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vicky, who has run a clothing store in shanghai for many years, closed her offline store in july. "the contract expired and i didn't renew the lease." she said that the business in the store has been quiet for a while. at the end of last year, she closed her taobao store that she had run for ten years.

the reporter learned from some people working in the clothing industry that the traditional clothing retail industry's business was not doing well in the first half of this year. except for some large chain brands that were able to achieve some growth, many small and medium-sized businesses were doing well enough to break even.

from a macro perspective, the entire industry has only grown slightly. according to data from the national bureau of statistics, from january to june, the total retail sales of clothing products of units above designated size in my country reached 515.63 billion yuan, a year-on-year increase of 0.8%.

even uniqlo, which was once so popular that every programmer had one, has "lost momentum" in the chinese market. ken okazaki, cfo of fast retailing, the parent company of uniqlo, predicted at an earnings conference that the brand will face a decline in revenue and profits in the second half of the year in the chinese market. "(chinese consumers) have a low willingness to consume, and the product mix that meets local demand is not in place, so sales are struggling."

small and medium-sized businesses can no longer roll

vicky studied fashion design in italy. after returning from her studies, she did not work for a large company, but chose to open a women's clothing taobao store with her good friend. because of their precise product selection, they took advantage of the e-commerce dividends at the beginning and made a lot of money. two years later, they decided to open two more offline stores to increase customer experience and stickiness.

live streaming was popular in the past two years, and vicky also followed suit and did live streaming. however, her store had no organization to help it, so she couldn’t get any traffic. after trying many times without any results, she finally gave up.

vicky told reporters that it is generally acknowledged that the return rate of online clothing is high. in the past few years, the industry average return rate was 40%-60%. it depends on which platform you sell on. there will be some differences in the return rate of different platforms, but in general it is much higher than offline. since last year, vicky has found that the online return rate has begun to rise. in order to stop the loss, she completely closed the online store at the end of the year. "some friends in the clothing circle told me that the return rate of some of their stores has soared to 70% this year. in the live broadcast of women's clothing, the return rate is even higher. add to that various other costs, and the general ledger is not balanced." in addition, she also mentioned that a clause such as only refunding is also very hurtful to merchants.

based on vicky's observations of the industry over the years, she has found that consumers are becoming more and more "stingy." "when i first opened my store ten years ago, as long as the clothes were made of good materials and fashionable enough, there were still many people willing to pay for clothes that cost more than a thousand yuan. some customers would come to the store to shop, and if they were in a good mood, they would buy several pieces at a time, which was also a common thing." but in recent years, she has found that "expensive" clothes are not selling well, and clothes in online stores are generally getting cheaper and cheaper, and people seem to be more pursuing "value for money." "there are too many promotional activities on the platform, and small stores like us often do not participate, so we can get less and less traffic, and clothes are more difficult to sell."

it has become a recognized fact in the industry that clothing e-commerce is becoming more and more popular. earlier media reports said that this year, many taobao women's clothing stores that have been open for more than ten years have closed down. in july this year, taobao women's clothing store "the bubble", which has more than 400,000 fans on taobao, issued a closure notice, indicating that the store has entered the clearance stage. "sinking into the deep blue losvlue" store, which has 550,000 taobao fans, also announced its closure decision on social media platforms.

the domestic apparel industry is a trillion-dollar market. taobao, jd.com and other large e-commerce platforms entered the market early to share this pie. the rising tiktok is not to be outdone. in recent years, it has cultivated apparel merchants on its platform. but now, when the traffic is fading, some merchants who have reaped the benefits are starting to decline.

in early june this year, the women's clothing store "lora code", which has 5 million fans, stopped broadcasting and withdrew from the internet, and cleared all previous related videos. public information shows that lola code was established in 2016. the brand is named after its founder wang shanshan (loora lola). at first, lola code's business focus was mainly offline. in 2018, lola code saw the development potential of the online market and began to switch to the short video industry that year and entered the douyin platform. in 2019, live e-commerce was in full swing, and lola code officially started live streaming on douyin. in the following years, lola code entered the forefront of the douyin platform's clothing sales list, and successively won the first place in the douyin clothing anchor sales list and the first place in the douyin double 11 overall list.

established businesses seek new opportunities

according to data from the national bureau of statistics, from january to june, the total retail sales of clothing products in units above the designated size in my country reached 515.63 billion yuan, a year-on-year increase of 0.8%, and the growth rate slowed down by 14.7 percentage points compared with the same period in 2023. among them, the retail sales of clothing products in units above the designated size in april and june decreased by 3% and 2.2% year-on-year respectively. during the same period, the online retail sales of clothing products increased by 7% year-on-year, slowing down by 6.3 percentage points compared with the same period in 2023.

small and medium-sized businesses with limited financial resources are under pressure, while established clothing companies with sufficient financial resources are seeking opportunities in the slow growth.

many chinese companies are seeking opportunities to go overseas, including apparel companies. for a long time in the past, domestic apparel companies mainly went overseas for processing or oem, which made it difficult to gain a foothold overseas due to low profits and added value. but now, more chinese apparel brands are actively going overseas.

for example, semir clothing (002563) is also accelerating its overseas layout. its balabala brand opened 7 stores in vietnam in the first half of the year and entered the southeast asian e-commerce platform shopee. the semi-annual report shows that in the first half of this year, semir clothing's overall gross profit margin overseas was as high as 69.93%, higher than the current gross profit margins of 49.55% and 38.57% for children's clothing and casual clothing. from the performance point of view, the company has now reached a scale of tens of billions. in the first half of 2024, the company achieved operating income of 5.955 billion yuan, a year-on-year increase of 7.11%; and realized a net profit attributable to shareholders of 553 million yuan, a year-on-year increase of 7.14%.

domestic outdoor apparel is also one of the few tracks in the entire apparel industry that is still growing rapidly, and it is a subdivided track where many companies are competing to make money. zhou chengjian, the founder of metersbonwe, announced his return to the stage this year, and subsequently carried out a series of reforms at metersbonwe. after noticing the craze for outdoor sports, the company plans to transform from casual apparel to the outdoor track, and announced that it will implement a "big brand replacement" strategy, targeting arc'teryx, one of the "three treasures of the middle class". zhou chengjian also mentioned at a public event a few days ago that the company defines it as a "bird-catching strategy" and the product positioning is "affordable luxury". metersbonwe (002269.sz) achieved operating income of 414 million yuan in the first half of the year, a year-on-year decrease of 25.8%; net profit attributable to shareholders of listed companies was 76.7806 million yuan, a year-on-year increase of 648.07%.

however, whether deciding to go overseas or change track, ling fang, a senior person in the apparel industry, believes that it is not an easy thing, and the competitors in the future will only increase, not decrease. but on the bright side, in the current stock market, these two directions are still incremental, and the apparel overseas track and sports outdoor are currently in a golden bonus period.

the reporter noticed that with the overall industry performance being relatively flat this year, many companies no longer choose the aggressive strategy of "shooting high and hitting hard".

in a recent briefing, pan ning, ceo of uniqlo greater china, admitted for the first time that the "substitute" consumption trend has had a significant impact on the company. "the cost-effective consumption is particularly evident among the younger generation. under the consumption value of 'substitute', consumers no longer choose branded products, but choose more affordable products with little difference in quality." in order to cope with future challenges, the company's specific plan is to close loss-making uniqlo stores in the next 2 to 3 years and concentrate store openings in areas with more traffic and prime locations.

"this year, our main goal is not 'scale growth', but rather we will always maintain the guiding ideology of 'steady operation and pragmatic development'," qian wei, co-ceo of li ning group, said at a performance briefing.

(source: china business news, original title: "the aggressive store opening strategy of "high-profile" disappears, and the apparel industry enters a period of deep adjustment")