The First Tier Cities Of International Brands Have Been Sinking, And Have Entered Two Or Three Line Cities.

When H&M first entered China's second tier cities such as Beijing, Tianjin, Changsha, Hefei, Chongqing and so on, it was a long queue for tide makers and petty bourgeoisie.

The queuing party is looking forward to it.

It is a fashion with no time difference with Europe.

In recent years, fast fashion brands quickly captured the hearts of urban white-collar workers with fashionable, fresh, relatively inexpensive prices and open and relaxed shopping environment. Brands such as ZARA, H&M, C&A, GAP and Uniqlo have already swept the business circles of China's first tier cities.

Last year, the fast fashion footwear apparel brand showed a rapid development trend. The number of stores in China continued to grow rapidly, and the trend towards the development of the two or three line cities was obvious.

According to the latest statistics from authoritative organizations, the proportion of two or three line cities in ZARA and H&M stores in 2011 was 82.8% and 83.9% respectively.

In addition, internationally renowned sports brands are also increasing the mining of China's two or three tier city market.

Back in 2010,

Chinese companies and

Chinese companies have issued a plan for the next five years, indicating that the development of the two or three tier market will be intensified in the next five years.

It is certain that China's two or three line market will be the focus of future competition among foreign investors.

Sinking edge

Almost all multinational companies have entered China since they came to China.

And other cities with relatively strong spending power.

Since then, the first tier cities have also been their main battleground.

After years of layout and promotion, international brands have already gained a foothold in the first tier cities.

However, in recent years, with the continuous development of the first tier cities, the growth rate of foreign brand market has slowed down.

In particular, the sports brand has entered the cooling season after the sales increase brought by the 2008 Olympic Games.

In order to achieve annual sales target, Nike, Adidas and other international brands have to market to the two or three tier cities.

At the same time, local brands such as Lining, Anta, seven wolves, and Lelang, while consolidating the original two or three line city market, are also working hard to get into the first tier cities that were originally part of the foreign investment front.

International brands have been sinking, and the market has been diluted gradually, prompting the international brands to sink into the two or three tier cities of China and continue to open stores.

As China's urbanization level continues to accelerate and the urbanization process continues to accelerate, in the next 10 years, even 20 or 30 years, small and medium-sized cities will usher in a new round of rapid development, and the purchasing power of consumers in small and medium-sized cities will be further released.

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The magazine predicts that by 2020, 66% of China's middle-income consumers will come from a large number of small and medium-sized cities.

Such a broad market is enough for all brands to move.

Sinking Road

International brands have been sinking channels, but their pace and path are different.

In fact, the channel campaign of international sports brands in China's two or three tier cities started two or three years ago.

Charlie Denson, President of Nike brand, said in a conference call in fiscal year 2010 that the company will launch low-priced products at different prices to enter China's second, three or even four line cities.

With the strategy of price reduction and the expansion of channel providers, international sports brands have opened stores in the two or three tier cities, and now there are many big names in small and medium-sized cities.

According to media reports, in June 5th this year, Nike official flagship store was settled in Tmall mall.

Since then, it has been announced that Nike will launch Tmall's first and only sports shoes and clothing, which has aroused widespread concern in the industry.

Up to now, nine of the ten major sports brands in the world have been stationed in Tmall to open the official flagship store.

In addition to Nike, the remaining eight are Adidas Adidas, Puma Puma, Reebok Reebok, Fila Phil, Mizuno MIZUNO, Kappa kappa, Diadora Diadora, Lotto lotto.

It is speculated that the international sports big name will help the electricity suppliers rush to the two or three line market.

But the executive vice president of a clothing company.

Expert Han Buyong believes that the big players will not rely on e-commerce channels to enhance their performance. The development of e-commerce is just to support the brand image and better interact with consumers.

As for the strategic position of the electricity supplier in the international sports brand sink channel, it remains to be seen.

The sink of fast fashion brands is another scene.

Han Buyong pointed out that the channel of fast fashion brand sinks is far less than that of sports brand.

They entered the two or three tier cities only last year.

The number of fast fashion brands in China is not too large. According to last year's data, ZARA has 97 stores in China, H&M77 family and Uniqlo123 home.

They are still continuing to snatch the market in the first tier cities. Han Buyong thinks that the large-scale channel of fast fashion brands should sink after 3-5 years.

In addition, among the 8 fast fashion brands stationed in mainland China, only GAP, WE and UNIQLO opened flagship stores in Tmall mall.

Moreover, unlike the sports brands who rely on franchisees and agents to expand their channels, the fast fashion companies have used the "big store" experience when they enter the two or three tier cities by opening up the "big store" to sweep the first tier cities.

This is determined by fast fashion's high demand for the speed of supply chain reaction.

Only by opening a direct store can we firmly control the terminal. If we take the form of franchising or agency, we will greatly reduce the reaction speed of the whole chain.

Insiders said that opening the "big shop" is not only a way to solve the direct camp, but also lay a brand foundation for the channel to join.

The location and area of "big store" has a stronger influence on the brand than the regional advertising.

Therefore, "big shop" will become a development trend of enterprise terminal form.

Sinking

A line of brand executives said that a careful study of the development routes of local brands and foreign brands will find an interesting phenomenon. The development path of foreign brands and local brands is just the opposite.

"The path of domestic brands is the bottom-up mass line, first gaining the recognition and trust of the broad masses of grass-roots people, and then going to the first tier cities to settle the townspeople in the big cities; and the international brand is the top-down leadership line, by first fixing the first tier cities, and then with the influence of the first-line market, to finish the two or three tier cities at the first level."

At the moment, foreign brands will sink into the two or three tier cities, and will undoubtedly join hands with local brands.

Domestic brands such as seven wolves, Li Lang, Anta, PEAK, XTEP, Metersbonwe, YISHION, Semir and so on are all relying on the two or three line market.

These brands have grown up and have stores all over the country, especially the two or three or even four line cities.

In all provinces and cities of the country, the main commercial streets and department stores have their shop shops.

In the two or three line market, they have taken the lead by years of development, and have hindered the market of foreign brands.

According to the insiders, the price is still the decisive factor affecting the international sports brand to enter the domestic two or three line market.

For consumers of two or three tier cities with high price sensitivity, the price of international sports brands is still high.

At present, the two or three line market can best adapt to the price of 170-250 yuan, and even Nike's low price products, the domestic sales price is also 300-400 yuan.

For the fast fashion brand's channel sinking difficulties, Han Buyong believes that the consumption habits of the two or three line cities are still significantly different from those of the consumers in the first tier cities, and their consumption characteristics are more distinct and diversified.

Moreover, they are relatively less influenced by the trend of the world, and the understanding and acceptance of fashion is also very different from that of the consumers in the first tier cities. Therefore, it is difficult for the fast fashion brand to sink into the two or three line cities.

In addition, the fast fashion brand's "big store" strategy is not adapted to the first tier cities, but in China's two or three line cities, the region is vast, the process management will be more difficult, and the input of manpower and material resources will be bigger. This has to be a great challenge.