First, the trend of the retail industry industry chain
The industrial chain of China's trendy retail industry is composed of upstream suppliers, midstream trend retailers and downstream customers, and midstream trend retailers complete procurement from upstream, assume the role of storage, processing, warehousing, transportation and distribution, and provide a variety of products to downstream customers.
Schematic diagram of the industrial chain of the trend retail industry
Source: Collation of publicly available information
Second, the current situation of the trend retail industry analysis
China's trendy retail market is expanding rapidly, mainly targeting young millennials and Gen Z customers. The scale of the mainland trend retail market increased from 129.8 billion yuan in 2016 to 195.2 billion yuan in 2020, with a compound annual growth rate of 10.74% during the period and is expected to reach about 475 billion yuan by 2025.
In terms of products, the mainland trend retail market is mainly based on boutique collection retail and beauty trend retail, with the market accounting for 46.6% and 34.8% in 2020, respectively; the trend toy market accounted for 9.7%.
Related report: "2021-2026 China Trend Toy Industry Investment Analysis and Development Strategy Consulting Report" released by Huajing Industry Research Institute
Third, the trend of retail industry entry barriers
The barriers to entry of the mainland trend industry mainly include the barriers of exquisite selection capabilities, supply chain control barriers, data-driven marketing strategy barriers, brand barriers and capital barriers.
China's trend market is mainly a barrier to entry
Fourth, the trend of retail industry key enterprises analysis
KK Group is a leading fast-growing trend retailer in China, offering a wide range of retail products through four private retail brands: KKV, THE COLORIST, X11 and KK Pavilion. Founded in April 2015, it focuses on the operation of trendy retail stores, providing retail products such as beauty, fashion play, food and beverages, household products and stationery through the DTC model.
Source: Company prospectus, compiled by Huajing Industry Research Institute
Joining & direct operation at the same time, stores cover 31 provinces across the country, and the brand matrix is gradually taking shape. As of June 2021, KK Group has 640 stores.
The continued expansion of stores and the growth of GMV drove the company's revenue to a high level. Since 2018, the company's revenue has maintained a high growth rate, and in the first half of 2021, KK Group achieved revenue of 1.683 billion yuan, an increase of 235% year-on-year.
As the company continues to adjust the store structure and optimize the operating efficiency, the adjusted net loss of KK Group in the first half of 2021 has narrowed significantly, and the adjusted net loss is 38 million yuan, a year-on-year decrease of 78%.
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