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Attention: How To Break Through The Recession Trap For Middle And Small School Uniform Enterprises?

2021/9/16 13:52:00 6

At the beginning of September, the primary and secondary school campuses became Wang Wei's "battlefield", which was the business peak of the year. He led a team of 30 people to serve more than 40 schools in a prefecture level city in Sichuan Province, with nearly 40000 students. Although he worked an average of more than 10 hours a day, when boxes of school uniforms were delivered to school, he confessed that the children's laughter when unpacking was a consolation to him.

Eight years ago, Wang Wei helped his father run a clothing factory in the local area. He provided traditional sports school uniforms to dozens of surrounding schools. He also took on some professional clothing processing business. The factory covers an area of 2000 square meters and employs more than 20 workers and dozens of seasonal and daily settlement workers, with an annual turnover of 3 million. School uniform is a good business compared with the OEM business, which has a thin profit. On the one hand, the school students grow steadily; on the other hand, they usually pay the school uniform payment in advance to start production. However, affected by the quality storm of Shanghai school uniform in 2013, Wang Wei, who took over the class, began to think about how to serve these old schools well under the current situation of serious homogenization of sports school uniform products, higher and higher school administrative requirements, and almost unprofitable prices? By chance, Wang Wei came into contact with a fast-growing brand operation school uniform enterprise in the industry, the differentiated international school uniform style, and the ability template for building proposals around the campus, which made Wang Wei's eyes shine. There are two main reasons why he decided to become a local partner of the brand: first, if students can be well guided to wear properly, the inventory will be borne by the brand; Second, his clients have been served by themselves all their lives, which dispelled his biggest worry.

In 2014, Wang Wei disbanded his home factory and left more than a dozen employees employed all year round. Although he was reluctant to give up, it has been proved that he made a wise decision to quit during the recession period of the "face pocket" school uniform, obtained the recovery of net investment as much as possible, and seized the opportunity to enter the emerging field. After signing the cooperation agreement with the brand, he only prepared some regular styles for the regular supplement and retail, while the group purchase products for campus were sent out by the brand distribution center. Now, with a team of 30 people, he focuses on the promotion of standard school uniforms. The business scale has grown more than ten times in five years. With the help of the brand, the schools that did not have the opportunity to serve in those years have successfully become their customers. The annual sales volume of more than 40 schools he serves has reached 35 million. In addition, Wang Wei rented 2000 square meters of factory buildings, and also had a "passive income.".

king Business growth after seven years of Wei transformation (unit: 10000 yuan)

Compared with the headmasters he served in the past who were too busy to answer questions, Wang Wei now often wanders around the school gate to see if there are any problems with the students' clothes. He also takes the etiquette tutor into the school to give students a lesson in campus etiquette. At the beginning of 2020, he participated in the "campus protection" campaign initiated by the brand, and donated protective materials to the customer schools with shortage of materials. Every month, he will deliver new education magazines and invitation letters for educational conferences to the school for free. Gradually, in the eyes of many principals, Wang Wei has become a person who "can talk and understand some education", rather than a humble "son of the boss of school uniform factory".

In the recession period, we should adopt the strategy of reducing the cost and promoting the value

Michael Porter, a master of strategic management, describes in detail the competitive strategy in the declining industry in his book competitive strategy. The so-called declining industry refers to the industry in which the sales volume of products has declined absolutely for a period of time. Technological Substitution, changes in population and demand are the main reasons for the decline.

As far as the school uniform industry is concerned, the traditional "face pocket" school uniform industry has shown the characteristics of decreasing market sales, reducing product types, reducing research and development costs, and reducing competitors. If an enterprise is forced to transform or withdraw, it will face labor placement costs, unavoidable structural inventory costs, and the risk of contract breach with upstream and downstream. In the face of transformation, the operators of traditional school uniform enterprises are proud of their own achievements and uneasy about the future. They should plan the path in advance and reduce the exit barriers as much as possible.

At the same time, Porter put forward the strategic choice to deal with the declining industry

Source: competitive strategy (by Michael Porter)

For the traditional sports uniform, it is highly discrete distribution, and there is no big competitive advantage between each other. In the recession period, according to the model, we should adopt the strategy of reducing the cost, promoting the value or transforming the capital. Compared with the abandonment of assets, the cost reduction and value promotion pay attention to the controlled withdrawal of investment, the contraction of its own value chain, the focus on the advantages of enterprises, the understanding of the changes in the competition pattern and environment, and profit from the relatively centralized advantages (such as existing customer channels). The overall textile industry will face the situation of sluggish international market demand and unstable domestic economic recovery for a long time. The prices of raw materials and bulk commodities have increased significantly, exceeding the recovery degree of the end market. The normalized risk pressures such as structural labor shortage and rising comprehensive costs are still to be resolved, The sports school uniform industry, which originally had a meager profit margin, is facing an inevitable decline trend.

Population is also an important factor in the decline of the industry. The number of births in China will show an obvious downward trend in 2020, which means that the number of people consuming school uniforms will inevitably decrease in the next five or six years. The survival space of small and micro enterprises is further narrowed, and large enterprises with brand competitiveness, strong capital and technical foundation have a greater chance to survive in the industry reshuffle.

Source: wind, Huatai research

Avoiding the trap of "war of attrition" and becoming a local leader is the key

Since the beginning of this year, covid-19 has continued to evolve globally, with local rebounds in many places in China, and the uncertainty of market recovery has increased. In August, the state issued the Interim Measures on rewards for reporting major illegal acts in the field of market supervision, encouraging the public to actively report illegal acts in various fields of market supervision, rewarding 1.4 billion people and supervising 140 million market entities. As a subdivision field with livelihood attribute and "significant social impact", the school uniform industry will have an impact on operation in a short period of time, The energy of the core management in business is likely to be forced to transfer to law, compliance and communication. Compliance costs and compliance risks will rise sharply. The industry reshuffle will accelerate, and many enterprises will even "clear overnight".

In March 2019, a proposal on promoting the supply of high-quality school uniform and eliminating inferior school uniform caused heated discussion. The proposal proposed to establish a fair "game rule", give full play to the decisive role of the market in school uniform configuration, create a fair and open business environment for school uniform, and enhance the educational function of school uniform. As the proposal exceeds the social influence of 300 million netizens, the relevant departments clearly stated in their reply that they would coordinate with the national market supervision and management department, focus on supervising and guiding the cleaning up of school uniform management policies and measures, abolishing and revising the provisions concerning local protection, designated transactions, and illegal intervention in market regulation price levels; And supervise and guide the school uniform authorities at all levels to strictly review the newly issued relevant policies and measures in accordance with the opinions on establishing a fair competition review system in the construction mentioned in the market (GF [2016] No. 34), so as to prevent and eliminate the competition in the school uniform market.

Especially in recent years, in addition to the busy teaching management affairs, principals all over the country have a heavy responsibility of "safety responsible person". The normalization of prevention and control forces changes in the education scene. Educators pay close attention to the campus safety management on one hand, and try to combine online and offline teaching on the other hand, so the pressure of "one post with two responsibilities" is doubled. Under the intensive education policy issued in 2021, "double reduction", five management and five education at the same time also put forward new challenges for educators. These practitioners of education peripheral industries also put forward the requirements of understanding and insight into the changes of education. In the process of creating value for Chinese campus, they should avoid the battle of consumption, and co evolve with schools to achieve sustainable development.

Can we survive in the accelerated industry reshuffle, or even become a local leader?

How to get out of the shadow of inventory and get profit with cash flow?

How to maintain and even double the value of the market and customers each year?

Can we jump out of the vicious circle of low quality and low price competition and enter the new blue ocean?

How do school uniform business owners cross the trust gap with the school and gain respect and recognition?

Only by answering the above questions can the owners of school uniforms have the ability to turn crisis into opportunity and break the recession in an uncertain era.

(Wang Wei is not his real name)

In order to help small and medium-sized school uniform enterprises carry out active changes in the complex and uncertain times, On September 27, Seminar on "promoting supply side reform and building a GONGMAO ecosystem" It will be held in Nanjing. Industry experts, Eaton Gide school uniform brand and other units will communicate with the participating enterprises on the pain points that perplex the industry, learn from the experience in the discussion, consult the enterprise strategy, and take the initiative to attack in danger.