Specialist
Director at Shenzhen Chaoji Decoration Technology Co Ltd
Agenda
- China’s fast fashion accessories industry – development path, development trends, industry chain structure, development curve, dynamics and potential
- Fast fashion accessories business model evolution, comparison among 1.0 to 3.0 versions, the core of the 3.0 model, advantages, disadvantages and barriers
- Fast fashion accessories retailers including BA, Shine, Ajidou and Onions – business models and market positioning
- Fast fashion accessories 3.0 store unit economics analysis
Questions
1.
Could you first review the development path of China’s fast fashion accessories industry? What were the development trends in 2011-16? Which novel development directions have attracted the attention of players in the industry and investors?
2.
The business model has evolved from the 1.0 version represented by Aiyaya to the 2.0 version represented by Ajidou and Shine and then to the current 3.0 version. Why hasn’t the industry become mature or completely regulated after years of development? Why hasn’t any brand outperformed the others?
3.
How is the 3.0 version of business model different from the previous two versions? BA and Onions are representative of players adopting the 3.0 version of business model. Could you elaborate on the differences between these players? How is their development progress?
4.
Viewing from their current positioning, do you think these brands differ from one another in target customer groups?
5.
It seems that these players are quite similar in positioning and business strategies. Under the 3.0 business model, which players’ development are you optimistic about and why?
6.
Next, let’s focus on these players’ store opening plans. We saw these players’ store opening targets, and we thought it is understandable why these players set such high targets. How many more locations are suitable for opening such accessories stores? What do you think of the growth potential of this market?
7.
What methods have leading players in this sector adopted to enable such a model to work well? Will they sell their products online or increase their ARPC? Can you talk about the potential strategies they will take in the future?
8.
How do industry players expand their store presence and enlarge their market share? As you know Miniso has managed to cover the whole market via its franchising model. Do they chiefly open directly operated stores or franchise stores?
9.
As you said it requires an initial investment of RMB 1m to 1.5m to open a fast fashion accessory store. How is the unit economics of such stores? Can the stores make profits?
10.
Could you elaborate on it with the indicators that are generally used to calculate store revenue, such as footfall, conversion rate and ARPC? Are membership fees included in revenue? How about products’ costs?
11.
What about each store’s specific costs?
12.
What are the payback periods for franchisees whose outlets have high sales revenues?
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