/Yilan Commercial
Author/Dong Ye
Editor/Xue Xiang
With Urban Beauty closing stores on a large scale, Embry losing tens of millions last year, and Ai Mu's net profit declining for two consecutive years, it took nearly 20 years for the established underwear brand to The formed market structure seems to be being shattered by emerging brands.
data shows that Jionei, which was founded in 2016, used 1 billion in annual revenue as the basis of its valuation in the latest round of financing; Ubras, which was founded in 2016, had annual revenue of 200 million yuan last year, and its revenue in just one month this year has exceeded Nearly 100 million yuan; the new brand has a tree and has been valued at 1 billion yuan less than two years after its establishment; NEIWAI inside and outside (hereinafter referred to as "neiwai") has developed steadily online and has opened 120 direct stores offline. stores, and plans to expand the number of stores to 200 by the end of this year.
Emerging underwear brands represented by Jiao Nei, Ubras, and Neiwai are called the "Three New Underwear Sisters" by the industry. They have been able to break through in just 3 years, which is closely related to the DTC model.
The DTC model originated in the United States. DTC stands for Direct-To-Consumer, which literally translates to a brand that is directly oriented to consumers. Brands under the DTC model rely on clear positioning to seize consumer demand, and use live streaming, cross-border marketing, KOL and other methods, and then use the Internet online platform as the mainstream sales channel to create memorable and affordable super single products. Get out of the circle and quickly build brand awareness.
But the success of a brand depends on DTC, and the failure of a brand depends on DTC. The DTC model promoted the rapid development of new underwear brands in the early stage. Now the DTC model seems to be unable to meet the development needs of the three new underwear sisters. What should the three new underwear sisters do if DTC is put aside.
New underwear brand, started with DTC
Domestic DTC brands have only developed in recent years with the rise of social media. They can establish direct contact with users through Tmall , Douyin , Xiaohongshu and other channels. , it can be called a domestic DTC brand.
Zhang Meng first learned about the brand "Jiao Nei" in the Li Jiaqi live broadcast room. Under Li Jiaqi's recommendation, Zhang Meng placed an order for Jiao Nei's boat socks for the first time. After receiving the express delivery, Zhang Meng was very surprised. She felt that the quality of 4 pairs of socks for about 50 yuan was really impressive. Later, Zhang Meng also placed orders for Jiao Nei’s bras, thermal underwear and other products in Li Jiaqi’s live broadcast room, and none of them failed.
In the past year, Jiao Nei returned to Li Jiaqi’s live broadcast room almost every month, whether it was Jiao Nei’s 5 series home clothes, 301P socks, 500E underwear, 500D bra, 500E nightdress and other regular hot products, or 520CL week pants , all appeared through Li Jiaqi’s live broadcast room, covering almost all categories in Jiao Nei. Even Li Jiaqi himself joked during the live broadcast: "You guys haven't bought enough in Jiao Nei, are you wearing it outside?"
Ubras chose to enter the Wei Ya live broadcast room. After the Xinjiang cotton incident, on the evening of March 26, Wei Ya introduced Ubras underwear products in a special live broadcast of Xinjiang cotton products in the live broadcast room, and popularized the cultivation of cotton in Xinjiang to fans in the live broadcast room. According to statistics, about 12 million people watched the live broadcast online within one hour, and Ubras underwear was sold out as soon as it was put on the shelves. It is reported that from January to October this year, Ubras will participate in the Weiya/Li Jiaqi live broadcast room at least once and at most 7 times a month.
With the rise of live broadcast platforms, the live broadcast rooms of top anchors are regarded by DTC brands as a must-have place for the brand’s debut. The non-wired underwear, which is the main product inside and outside, has converted the relatively complicated underwear sizes in the past into "S, M, L, " problem; Jiao Nei even proposed the concept of "senseless underwear", using high-tech products to respond to the "not cool enough" underwear industry.
uses a popular product as the cornerstone of communication, and then through live e-commerce, social media, and intensive KOL coverage, it becomes the second step of the new underwear three sisters DTC model.According to CBNData, live streaming has made a considerable contribution to the sales of underwear brands. Jiao Nei’s live streaming sales contribution ratio is between 35% and 50%. During Tmall’s “Double 11” pre-sale period, Li Jiaqi’s three live broadcasts contributed 39% of pre-sales to Jiao Nei.
Ubras 80% of the trading volume is concentrated on the same super large single product as Ouyang Nana . According to the Tmall flagship store, 200,000 people paid for this underwear, which is double the number of the second best-selling product.
live streaming and celebrity endorsements brought significant performance growth to the early DTC model.
What needs to be emphasized is the contribution of social media platforms to the DTC model. Comparing the data of the three new underwear sisters on the three mainstream social platforms of Xiaohongshu , Douyin, and Kuaishou, it can be found that the three new underwear sisters all prefer the Douyin platform and have a relatively large number of fans on the platform; Ubras and Neiwaiwai The number of fans on Xiaohongshu and Douyin is larger than that of Jiao Nei. By comparing the content of notes and videos, we can also find that the content of Ubras marketing is only underwear, and the category is relatively single, while Jiao Nei and Nei Nei cover multiple categories.
In terms of channels, most of these brands choose to start online. On the one hand, they can quickly respond to the changing needs of consumers through the direct-to-consumer marketing model. On the other hand, the benefit of e-commerce is that they can centrally manage inventory. Founded in 2012, Waiwai entered the Tmall platform in the same year, while Jiaonei and Ubras, both born in 2016, were launched on Tmall in 2016 and 2017 respectively.
In the Tmall flagship store, the best-selling product in Jiao Nei is 301P men’s modal underwear, with a monthly sales of 70,000+; the best-selling Ubras is the same style vest bra of Ouyang Nana, with a monthly sales of more than 90,000; Tmall flagship store inside and outside The store’s best-selling item is Jin Jing’s Yunduo no-size spaghetti strap bra, with monthly sales of over 50,000 yuan. These single products that stir up sales are also in the hands of KOLs on major social platforms. They use various novel angles to attract consumers to place orders.
At this point, the three sisters of New Underwear, which started with the DTC model, have completed the three key steps of "live streaming, social media, and full coverage of online channels". However, as the brand develops to a certain stage, this pure DTC model has brought The disadvantages are becoming more and more obvious.
Working for channels and KOLs
With the help of self-built e-commerce channels, social media and other online media communication, the DTC model greatly saves costs and passes profits to consumers to achieve high cost performance.
However, consumers may not enjoy the dividends of the DTC model, and profits are severely squeezed by KOL and Tmall platforms. An insider in the live broadcast industry told Yilan Business: "The main purpose of brands inviting top influencers/anchors to bring goods is to open up the market and increase the exposure and popularity of products. If we look at it purely from the perspective of online live broadcast, Product discounts and commissions, most of the live broadcasts actually cost money. "
According to Beijing Youth Daily , it can be seen from the reply letter from Yujiahui to Shenzhen Stock Exchange that the company in 2019. The total number of live broadcasts throughout the year exceeded 8,000. Among them, the head anchor played 77 games. However, "from the perspective of sales proportion, it does not yet constitute a major source of sales and has a small impact on the company's operating performance." Yujiahui said that in 2018 and January-September 2019, the company's products involved in cooperation with Internet celebrity anchors The sales amount accounted for 0.99% and 4.02% of the company's operating income respectively. Although there is no loss of money, the sales revenue obtained through live broadcast is indeed bleak.
On the other hand, the Tmall platform also needs to pay a series of deposits and annual fees. Tmall also takes a commission from each sale, and the specific commission ratio depends on the brand. The founder of a start-up brand previously interviewed by Yilan Business said: "Tmall's commission is okay, it is just a normal handling fee. There is no cost to join Tmall, but there is a cost to do well in Tmall, and this part of the cost very expensive."
It is worth mentioning that the American DTC clothing brand Everlane announced today that it will close its Tmall overseas flagship store from September 12. As of the closure, Everlane has been in the Tmall flagship store for two years and has only 535,000 store fans. .
The difficulties of the pure DTC model that relies on e-commerce and the Internet are beginning to appear. As an imported product, DTC is not completely in line with the development of domestic brands. In the United States, consumer groups are segmented based on geographical location, values, etc., and each e-commerce company is in trouble. The platform can also benefit from the private domain traffic of independent websites.
However, the development of domestic e-commerce is a different story. The traffic is mainly concentrated on large e-commerce platforms such as Tmall, JD., regardless of whether the private domain is re-established. Traffic or fans converted from public domain traffic are very expensive.
Domestic brands are still in the stage of occupying the minds of users. The volume of brand communication determines the value of the brand in attracting traffic, but consumers are mobile. , the traffic bought with money is not necessarily stable, but the traffic is getting more and more expensive, which makes enterprises and users form a disgusting cycle of "buying traffic-traffic loss-secondary start-up traffic-traffic loss again"
only rely on. The pure online DTC model is no longer suitable for the development of Jiao Nei, Wai Wai and Ubras. Going offline and developing all categories has become their next stage of development goal. After all, the ultimate goal of the three new underwear sisters is not to become an Internet celebrity brand. Instead, it should become a representative brand in the industry.
In addition to DTC, it should also return to the origins of popular brands.
Thanks to the mature domestic clothing manufacturing supply chain, most new brands use the currently popular DTC marketing model, OEM production, and heavy firepower. On the marketing and promotion side.
Ji Yun, general manager of Tmall’s FMCG division, summarized the four stages of the growth of these new brands - the first year to create a hit product with sales exceeding 100 million; the second year to expand the category. , achieving 300 million; in the third year, it began to expand from a single brand to multiple channels, exceeding 600 million; in the fourth year, it became a unicorn brand with sales exceeding 1 billion.
At present, most of these new brands are stuck in the fourth place. In 2016, the brand at this stage has certain user and brand influence, but it is still a niche brand. The same is true for the three sisters of New Underwear.
Obviously, they have to cross the fourth stage and transform from a niche internet celebrity brand to a fifth one. For truly big names at this stage, DTC alone is not enough. Take the three new underwear sisters as an example:
First of all, the DTC brand itself relied on a hit product to break out of the industry, but it did not iterate quickly. "In the past, the domestic underwear market was highly homogeneous, with numerous and complete product lines, and consumers did not have a deep understanding of each brand." In the view of Aibo, a well-known PE senior investment manager, most established underwear brands lack a clear identity. Brand positioning: For a long time, China's underwear market has been in a state of "products but no brands". But now, DTC brands are facing a situation of having a brand but no products. Brand awareness has been built, but product innovation cannot keep up. It is difficult to attract consumers with a single hot product.
Secondly, from the perspective of product pricing, they are all in the same price range, and new brands have begun to fall into price wars. The main focus is on high-end quality inside and outside, and the product price is between 150-500 yuan. Jiao Nei has launched a variety of underwear under 100 yuan, with the highest price not exceeding 300 yuan. The price of Ubras' super single product is 128 yuan, and most of the underwear products are around 200 yuan. Therefore, the audiences of Jiao Nei and Ubras have almost the same level of consumption power.
Also, from the perspective of product form, the best-selling models of Waiwai and Ubras are both vest-style underwear, and the difference between the two products is only 20 yuan. It can be seen that the user groups of the three major brands have a certain degree of overlap. From
itself to the industry, brands operating through the DTC model have begun to show signs of weakness at this stage. To solve the four-year curse of DTC, we still need to return to the core of brand operations—products and channels.A single hot product cannot create a brand, nor can a single channel create a brand. A real brand is one that can continuously develop a series of products and enter various sales channels according to consumer demand, forming a product tree and channel network.
Therefore, it is time for DTC brands that have developed to this stage to return to the idea of popular brands. The three sisters of New Underwear also seem to realize this.
Nariz, head of the Jiao Nei Marketing Department, said: "Our goal is to be a national and popular brand, and the products will cover all aspects of home life."
There are also relevant internal and external leaders who said: "The development model of domestic DTC and overseas It is different in itself, and Waiwai does not position itself as a pure underwear brand. "From the Waiwai Tmall store, we can see that the products of Waiwai have covered multiple categories of underwear, furniture clothing, and sportswear. It can only be said. Inside and outside, it relied on wire-free underwear to get out of the circle, and then developed into a home life brand through all channels.
Liu Xiaolu, the founder of Waiwai, once said in an interview with the media: Waiwai is a brand that grew up online. However, it is also very important to open offline channels. On the one hand, it can meet the needs of consumers for in-store experience. More importantly, on the other hand, it can achieve the purpose of acquiring customers through multiple channels and achieve the role of brand promotion. Going from online to offline has become the only way for many emerging brands, and it is particularly important to seize high-quality channels offline. Since opening its first store in 2017, Waiwai has now opened more than 120 offline stores in 32 cities across the country.
But these are not enough. Next, Jiao Nei, Ubras, and inside and outside should start to get used to meeting new challenges and build a stronger supply chain system, better sales channels, and clearer product lines.
