Textiles And Apparel Industry: Yiye Zhiqiu—From The Profound Changes In The Suitcase Market, Look At The Journey And Opportunity Of The Rise Of “New China Brand”

- Mar 08, 2019-

The past characteristics of the suitcase industry are "international brands dominate, domestic enterprises do OEM", and now the new domestic brand 90 points, Cartier crocodile and so on are changing the market pattern with fierce attitude: China's suitcase market size is about 35.2 billion Yuan, the CAGR of 2013-2018 was 7.9%. In the era of online channels, international brands such as Samsonite and Rimowa have a strong position in the mid- to high-end market with information asymmetry and high brand premium. Although many of China's suitcase factories have production design capabilities, they can only assume the role of “international brand foundries”. In recent years, under the background that e-commerce is becoming more mature and information asymmetry is gradually being broken, the new national brand is taking advantage of its advantages in pricing, supply chain, sales and marketing. In 2018, Cartier crocodile, 90 points in Ali's full network sales have surpassed the international big name Samsonite, Rimowa and the United States.

Positioning the mid-range & mass market suitcases The new national brand can achieve ROE higher than the high-end international brands: By comparing the cost and expense structure of Samsonite and Kairun B2C business, we found that Samsonite's cost accounted for 43.9%, distribution + Marketing expenses accounted for up to 36.6%; while the estimated cost of goods for Kairun B2C business was about 74%, the sales expense rate was only 12%, and the gross profit margin and sales expense rate were far lower than Samsonite. In the past three years, Kairun's total asset turnover rate was 1.27~1.33, and Samsonite's total asset turnover rate was 0.55~1.12. Kairun's total asset utilization efficiency was higher than that of Samsonite. 2015-2018Q1~Q3, Kairun ROE continued to be higher than Xinmei, Kairun ROE was 37%, 22.7%, 26.1% and 23.8%, respectively, while Xinmei ROE was 15%, 18.1%, 20.5% and 7.8% respectively.

The suitcase is just a microcosm of many major changes in consumer goods that are about to undergo major changes. The new domestic brands, represented by Xiaomi, Yanxun and South, are conquering different consumer groups in different ways: According to the National Securities Research and Innovation Center data, we It is found that Xiaomi & Strictly selected Yue-type consumers are mostly middle-class cities in the first and second-tier cities; while the Antarctic-oriented consumers are mostly distributed in third- and fourth-tier cities. Xiaomi & Strictly selected Yue-type consumers tend to “select”, while Antarctic e-commerce faces a “simplified” consumer. From the consumer brand cognition data, the proportion of Xiaomi and carefully selected brand entrances is 87% and 89%, respectively, while the Antarctic brand entrance ratio is 14%, which is representative of the category entrance.

Through the suitcase category to see the new brand supply chain integration model of domestic products, Xiaomi, Yanxuan and Antarctic all have dimensionality reduction attacks, but the three models are different: Xiaomi ecological chain is the main investment + incubation, the core is "goods"; Netease selects the main ODM "buy a hand", the core is "choice"; Antarctic e-commerce is the owner of the mercenary alliance, the core is "poly". They have formed a certain degree of dimensionality reduction attack on traditional brands. Through the comparison of the three models, we believe that the supply chain of the Xiaomi ecological chain team is the deepest, and the medium and long-term development pattern is large; the Antarctic e-commerce is the white card market. The reaper, the mode is light, the flow and scale are on the rise, and the short-term prospects are clear; while the Netease strict selection model is theoretically feasible and needs to be continuously verified. At present, the SKU expansion is too fast, the inventory risk appears, and the lack of own traffic is the core short board.

Investment Advice

90 points and Cartier crocodile revolution in the suitcase industry, new domestic brands in high frequency, high standardization, suitable for online sales, market dispersal of consumer goods such as luggage, belts, down jackets, footwear, men's shirts, etc. The rise of the industry has great value for reference. With the new brand of domestic products represented by Xiaomi, Yanxun and South, we are conquering domestic consumer-oriented and worry-free two-type consumer groups with different supply chain integration models of “product”, “choice” and “poly”. The rise in more consumer goods is worth looking forward to. It is recommended to pay attention to Antarctic e-commerce and Kairun shares.

risk warning

Consumption growth slows, market competition intensifies, and the risk of category expansion