12 billion. At present, in the case that most of the major international high-end consumer brands have landed in China, a large number of consumers also take “shopping lists” to airport duty-free shops, Hong Kong, China, or Europe and the United States to buy. The direct reason behind this is that the domestic price of the same goods is obviously higher than that of foreign countries. The Ministry of Commerce has made a statistics of 20 kinds of high-end consumer goods such as watches, bags, clothing, wine and electronic products. The selling price in the Mainland is about 45% higher than that in Hong Kong, 51% higher than that in the United States and higher than in France. 72%. Too high a comprehensive import tax rate is one of the main reasons for the spread of high-end consumer goods at home and abroad. Take cosmetics as an example, the import link must pay 30% of consumption tax, 17% of value-added tax and 10% of tariff. Therefore, the Ministry of Commerce will reduce the tariffs on mid-to-high-end goods, among which cosmetics and high-grade tobacco and alcohol varieties will go ahead. It appears to the industry that the purpose of the government's tax reduction is to keep consumption at home by narrowing domestic and international price differences.

The general increase in the spread of the phenomenon in June, the national consumer price level rose by 6.4% year-on-year, a record high in three years. Clothing prices rose 2.1% year-on-year. Among them, clothing prices rose 2.3%, and shoe prices rose 0.5%. In shopping malls, thousands of dollars of T-shirts and dresses can be seen everywhere, indicating that high prices and discounts have become a promotional method that shopping malls and brands agree with. The discount is certain. After the price increase, the same discount is used. For the common people, the price is higher than before. Even cheap fashion brands, such as Uniqlo, could buy a pair of trousers for 99 yuan last year, and the cheapest one this year would have to be 149 yuan, an increase of nearly 50%. In Nanjing, such as the “nurse owners” like the Kowloon and other foreign trade malls, brand cut T-shirts also exceeded 50 yuan, and last year, 30 yuan can basically be.

Wang Baokui owns his own brand Tengguan shirts, which are mainly sold through supermarkets. A shirt costing about 20 yuan, the price in the supermarket is about 120-130 yuan. Compared with last year, the price of each shirt this year was raised by about 15 yuan, or about 15%. But when it comes to profits, he said that it is now barely about 6%.

“Our branded apparel has also adjusted its price. According to different varieties, the unit price has been increased by about 10-20%. In fact, the hard cost increase is well known, but for branded apparel, it can still be partially digested through internal management. The fundamental reason for the price is that everyone has gone up. We have to maintain the image of the brand and give it an account of the shopping mall, so we have followed up,” a manager of a certain brand who declined to be named told reporters. His brand clothing currently has a good sales performance, positioning fashion casual, mid-range price, brand development is in the rising channel.

The reasons for price hikes in reverse are the reasons for the price increase. In fact, the reasons for the increase in prices are raw materials, energy, logistics, and labor costs. The increase in the unit price of clothing should be justified in the title. For some low-cost clothing, rising costs will inevitably drive up prices. In Wang Baokui's view, rising labor costs are an important factor driving up production costs. Following the announcement of the increase in minimum wages by many provinces and cities across the country last year, the cost of labor for ordinary enterprises has risen rapidly this year. Take Hangzhou as an example. After the new adjustment on April 1st, the monthly minimum wage rose from 1,100 yuan/month last year to 1,310 yuan/month, an increase of 210 yuan, or close to 20%. The general manager of Hangzhou Hongxin Clothing Co., Ltd. began to stock fall winter down jackets. This year's labor price is between 65-120 yuan/piece, and the average level last year was 45-80 yuan/piece. The cost of a down jacket with a price of RMB 1,000 is roughly around RMB 300. Based on this calculation, the labor cost accounts for about 1/3 of the total cost. In addition, there are raw material costs and logistics costs, rigidly rising costs, making basic prices of low-cost clothing become inevitable.

However, just as the cost is never the real reason for the price increase of luxury goods, the mere cost increase for branded apparel is not the exact reason for price increases. In general, product price = production costs + R & D costs + marketing costs + sales costs + management costs + exchange gains and losses + reasonable profits + brand premiums. For luxury goods, the reason for the increase in prices is more to maintain the fundamental attribute of high prices, which is the spiritual value of luxury goods. “Rising prices are in line with the brand strategy of high-end consumer goods, and these brands need to maintain a constant climb in prices to ensure their high-end quality, while the slower prices will be eliminated by the market,” said Gao Jianfeng, managing director of Bogey Consulting. Cai Sujian, chief executive of China’s luxury goods association, also believes that in the face of China’s rising consumer spending power, high-end consumer goods companies need to maintain their high-end positioning through regular annual price increases, “a low-priced brand will become a mass consumer product”. .

This is the reason for the price increase of luxury brands. In fact, there are similar reasons for the increase in the prices of some branded apparel. In general, about 30% of the gross profit of a well-operated branded apparel is not significant. However, branded clothing has its own positioning, and has its own position in the price division of the brand-name clothing industry. In order to maintain this status, it has become the choice of these brands to follow the price increase. "Other brands have increased prices. We cannot raise the price and we will misunderstand that we will save money in the use of raw materials. This will inevitably lose consumers who have become brand audiences," said a brand manager.

As the above mentioned, the price of a shirt priced at 120 yuan is more than 20 yuan, and the price of a down jacket with a price of 1,000 yuan is 300 yuan. It is a well-known fact that the ex-factory price of clothing is far away from the market price. The various links that push up the final price are also an old topic.

The operating system of the demerit points of shopping malls has made it necessary for apparel brands to consider the requirements of shopping malls, and it is inevitable that prices will follow the trend. In addition, the multi-tiered agency system that has been formed over the years has also allowed a garment to go from factory to counter, and has undergone multi-agent sales in the middle, and the gross profit growth at each stage is currently around 15%. Regional agents are also required to bear the pressure of inventory, plus deduction points and promotional expenses of shopping centers, may increase their purchase prices into retail terminals. “From the perspective of the asymmetric relationship between businesses and enterprises, malls are the ultimate winners. Shopping malls often hold promotions and price reduction activities. These discounts must be paid by the brand, and do not raise the price. The profit rate will be affected directly. The increase in inertia is about 30%," said one woman's brand designer working in a shopping mall.

In this way, a shirt that went out of the factory for only 30 yuan may have turned into a 40 yuan in the hands of a provincial agent. When it comes to city level agents, the price has risen to 60 yuan. However, at what price they will be bought by consumers, it depends on the retail terminals that these garments eventually reach. According to industry insiders, the price increase is ultimately determined by the brand's popularity: “General brands may increase their markup rate by about 5 times (ie, purchase price×6), even well-known brands may reach 10 times, and international top brands may be up to several times.” In addition, different retail terminals will also affect the fare increase rate. For example, the retail price of a general community mall is lower than that of a downtown business district.

The price rises, and the volume also rises?

Under the influence of inflation, clothing prices have risen. How is the sales volume? According to the statistics of the China National Business Information Center, in the first half of 2011, the retail sales of all kinds of major retail enterprises in the country increased by 6.86% year-on-year, a decrease of 6.81 percentage points from the same period of the previous year, and the decline rate was relatively large. Among them, 5-6 continued to grow at a low rate for two consecutive months, and the growth rate was only 0.86% and 1.23%, which was 15.53 and 14.24 percentage points lower than the same period of last year. Importantly, although the year-on-year increase in apparel retail sales was basically the same as that of the same period of last year, the increase in retail sales was mainly due to the increase in average unit price.

Recently, Li Ning, who blew up in sales and profitability in the first half of the year, has been widely questioned about the price increase. The question is whether “whether the price increase will help increase the sales amount and whether consumers will continue to pay for their sales”?

"Costumes are not necessarily purchased every day like food, prices go up, they are bought less, or they are surfed on the Internet." This is the view that reporters have heard most in recent interviews. In some shops that do not have an activity store, shoppers are obviously rare. Although some counter sales staff are unwilling to disclose specific figures, their expressions of helplessness and confession of “more hard-selling sales” indicate the difficulty of increasing sales now.

Ma Gang, a well-known sports brand observer, believes that the new round of price increases will only harm more than profits. The reason is that many domestic sports brands target the middle-class consumer groups, and this part of the population is more sensitive to price increases and decreases. While domestic brands raise prices, they also sell some middle and low-end markets. The result of price increases will undoubtedly increase the difficulty of marketing.

On the one hand, brands follow inflation to stabilize or enhance brand grades through price increases. At the same time, due to inflation, consumption is declining, and more efforts are needed to increase sales. This has become a contradiction, and the so-called, the price rise is not rising is the brand's business, increase in volume does not increase but consumers. Of course, when the equivalent price does not increase, the price increase can also maintain the brand's interests, and there are also brands that are in the rising period to obtain greater profits. However, how can we continue to gain the trust of consumers and maintain our loyalty to the brand during this period of inflation? Can a simple inertial price increase be achieved?