Spanish clothing Chinese businessmen encounter a dilemma for low-cost foreign opponents

In July, the traditional tourist season and discount season in Spain, Chinese businessmen engaged in the clothing shoe and shoe industry can often make a steady profit. This year, in the face of hot weather and busy people, many Spanish Chinese merchants have been bashing their heads because they have met the real opponent, Primark, a multinational chain of cheap ready-to-wear retail stores.

The store is open and full open, all shops are in the center of the city, 6 pairs of cool leather shoes, 7 European men's jeans, 2 European new T-shirts. Chinese businessmen who have been accustomed to their own battle for decades have discovered this. In the summer, their business plummeted because of this larger, newer, cheaper foreign rival.

Fight back, or sit still? In July this year, on the streets of Madrid, a commercial battle with red bayonet was officially launched.

2 Euro t-shirts, Primark sold crazy

In the center of the amusement park near Barcelona’s DIAGONALMAR subway station, Primark's big sign can be seen across the street. The store is very large and crowded. The bright clothes are displayed on rows of shelves. The price tags are cheaply inserted into the piles of clothes. 6 euros of cool leather shoes, 7 euros of jeans, and 2 euros of prints. T-shirt...

Picking up a T-shirt touches it like a stall, with rough stitches and cheap clothing. Young people, Indian aunts, blacks, and Eastern European immigrants lingered at the store, lined up at the entrance to the dressing room, and held many Indian immigrants at the checkout.

Many local Chinese businessmen told reporters that since the opening of the multinational cheap ready-to-wear retail store originating in Ireland at the beginning of this year, their business has been greatly affected: “Shopping malls are specially selected for crowds, excitement and traffic in downtown areas and tourist attractions. The large regions are opened and the goods are between 2 and 10 euros. They are very popular with immigrants from India, Eastern Europe, Latin America, and lower-middle-class people in Spain. They were originally our regular customers."

“I bought a bright white snakeskin bag of 6 euros at Primark. It was fresh for a month because it often took the bag over my head when it rained. The handle of the bag quickly turned yellow; I bought a one euro. The thick cotton home trousers, off the line off the hair, cutting can not be conciliated method ... ..." International students told reporters, although the quality of Primark clothes is very general, but every time passing, she could not help but go shopping a lot. “The first two days I was just going in. I couldn't control it anymore. I bought a bunch of underwear, a camouflage trousers, a black skirt, a black vest, a pink plaid long shirt and short sleeves. Black shirt, plus 6 T-shirts of various colors, the total price is only 90 euros, less than 900 yuan, too good!”

Chinese businessmen exclaimed: "Price is lower than our purchase price!"

Not just Barcelona, ​​such shopping scenes have also taken place in every Primark in each major Spanish city in recent months. Overnight, it has become Spain's most crazily cheap clothing retail store.

"To be honest, Primark's goods are really cheap, and quality is sometimes better than Chinese goods, so it grabs most of our business." Ms. Liu, a salesperson at a Chinese clothing stall in the wholesale market in Barcelona, ​​told reporters that even now they are more enthusiastic. Greetings, many guests turned left after the inquiry.

"This foreigner clothing store is really powerful, low prices on low prices, actually lower than our wholesale price, this opponent is really difficult to deal with." Mr. Zhang, a Chinese businessman who has been engaged in the clothing industry for many years in the wholesale market in Barcelona, ​​gave a report to the reporter. An account: "A pair of leather beach shoes sells for 20-40 euros in a brand-name store and sells at least 8-15 euros in a hundred-dollar shop opened by Chinese people. The profit has been well below 1 euro, but at Primark, retail The price is only 6 euros! In front of them, China has no advantage in manufacturing..."

“I can clearly smell a signal that the Spaniards are learning our low-cost strategy. It may not be long before they will occupy our living space. This situation is already imminent because it is compared to our clothing. Spain’s clothing has its own advantages.” Mr. Chen, a Chinese businessman who has been in the clothing business in Barcelona for over 10 years, analyzes that the advantage of Chinese goods is price, and the advantage of Spanish goods is quality. The advantage of Chinese goods is to squeeze out by cutting corners. The advantage of Spanish goods is that even if they are sold cheaper, quality and style are guaranteed. "One more thing is that their costume designs are more suitable for Spaniards. If they are similar, they are only 1/4 higher than ours, then our days are not easy."

Low price mystery, quantity or bluff?

In the summer of 2010, Primark has become almost a common topic discussed by Chinese garment manufacturers in all clothing industries. Everyone is speculating that the rents in the shops in the city center are so high that the clothes are sold at such a low price. In the end, what does Primark earn?

“This is just like the two-dollar shop that the Chinese operated in Spain before. Seeing that the price is cheap and earning money, the Spaniards followed suit and other local immigrants followed. Now, as the economic crisis intensifies, merchants’ commodity management becomes cheaper. It's already a big trend. A Primark mall can't explain anything. It's normal," said Mr. Liu, who works for a foreign trade company in Barcelona.

“I visited the mall a few times and found the surrounding chain stores, like ZARA, MANGO and other brands, and the customers in the store were attracted.” Mr. Chen, a Chinese businessman in the wholesale market in Barcelona, ​​told reporters, “In fact, the industry Whether it is profit or loss, only they know. There is a speculation that Primark may not make money from the interests of the business, but the store is open and it cannot be closed immediately."

“The reason why a large-scale clothing retail store like Primark can be blossomed everywhere is nothing more than the backing of a powerful economic group behind it, so that 'prices can be priced.'” Mr. Yao, owner of the clothing store, said.

“Actually, the reputation of this shop is not good. The British media reported that its Indian suppliers were accused of using child labor and cheap illegal immigrant labor news. After all, it is also the use of cheap labor in third world countries to reduce costs. The Chinese businessman in Valencia, Zhong, told reporters.

A dilemma for Chinese businessmen, is this wounded or sit still?

Because of the ignorance, so more suspicion. It is also worth noting that, in the aftermath of the economic crisis that took place over the past three years, Spanish Chinese businessmen are actually vulnerable. In order to survive, Chinese businessmen have come to use the price of "stabbing knife".

Susan, who opened the clothing wholesale store in the FUENLABRADA warehouse area, said that his shop is very close to the trend in Europe and the United States, so the business is very good, so that the surrounding colleagues are envious. As soon as new goods arrive in her store, there will always be people who come to her shop to borrow clothes and understand clothing styles, fabrics, colors, and prices. Then imitate these styles to ship, and also deliberately lower prices for sale. As a result, everyone's profit margins are getting less and less. In the end, they can only "make money and drink."

At this time, Primark, who was at the forefront of the war, used the low-cost strategy that Chinese businesses depend on to attract customers, and established a new business model and Chinese fights that resulted in Chinese businessmen’s price war. Disappeared.

“As far as price competition between Chinese and Singaporeans is concerned, it is impossible for Xu Huaren to have a low price. Will it become an 'Laoyang'?” Now foreign companies have similar examples, and they have even gone too far. Primark may have a cheap purchase that no one else has. The channel may be the one that "wounded the competitor" to defeat the competitor. Anyway, after all, the Chinese used to do a 'first day', and the foreigner also began to have a 'fifteen'!" Mr. Zhong of Valencia told reporters.

When the Chinese businessmen who go it alone have faced the menacing and wealthy Primark, is there really no chance of winning? Mr. Zhang, who runs a clothing chain in Madrid, gave a more beautiful answer.

Mr. Zhang’s chain is called SANNI. In 2007, it opened its first flagship store on the outskirts of Madrid. Today, SANNI already has three chain storefronts, and the other two are located in VALLECAS and GRANVIA Avenue in the city center. Business is stable.

The interior design, decoration and arrangement of SANNI's branch store in VALLECAS are closer to the European style and are somewhat similar to ZARA. In addition to similar fashions in Europe and the United States, Sanni Three Stores has also adopted a consistent management model with these multinational apparel retail giants.

Purchasing from a local Chinese clothing wholesale company in Spain, “If you purchase directly from the country, you will lack the timing. The style of the clothing will be updated quickly. Your goods may have just come in from the country. This style has already withdrawn from the trend. "In the same way as Primark, it cuts down on price promotions in handling inventory, reduces inventory cash, and increases the company's cash flow." "A lot of Chinese are reluctant to put this, and the backlog of clothing is not sold at a low price. As a result, more and more inventories are being stocked, new and fewer new products are being sold, and sales are getting narrower and narrower. It is actually worth the candle."

“Now Spain’s environment is not very good. The government has introduced various policies and companies and shops that strictly inspect Chinese. Many Chinese bosses have been fighting alone for a long time and have no team spirit. Internal competition has long been heated up. They met Primark and even faced a war. There is no strength, only struggling to support and wait for closure.” Mr. Zhang said to reporters earnestly, “I used to live in France and found that the Jews there were united, they did not engage in low-price competition, and peers helped each other. The state of the alliance. In contrast, the Chinese in Spain are basically rivals between their peers."

“Chain management is a model worthy of experimentation and practice. But this requires greater economic strength and management strength, as well as solidarity and collective consciousness. If the Chinese can really unite, the bigger the chain of clothing store chains will be in the form of joint stocks. Stronger, at that time, our competitors will be ZARA, MANGO, such as the big crocodile; if the Chinese people still do not unite, still go it alone, engage in small stores, distributed management, and thousands more shops, or It will also be squeezed by big companies in Spain and will eventually be eliminated by the market.”

The other way is to apply to others

When Primark and the Chinese merchants' clothing wholesale shop were fighting blood in Spain, Shanghai, which was thousands of kilometers away, also entered the onsale season. On the first day of opening ZARA, each store was almost squashed and the men exclaimed: “Shanghai woman is crazy!”

Looking at Shanghai's ZARA, H&M, and MANGO, you can imagine Barcelona's Primark, cheap clothing, rough workmanship, sloppy tailoring, and the latest wave of styles. This may be a common label for all multinational discount clothing retailers. Of course, the most It is important to be cheap.

The Spanish Chinese said that Primar's low-cost route was "to use his path to apply his body," and learned Chinese. In fact, if the global success of this group of multinational clothing predators is attributed to low prices, it will be a secret. For example, the white-collar workers in Shanghai prefer to go to ZARA to get rid of their heads, and they are reluctant to go to Qipu Road, even though the clothes are almost the same in terms of style and workmanship, and the prices are “small and expensive”. Behind this is a successful business model, which relates to cost control, warehouse management, customer psychology, pricing strategy, brand positioning and other aspects.

Yes, in the commercial environment of modern society, it seems that in the bloody battle between Spanish businessmen and Primark in Spain, it seems that they can sniff the sense of a Boxer against the eight-nation coalition. When a small sampan encounters a cruiser, it is not a matter of “unity” or “invulnerability”. It needs more patient research, faster learning, and smarter tactics.

In this respect, SANNI, a Chinese clothing chain, has made a successful example. When the exchange rate of the renminbi rises rapidly, instead of sticking to a price war, killing eight hundred self-inflicted one thousand, it is better to truly "put oneself behind another by using one's path" and use domestic labor and raw materials to learn from the predators. The mature business model is to create a Chinese-owned chain discount clothing retail aircraft carrier.

On Nanjing Road in Shanghai, there are local ME&City challenges ZARA and MANGO, on the streets of Spain, and we look forward to more face-to-face competitions between SANNI and Primark.

It is not plagiarism but transcendence!