The Love "Prospectus" Reveals Four Key Points In China'S Underwear Industry.

In recent years, the heat of underwear market has been rising both in China and abroad. Traditional underwear brands and cutting-edge entrepreneurial brands compete with others, and some major sports leisure and apparel conglomerates are also involved in the field of underwear.

In the evening of June 24th, the SFC website disclosed the prospectus of China's old underwear enterprises' adoring shares (Draft), which made a detailed description of the current situation of China's underwear industry, and provided a set of important data with considerable reference value. Four important points of concern are summarized as follows:

Men's underwear market is growing faster than women's underwear.

China's underwear market has not yet formed an absolute head brand.

The newly launched online underwear brand is thrived.

Local underwear enterprises have a larger margin of gross margin.

1. The growth rate of men's underwear market is faster than that of women's underwear.

Underwear is commonly referred to as the "second layer skin" of a human being. In a broad sense, it includes many women's underwear, underwear, warm clothing, household clothes, pajamas, socks and so on. According to the prospectus data, the underwear market has maintained a good growth trend in the past ten years. The size of the underwear market has increased from 167 billion 520 million yuan in 2012 to 408 billion 40 million yuan in 2018, but the growth rate showed a downward trend in 2016~2018, which was 16.85%, 15.98% and 7.50% respectively.

The underwear industry can be further divided into female underwear market, men's underwear market, children's underwear market and sports underwear market. The market size of women's underwear and men's underwear was 160 billion yuan in 2018, accounting for 40% of the underwear market.

From the perspective of growth, the growth rate of men's underwear market in the past ten years has been significantly higher than that of women's underwear market. The composite growth rate of 2014~2018 was about 23.44% during the past two years, and the growth rate in 2018 was 28.54%. Compared to that, the underwear market in women was 8.58%, 9.50%, 7.30%, 7.73% and 7.18% respectively in 2014~2018.

According to GrandViewResearch's analysis of global men's underwear market data in 2015 ~2017, the main participants in the global men's underwear market are still European and American companies, including: PVH group (owns Calvin Klein and Tommy Hilfiger brand), Jockey International (Jockey brand), Germany HUGO BOSS, Levi's of the United States (USA), and Eagle Company (USA). Eagle) and so on.

Two, China's underwear market has not yet formed an absolute head brand.

From the perspective of the development of the underwear market, China's underwear brand enterprises started later than those of Europe, the United States and Japan, such as Japan's fast retailing group of UNIQLO, Japan's Wacoal Company and Vitoria's Secret parent company, the US L Brands group. The PVH group and so on, so the history of operation and scale of operation are less than the former, and the brand concentration is lower than the foreign market, and the competition is more intense.

According to the prospectus, the market concentration of the top five brands in China's underwear market in 2018 was only 6.6%. In the same period, the market concentration of the top five brands in Japan, the United States and the United Kingdom was 56%, 47% and 22% respectively.

According to the category, there are more than 3000 women's underwear brands in the women's underwear market. According to the data of China's Business Federation and the China National Business Information Center on the offline retail channels in China, the brands with high market share in 2019 were 7.34%, 6.96%, 7.34%, 4.44%, and 4.20%. In addition, Ttiumph had a market share of 4.78% in 2018.

In the high-end women's underwear market, the top three brands of the market share in 2019 were LA CLOVER (1.13%), CLOVER SALUTE (0.56%), and its brand LIZA CHENG (0.41%).

In the men's underwear market, the top three brands of the market share in 2019 were Mr. Adam (13.48%), Germany Shu Ya (6.75%), and three of the leading shares (4.98%).

Three, the newly launched online underwear brand is thrived.

In addition to the competition pressure from foreign brands, with the change of China's retail formats, China's women's underwear market has sprung up many new brands from the Internet in recent years, making the competition pattern of women's underwear market more fragmented.

The prospectus shows that in the top ten brands of bra sales in 2019, apart from the classic underwear brands such as love, man, Vitoria, Ttiumph and so on, it also includes Correll, NEIWAI inside and outside, and so on. Sell scale brand.

In addition, with the rise of leisure sports in recent years, sports underwear has become an increasingly important subdivision of the underwear industry. According to the statistics of the State General Administration of sports, it is estimated that China's sports population will reach over 500 million in 2025, of which the female population will account for 40%.

Driven by these trends, consumers' demand for functional underwear is expected to continue to increase. The difference between sports underwear and narrow traditional underwear is mainly reflected in: sports underwear has more external properties, more attention to the function of hygroscopic and quick drying, and sports bra pays more attention to the absorption of the chest during exercise.

It is different from that of women's underwear, men's underwear market and children's underwear market. The concentration of sportswear market is high, and the market share is occupied by a few domestic and foreign brands. Therefore, sports underwear as a subcategory of sportswear has a higher market competition threshold.

The prospectus shows that in 2018, the market share of the five leading enterprises of the global sports apparel combined to 35%, while the total market share of five leading enterprises in China's sports apparel totaled 57.3%, which was higher than the global market concentration, mainly due to the increasing share of Nike and Adidas in China's sports apparel market in recent years. In the field of sports underwear segmentation, the mainstream participants include sportswear brand sports underwear product line (such as Nike, Adidas, Decathlon, Anta, etc.), focusing on the brand of women's Yoga lingerie (such as lululemon, Lorna Jane, etc.).

Four, the gross margin of local underwear enterprises is relatively large.

In addition to the earlier foreign brands, the listed companies of China's close fitting clothing brands include Hui Jie share, an Li Fang and urban beauty. During 2017~2019, the gross profit margin of Hui Jie shares was 67.95%, 67.71% and 65.81% respectively. During the same period, the gross profit margin of the company was 78.03%, 79.94% and 77.76% respectively, while the urban beauty was 43.25%, 41.67%, 22.60%, while the love shares were 73.74%, 72.29% and 72.29% respectively.

The gross margin may be related to brand positioning and channel characteristics. Hui Jie shares and an Li Fang are mainly direct outlets. The urban beauty is mainly based on distribution channels, and often needs to share certain profits with distributors.

In addition, the core brand of "Hui Ni Jie" and "Li Fang", the core brand of Hui Jie shares, are the high-end market, and the city beauty core brand "city beauty" brand ends in the following market.