Clothing industry personalized foreign coat is no longer beautiful

Once portrayed as a "false foreign card," Baozi was caught in a business dilemma and it seems to indicate that the brand's survival is difficult. Some so-called "foreign brands" began to take off their "foreign" coat under the new consumer environment and explore under the framework of national brands.

Baozi Business Transfer

Baozi mentioned in the announcement that it will withdraw from the company's traditional fashion and apparel business and shift its strategic focus to the Chinese economy-related industries that are expected to bring better returns to shareholders.

A few days ago, an announcement made by Baozi Fashion, a leading high-end women's fashion company, caused an uproar in the country. On June 1, the company announced that its wholly owned subsidiary, Ports BVI, will sell 20% of the existing fashion and apparel business, Ports HK, for 600 million yuan to Oriental Fuhai. At the same time, Dongfang Fuhai will conduct a due diligence on the company and will also introduce the third party buyers to purchase the remaining 80% of Ports HK's shareholders' equity.

According to the information, Ports HK currently holds 100% equity of Haomei Apparel (Xiamen) Co., Ltd. directly or indirectly, 100% equity of Century Baozi (Xiamen) Industrial Co., Ltd., 100% of Baozi Fashion (Beijing) Co., Ltd., and Xiamen Ports Fashion Co., Ltd. 100% equity of the company, 100% of Xiamen Dibai Clothing Co., Ltd. It can be said that Ports HK holds all of Portsight's domestic clothing and apparel business.

Baozi’s move was interpreted by the outside world as that it will fully use its apparel business in China. In addition, Baozi also mentioned in the announcement, "We will withdraw from the company's traditional fashion and apparel business and shift its tactical focus to the Chinese economy-related industries that are expected to bring better returns to shareholders."

Although Baozi’s official response later claimed that the above measures were to pave the way for the privatization of Baozi and may be listed on the domestic A-shares, the continuous decline in its apparel business has become a fact of no dispute. The financial report shows that although Baozi’s turnover remained at a level of 2 billion yuan from 2011 to 2014, there was no significant decline, but its total profit and net profit attributable to shareholders continued to decline, and a serious decline occurred in 2014. The previous 400 million yuan and 300 million yuan fell to 170 million yuan and 0.73 billion yuan.

An expert who declined to be named said that as a brand originating from abroad, the recession is inevitable after the Chinese market has experienced glory. She believes that Ports’ recession in China is related to the rationality of Chinese consumers’ perceptions. Prior to this, consumers’ attention to the brand has shifted to focusing on cost-effectiveness, personalization, and fashion. Compared with the same price brand, Portsill does not have an advantage in design.

For its "false foreign card" question, Baozi has responded that it is a complete foreign brand. It is understood that Portsuit was founded in Canada in 1961 and was acquired by businessman Chen Qitai in 1989. After that, the headquarter was located in Xiamen, Fujian Province, and the business center of gravity was also transferred to China. In 1993, Portsuit opened its first boutique in China, and later began to expand in China, while the foreign market is mainly used to enhance the brand image. Baozi mentioned in its 2014 annual report, "The Group's main business area is Mainland China." Data shows that in 2014, the main business income of mainland China was 1.733 billion yuan, accounting for 92.22% of the total, which was 12% lower than in 2013.

"Fake foreign card" dispute

As more and more consumers begin to pursue differentiation and individuation, the so-called “foreign brands” in the “middle and high-end” markets are also being replaced by the concepts of originality and ethnicity and become consumers’ choices.

In recent years, there are also many brands that have encountered the "false foreign card" question. It is understood that Montagut, JEEP, Camel, Valentino, PLAYBOY, MO & CO, Eurotime, Latosca and other brands have been accused of being "false foreign brands." Some people have summed up the "false foreign card" and believe that the "false foreign card" in the usual sense is mainly reflected in domestic design, production, and sales, and it is Westernized in its name, propaganda, and registration place so that consumers can Form the impression of "foreign brand".

In addition, the person in charge of a women's clothing company explained to the China Daily News reporter that in fact, the “false foreign brand” is a folk concept and there is no official official title. He believes that in the strict sense, many of the companies on the market currently considered to be "false foreign brands" are not. For example, "Portzuit", although it is absolutely controlled by the Chinese people, the main production and consumption is also in the country, but its actual registered address is abroad.

However, Su Yanyan, deputy director of the Office of Brand Work of the China Textile Industry Federation, believes that the existence of "false foreign card" has its profound social background. After the reform and opening up, Zegna became the first clothing brand to enter China. It is located in the Wangfu Hotel's store, the price of thousands of yuan, and the fact that it is highly supported. This has led many Chinese clothing companies to see business opportunities. In order to obtain more lucrative profits, many factories in China with rich clothing production experience began to set up their own brands and hooked them up with the Chinese government to become China’s manufacturing “fake foreign brands”.

At the same time, Su Yuyan said that the deeper reason behind the creation of the “false foreign brand” is that domestic consumers prefer the propensity of foreign brands to consume. At that time, foreign garment companies entered China, and their novel clothing designs made it possible for Chinese consumers who did not have much clothing style concept before. Moreover, with these apparel fashion companies entering China, there are numerous fashion consumer magazines that have improved the Chinese people's aesthetic standards.

However, with the development of economy, more foreign brands have entered the market. The collision between the so-called "foreign brands" is inevitable, and it also gives more consumers the chance to re-understand the brand.

As more and more consumers begin to pursue differentiation and individuation, the so-called “foreign brands” in the “middle and high-end” markets are also being replaced by the concepts of originality and ethnicity, becoming more and more choices for consumers. At the same time, under the new consumer environment, original brands, independent brands, and apparel products have become the main force for more and more companies. The so-called “foreign brands” have also begun to move closer to this direction.

However, Su Yuyan also believes that at present, Chinese consumers still lack self-confidence in national brands, and still some people have the ethos of advocating foreign brands. This also requires national brands to enhance their own strengths and compete with “foreign brands” in the context of the new consumer environment and the downward adjustment of import apparel tariffs.