BELLE Controls Industrial Chain And Wins Vertical Integration

What are the important factors driving BELLE's strong growth? Owing to the impact of the environment, many shoe companies have been closed down since last year. Insiders estimate that a conservative estimate is that the ratio of closed shoe enterprises is up to 30%. However, there are exceptions. BELLE international is a representative enterprise in strong development in adversity. According to its performance report released in mid September last year, the total revenue of Belle International Holdings Ltd was 8 billion 228 million yuan in the first half of the year, up from 5 billion 131 million yuan in the same period last year, an increase of 60.4% over the same period last year. The sales volume of footwear business increased from 2 billion 803 million in the same period last year to 4 billion 253 million yuan, and the sales of sportswear business increased from 2 billion 328 million yuan in the same period last year to 3 billion 975 million yuan last year. The gross profit margin of footwear business and sportswear business was 65% and 35.6% respectively, which is almost the same as that of the same period last year. Though lower than market expectations, this is still a pretty handsome achievement. So, what are the important factors to promote BELLE's strong growth? Which is the most valuable link in the value chain? To control the whole industry chain, BELLE shoes industry was founded in October 1991, mainly engaged in the processing of orders and the manufacture of footwear products. There are no two kinds of products with the vast majority of the current order manufacturers. In 1997, after accumulating rich experience in footwear manufacturing, BELLE began to expand its global retail network and began to build its own brand. Over the next few years, BELLE shoes have become the leading brands of similar products in the Chinese market. In order to further strengthen the control of the retail terminal, in 2002, BELLE and distributors jointly formed BELLE Investment Co., Ltd., with equity as a link, tied the development of sales terminals with BELLE's development. In 2004, BELLE's 1681 retail outlets were transferred to Off Shore Company BELLE international by changing the lease, and the intangible assets such as BELLE's office equipment were also sold to BELLE international. In 2005, BELLE international gained the capital injection from Morgan Stanley's two fund companies. After full capital support, it began to expand rapidly and became the largest female shoe retailer in China. It owns BELLE, Staccato, Teenmix, and other brand names such as BELLE, Staccato and other brands. Last May, BELLE listed on the Hongkong stock exchange. The vertical integration mode is an important development mode for BELLE to stand out in China's shoe industry. All aspects of the industrial chain from product design to development, production, marketing, promotion, distribution, retail and so on are all undertaken by BELLE itself. Today, advocating industrial chain division and cooperation, this mode seems a bit different. In fact, it is a guarantee for BELLE to get high profits. Under the support of this model, BELLE has made enough profit in every key link of the industrial chain, and the gross gross profit margin of the enterprise is higher than the average level of the industry, which is 10 percentage points higher than that of other excellent enterprises in the domestic shoe industry. More importantly, in the rapidly changing market environment, direct control of the retail network enables BELLE to set up an efficient platform of operation anywhere between enterprises and consumers. It can acquire and control market information at any time, grasp market trends and win the initiative in competition. At the same time, this mode also allows BELLE to control the supply chain to the maximum extent, so that the product will start listing 4 months ahead of the products developed abroad. While BELLE has strong control over sales, it has not ignored the investment in manufacturing. "In 2006, BELLE invested 500 million yuan to build BELLE Industrial Park. The purpose of this is to firmly grasp the manufacturing links in our own hands, and enable enterprises to exert themselves in the rear end of the supply chain, and the auxiliary front-end will cater to the market well. BELLE CEO Sheng Bai Jiao said. Build up a fast supply chain - resolve inventory. In clothing and footwear industry, inventory is the "enemy" of enterprises. Strict control of inventory is BELLE's secret weapon to increase profit margins. In the process, the Spanish brand ZARA is the benchmark of BELLE. It focuses on customer demand and takes market demand as the guide to meet the popular demand of fashion products. Its operation mode focuses on team efficiency coordination, communication unimpeded and high-speed operation, which greatly reduces the inventory pressure. Fast benchmarking coupled with its own innovation has helped BELLE form its own unique speed supply chain. Small quantities and varieties. At present, in BELLE, a shoe will only take more than 20 days from production to rack. The first order of any product will always be 50%, and the rest will be completed in the form of supplementary forms. After the first batch of products are put on shelves, the sales situation of retail terminals will be quickly returned to the enterprises, and the production of the remaining 50% products will be determined based on these information. In addition, designers of different products will rush to the front line after the first batch of goods are put into the market, listen to the voice of consumers, and improve product design according to market demand. The "small batch and multi variety" product delivery mode has become an important feature of BELLE. To build BELLE's strong market capability, it is the retail outlets all over the country. They are a direct window for BELLE to study consumption patterns, and also an important guarantee for BELLE to create a fast supply chain. A high degree of market demand diversification caters to BELLE, which will make the inventory problem of the industry generally headache as far as possible. Large cities open more shops and small cities have large stores. BELLE's opening speed is also shocking. Of course, BELLE's unique shop concept is matched by this speed. "The first thing to do is to do a good job in the supply chain of products," Sheng Bai Chai said. "The cost of opening a store in a big city is high, and the brand is more and the competition is fierce. A brand can not occupy the market by overwhelming advantage. Our strategy is to open more stores and let the brand gradually become popular." Many brands win. With so many retail stores, how can each retail point be done at the same time as the rapid expansion? BELLE's strategy is to introduce new well-known brands continuously and occupy more market share through mergers and acquisitions and agency. Almost all of the brands of BELLE are famous in the domestic market. Before that, BELLE acquired 4 famous brands, such as MII Li, Xun and so on, and added 4 proxy brands. The multi brand strategy has earned BELLE a stable customer base and a stable market share. Flat decision. In order to cater to the different needs and aesthetic tastes of consumers everywhere, BELLE has divided the whole country into 10 sales areas, and the purchase and sale rights have been completely decentralized. This flat decision procedure enables BELLE to adapt quickly to market changes and improve sales and profitability. The use of brand, supply chain and strong channel, plus fine management, made Bailey get rid of the embarrassment of most shoe enterprises. "Wherever women pass by, there must be BELLE." This is the goal of Sheng Bai pepper, who plans to open 1000 new stores every year, including more retail outlets. More shoes and hat investment information, click here to enter the responsibility editor: Wang Xiaonan