Can Underwear Giants Win The Chinese Market By Playing Comfort Card In Overseas Market?

Weimi's continuous bad news about overseas business revealed the common "growing troubles" of overseas old underwear brands. In the changing trend of underwear aesthetic dominated by women, the new and old business opportunities change.

Women's underwear market is known as the last blue ocean of women's clothing industry. Especially in China's women's underwear market, per capita consumption is still far below the global level, which is regarded as a new engine of growth by giants. According to AI media consulting data, the global underwear market will reach about 450 billion US dollars in 2019, and the Chinese underwear market will reach 200 billion yuan. From the perspective of the four major domestic underwear brands, in the blue ocean of 200 billion yuan, their wallets have become increasingly shrunken, and some companies even have annual losses of nearly 1.3 billion yuan.

It's easy to find that there are too many famous women's Underwear Companies in the international underwear market.

Overseas market for giants

Under the influence of this year's epidemic situation, Weimi, which once created the "sexy myth", has become the "oil bottle" of the parent company l brands.

According to the big data report on global underwear industry operation and China's underwear market monitoring from 2019 to 2021, Vimy's market share in the United States dropped from 31.7% in 2013 to 24% in 2018.

At the beginning of 2020, l brands wanted to sell Weimi, whose performance was constantly falling, but the deal was not completed as expected due to the buyer's reneging. Sales fell 46% to $821 million in the first quarter of this year. L brands said it would permanently close 250 Vimy stores in North America by 2020. In addition, in June, it closed its only flagship store in Hong Kong, China.

Wolford, a luxury underwear brand in Austria, has been in a state of continuous loss in recent years. In the 2017 / 2018 fiscal year, Wolford's sales fell to the lowest level in five years of eur149 million. Wolford's sales continued to decline by 8% to EUR 137 million in the 2018 / 2019 fiscal year. In December 2019, Wolford released the data of the first half of fiscal year 2019 / 2020. Due to the poor performance of stores due to the decline of passenger flow, the net loss increased by 62% year-on-year to 11.86 million euros. Wolford also admitted that under the impact of the epidemic, the company's performance in the second half of the fiscal year would be even worse.

In 2018, Fosun Group, a Chinese capital, acquired Wolford's controlling interest at a price of 55 million euros to open up the Chinese market for it. In the medium term, Wolford is also very optimistic about the market share of China and Germany, with a sales contribution of 15% - 20% in the future.

"When I decided to buy Wolford, it was because of its sense of technology and its high repurchase rate. Wolford represented a woman's aesthetic response to her intrinsic values. We hope to pass on its innovative and technological product power genes. " Cheng Yun, chairman of Fosun fashion and member of the board of supervisors of Wolford Co., Ltd., revealed Fosun's original intention to purchase the controlling right from the Wolford family in an interview with the daily economic news.

"We plan for 3-5 years, so we need to close some unprofitable stores, which will result in the cost of closing stores; at the same time, we need to do some continuous and large-scale development of product force, and we have to invest more in R & D expenses." Cheng Yun further told reporters that it is unrealistic to see a great improvement in the performance in the first and second years of Fosun's acquisition of Wolford, "but as long as the action is right, I believe that in the third and fifth years, it will show the financial improvement after operation."

The concentration of domestic market is not high

The overseas underwear market is changeable, and the senior players in the Chinese market are also facing the "new rules of the game" which are constantly iterative. From the perspective of industry concentration, China's underwear market is also highly dispersed.

According to the data released by AI media consulting, in 2019, China's per capita consumption expenditure on underwear will increase the most, which is expected to reach 57.5 US dollars. However, this consumption amount is still lower than that of some developed countries. It is reported that Britain, France and Germany are the top three countries in underwear consumption in the world, with per capita underwear consumption spending of US $100.9, US $94.3 and US $85.

According to Cinda securities, the top three brands in the Chinese market are metropolitan beauty, amo and Huijie, with market shares of 3.2%, 2.4% and 1.4% respectively. At present, Huijie shares, urban beauty and an Lifang holdings have landed in the capital market. At the end of June this year, amo shares also submitted a prospectus.

According to the business performance of the four domestic underwear enterprises in the past three years, the daily economic news reporter found that from 2017 to 2019, the operating income of urban beauty and an Lifang holdings decreased, with 4.543 billion yuan, 5.096 billion yuan and 4.082 billion yuan respectively, and 1.956 billion yuan, 2.148 billion yuan and 2.031 billion yuan respectively.

In terms of net profit, from 2017 to 2019, Huijie shares accounted for 239 million yuan, 196 million yuan and 209 million yuan respectively; those of urban beauty were 317 million yuan, 379 million yuan and - 1299 million yuan respectively.

In terms of the overall market, China's underwear market has been shuffled several times before the epidemic. According to qixinbao data, from 2016 to 2019, the number of enterprises in China's underwear industry has increased year by year, with 647, 770, 1527 and 2907 respectively. At the beginning of this year, 880 underwear enterprises disappeared.

On the other hand, some domestic emerging underwear brands are quietly rising and financing news is frequent. Take Neiwai, an Internet brand of women's underwear founded by Liu Xiaolu, as an example, since its establishment in 2015, it has completed four rounds of financing. By the end of 2019, it has completed round C financing of 150 million yuan, with a post investment valuation of more than 1 billion yuan. It is estimated that 150-200 offline stores will be opened in 2020.

There are also many original underwear brands with the help of the Internet. According to the incomplete statistics of it orange, in 2018 alone, the domestic underwear industry had about 200 million yuan of investment and financing. Among them, ubras completed 50 million yuan of financing; Qingwei got 30 million yuan of remote mirror venture capital and today's capital investment; oxygen completed B + round of investment; yinman underwear received 10 million yuan of financing.

Can comfort win the market?

In spite of the ups and downs in overseas markets and the bankruptcy of its British branch, Weimi is determined to bet on the Chinese market. In April this year, it launched its latest spokesperson, Zhou Dongyu, to interpret a kind of "redefining sexuality".

"At present, more than 60 Weimi stores in China have resumed work. In April this year, Weimi officials publicized the brand spokesmen Yang Mi and Zhou Dongyu, launched the theme activity of "sexy like this", the launch of new products, and the promotion activities of Shanghai 55 Shopping Festival, all of which have played a positive role in driving passenger flow and improving sales. " Weimi side to the "daily economic news" reporter said.

Xiangkou Mueller, another international giant, has taken "comfort" as the top priority in expanding the Chinese market.

"Underwear is extremely personal, which means that any trend change will be closely related to the real-time environment. Through the insight of consumers, we pay more attention to the comfort of products at this stage of development, so the design of high comfortable non steel ring underwear and soft lace underwear has become the main trend of product design recently. In addition, more and more contemporary women take underwear as part of the overall shape, and gradually form their own unique style, so the attitude expressed by underwear is also very important. " VI Patel, chief operating officer of Xiangkou Mueller, told reporters.

"In the first half of 2020, the proportion of underwear without steel rims will reach 70%, and the underwear with steel rims will maintain a double-digit growth. Undoubtedly, the underwear without steel rims has become the basic demand of consumption." The person in charge of tmall told reporters that with the pursuit of extreme comfort and the housing economy derived from the epidemic situation, "no steel ring has been unable to meet the demand of consumers for fine differentiation. In the past two years, waistcoat bras, as well as the derived no size bra to solve the problem of consumer selection, have grown rapidly. In the first half of 2020, the growth rate of no size vest bra is as high as 995%. "

"China's underwear market is huge, but it's also very fragmented, with no one or more brands dominating the market," says VI Patel. Consumers are still able to explore high-quality and cost-effective underwear brands in China. Our intention is not to quickly own two or three thousand stores in China, but to establish Omni channel development in the next five years. "

In fact, the recognition and sales share of underwear brand Wolford in China are still relatively low. How does the Centennial brand balance traditional DNA with millennial consumer preferences?

Cheng Yun believes that the brand's DNA must not be lost. "The reason why Wolford's consumers buy back lies in its loom and technology, which can produce the comfort of the second layer of skin. If this is lost, Wolford will not be Wolford, and loyal consumers will be confused. As for attracting young consumers, it is more important to develop new product lines, such as product planning integrating sports elements. The renewal of consumers should be accomplished imperceptibly.