Shanshan and Youngor: Learn from each other and grow together

There is a very peculiar phenomenon in the domestic apparel industry: Both the Shanshan and Youngor have occupied the first and second place in the Chinese garment industry for a long time. The two big companies in the same city, similar development experiences, similar distribution channels, sales targets, made them once fierce competitors. However, the later development models of the two sides made the two develop independently and learned from each other. The two are more and more powerful in the competition.

Two entrepreneurs with different personalities

Shanshan and Youngor were once two very similar companies. They were the “leading” of Ningbo's garment industry. They were all born out of established garment factories. They started with the production of men’s clothing and even had similar time to market. However, because Two corporate bosses have different styles and the two companies have embarked on a completely different development path.

Mr. Zheng Yonggang, chairman of Shanshan: with a forthright character, likes a famous car and pursues fashion, decided to build Shanshan into a world-class enterprise; Youngor’s chairman Li Rucheng: with introverted personality and steady performance, he is determined to control the entire apparel industry chain and maintain his position in the domestic apparel industry. leading position.

Li Rucheng is an educated youth in Shanghai, and he is proud of his identity as a “farmer”. He believes that it was his “grassroots” trait that made him have today; Zheng Yonggang had been a soldier and liked people to call him a “fashion boss”. Some people hailed it as "Barton in the clothing industry." Li Rucheng wants to build the world's most magnificent and largest clothing production base; Zheng Yonggang's philosophy is to be the world's top brand; Li Rucheng opens stores in prime locations in major streets of most cities in the country, and plans to build more than 500 square meters of "flagship" stores; Zheng Yonggang did not do it himself, he let Others do franchise, the brand name of the agent Shanshan; Li Rucheng engaged in centralized management, one by one, formatting, institutionalization, Zheng Yonggang advocates inaction.

Steady and cautious, it became the standard symbol of Li Rucheng. Zheng Yonggang likes to take risks and eat crabs first. The Shanshan he led has become the “vanguard” of the Chinese garment industry in many ways: in 1990 he proposed the concept of intangible assets; he established the nation’s largest clothing market sales system in 1992; he proposed branding in 1994 and fully imported corporate image. Identification system; took the lead in reforming the system; in 1996 it became the first listed company in China's garment industry; in 1998, it established a world-class clothing production base; in 1999, its headquarters moved from Ningbo to Shanghai; in 2000, it entered the high-tech field; 2003 Since then, a multi-brand strategy has been introduced in the apparel sector. Rebellion, never satisfied to become the standard symbol of Zheng Yonggang.

Two different development models

In the mid-to-late 1990s, the scale and sales scale of the two companies reached a certain level, and latecomers have entered the apparel industry and market competition has intensified. Shanshan and Youngor, who are in the leading role, are facing the trend of slower growth and lower market share.

How to do? Shanshan and Youngor chose two very different roads.

Zheng Yonggang’s practice is to outsource Shanshan processing and use the hands of franchisees to separate Shanshan from sales and production. As a result, Zheng Yonggang severely stripped off the Group’s original production and sales network. He believes that the “one-stop production, supply, and sales” approach is a push-based operation, and is more suitable for a period of short-run economics; during the buyer’s market, it should be a pull-type operation, that is, the concept of design and the design of fashion products should be selected by consumers. . At the same time, Shanshan began to actively promote the "multi-brand, internationalization" strategy. On the basis of its core brand Shanshan, it has also successively developed, purchased or cooperated with foreign countries in more than 20 clothing brands.

At the same time, Zheng Yonggang believes that the clothing market has become increasingly saturated, with limited growth potential, and it has begun to transform into high-tech enterprises, and will be the key industry for Shanshan's future development. To adapt to this adjustment, Shanshan moved its headquarters to Shanghai. At present, Shanshan has four national 863 projects, including 18-micron copper foil materials, lithium-ion anode materials, heat-shrinkable materials, and high-temperature pressure sensors. In addition, there are 9 high-tech projects such as CO2 extraction, biological oxygen-consuming bacteria fermentation waste, nano-surface heating materials, super capacitors, and Auschwang materials. At present, Shanshan Group's cumulative investment in high-tech fields is about 1 billion yuan, and it has 13 high-tech companies. Shanshan's current business scope is: clothing, technology, investment, and clothing are just one of its three major segments.

However, Li Rucheng's approach is to seek "development at both ends".

Water intake to “upstream”: To control costs and further increase profit margins, Li Rucheng invested in the construction of Youngor Textile City. He believes that "the most fundamental thing is still to find a path that is original to oneself. Because the imitation of clothing is fast, but the imitation of the fabric must have a stage."

Controlling the "downstream" channels: According to statistics, currently more than 40% of Youngor's sales benefit from its own marketing network. "Accepting sales channels in their own hands is an important part of Youngor's development of the downstream industry chain of the garment industry." According to Li Rucheng, today's Youngor is not only a production company, but also a circulation company.

Li Rucheng adheres to the Youngor brand. Even if he does a lot of brands, he does not leave “Youngor”: he currently owns three Youngor brands of gold, silver and green.

Shanshan and Youngor have one thing in common, and that is diversification. However, even in the face of the same development needs, they chose two different directions: Youngor chose to be down-to-earth and “six-wheel drive”—clothing, textiles, foreign trade, securities, real estate, and infrastructure. The Shanshan is aimed at high technology.

Zheng Yonggang and Li Ru achievements have ushered in a "great turning point" in corporate development. From 1998, Shanshan took the initiative to lose the position of the first suit brand, China's first clothing brand, and China's largest textile and garment company. Younger expanded significantly during 1997 to 1999, maintaining its rapid growth momentum. On the basis of the first brand of shirts, the position of the first brand of suit and the largest enterprise of Chinese clothing was firmly controlled, replacing the position of Shanshan in the Chinese clothing industry.

Mutual influence grows in competition

Although Shanshan and Youngor have chosen different development paths, the two companies have always been you looking at me and I am watching you. The two companies compete with each other and learn from each other, especially when one side is doing better, and the other will follow. It can be said that both sides also influence each other. In many aspects, they can see each other's shadow.

Shanshan was first listed in the apparel industry and raised a considerable amount of funds for the development of the company. Youngor immediately applied for listing. Shanshan eliminated outdated equipment, introduced advanced equipment from the world, built the country’s most modern garment processing base at that time, and realized informationization within the company. Youngor also kept up with it and built a larger clothing city. Shanshan hired Japanese and Western managers or chief workers and cooperated with big foreign companies. Youngor did the same.

Li Rucheng adhered to Ningbo, operating real estate outside of clothing, circling a large area of ​​land, and building the country's largest textile industrial city and clothing city. At present, Ningbo’s largest real estate company and international trading company both belong to Youngor, whose profits have already accounted for 60% of Youngor’s total revenue. The Shanshan branch, which has moved to Shanghai, sees this and feels that his hometown cannot be abandoned, so he kills “ "Back to the carbine", the Shanshan Science and Technology Park was built in Ningbo and a local foreign trade company was also acquired. Youngor insisted on making clothing bigger, and Shanshan changed its clothes from once, to "never give up the clothes."

Of course, the two CEOs also tried to avoid making mistakes. It can be said that if the other party is doing well, it will be beneficial to the company, and the other party will follow it. On the contrary, it will learn as much as possible. The two bosses were once the vice presidents of the China Garment Association. For example, when confronted with anti-dumping, the two parties have also joined forces with one another; for example, both parties cooperate with Japan’s Ito Tengzhong... In a sense, this is also one of the important factors that Shanshan and Youngor’s competition with the city can grow together.