Byte's fast fashion independent station, closed on a new node in the spring. From the exposure of byte out of the sea fast fashion project to the shutdown, the industry and investment circles have triggered countless discussions, about the outlet, project progress, the reason for the shutdown and so on.
However, recently there is also news that the project is still continuing, AndbyteDance has acquired a number of fast fashion independent stations, all of which are located in Guangzhou. The closest place to China's garment flexible manufacturing industry.
The abundant production capacity of the supply chain and the gradual maturity of flexible manufacturing are one of the core reasons that attract countless Internet giants and entrepreneurs to enter the fast fashion sea. Tens of thousands of yarn factories, textile factories, printing and dyeing factories, and garment factories south of the Yangtze River have spawned SheIn with revenues of more than 100 billion yuan, and Shenzhou International, which has made garment foundries into decent businesses with a market value of nearly 200 billion Hong Kong dollars.
A consensus is that to cultivate the next SheIn, Shenzhou International, China's apparel supply chain has great potential. However, the recent brief collision of byteDance, the king of traffic, and China's clothing manufacturing resources, did not quickly spawn a strong or popular fast fashion brand.
Why didn't the traffic giant with "banknote capability" quickly create the next SheIn? What kind of opportunities can the flexible manufacturing industry of clothing, which was once enshrined as an "altar", grow?
Flexible manufacturing and then on the "altar"
The general perception is that as long as the domestic clothing manufacturing resources are abundant enough, the brand supply chain can be built no matter what.
However, the fact is that at present, at the production end of China's footwear and apparel, suppliers are still mainly small and medium-sized factories and small workshops. For example, Huidong, one of the production areas of women's shoes in China, has more than 2,000 women's shoe factories in a small town alone, but they are basically small workshops. There are many small towns like this in the Pearl River Delta region.
In the production process, every piece of clothing and every pair of shoes is based on the procurement of raw materials such as yarn and blank cloth, and then goes through the processes of spinning, weaving, dyeing, printing and embroidery, production, etc., and finally sent to the brand warehouse or consumers. On this complex production chain, thousands of large and small factories grow, including yarn factories, textile factories, printing and dyeing factories, garment factories and so on.
In order to reduce their own inventory and solve the problem of unstable online shopping orders, overseas brands need a stable, efficient and flexible supply chain system.
Around 2008, the concept of flexible manufacturing appeared in The Chinese garment industry. So far, China's garment flexible manufacturing industry has experienced four market peaks.
The first time was to learn Zara to do fast fashion after the listing of Milbank, but at that time, Milbank was a franchise agency system, the proportion of self-operated stores was small, the ordering initiative was in the hands of franchisees, and the Chinese market around 2008 did not have the logistics capabilities and information network capabilities required for flexible supply chains, and finally Milbank's flexible supply chain construction ended in failure.
The second time was around 2013, when the first wave of players who ate the Tao brand dividend began to focus on creating flexible supply chains, such as Handu Clothing House. At that time, the supply chain system of Handu Clothing House was able to achieve 50 new products in a single day, return orders measured by data model, and complete production from 7 to 15 days.
The third time was in 2015, the rise of "net red brands", the traditional supply chain organization method can not meet the requirements of internet red e-commerce "small, more, fast", so there are small and medium-sized internet celebrities and designers who have the need to build personal brands, and designers began to send orders to companies with crowdsourcing capabilities, so a number of flexible supply chain platforms also emerged at that time, such as red clothing micro factories, gongchao technology, and youyi.
The fourth wave of the market came to the overseas brands led by SheIn.
The story of SheIn building a flexible supply chain is no stranger to everyone. In 2017, SheIn's annual revenue increased by 2.5 times to 4 billion yuan, and an important reason for the breakthrough in revenue was that SheIn achieved a flexible supply chain in that year, and the supply chain system has begun to have a fast-rebound factory with an annual revenue of about 20 million yuan.
In 2021, SheIn's revenue exceeded 100 billion yuan, and according to an industry source close to SheIn, SheIn averaged 3-4 million items in and out of the warehouse every day.
Another industry insider estimated that if 4 million production orders need to be completed, according to the bottleneck of "daily processing orders" in a single factory, the entire supply chain system needs to manage and dispatch about 6,000 factories and tens of thousands of suppliers of noodle accessories.
In order to manage such a large number of factories, and to ensure that suppliers submit products that meet the quality, SheIn has spent 10 years to "control" every aspect of the supply chain planning, design, plate making, orders, surface accessories procurement, production, quality control, and the degree of management even involves the supplier's factory equity ratio, team allocation, etc.
And this requires a lot of manpower, material resources, and financial resources from the beginning.
It is difficult for small and medium-sized brands to cross the threshold
Supplier cooperation, product quality, supply chain capacity, fast response efficiency, supply chain management talent qualifications, etc., are all factors that need to be controlled by the brand organization's supply chain.
This also means that the threshold for clothing brands to self-organize and quickly reverse the supply chain is not low. Therefore, at present, in addition to SheIn, Zaful, Fine Carving and a very small number of head fast fashion overseas brands can organize their own flexible supply chain, for most of the small and medium-sized or newborn overseas brands in the market, the single sales scale is too small, the order is unbalanced, and it is difficult to have an exclusive supply chain system.
For overseas brands that organize flexible supply chains, problems in any supplier and any link may lead to the collapse of the rapid response function of the supply chain. "The brand and the supplier are two-way choices, and if SheIn can't give a stable order, the supplier will not cooperate with it." A SheIn supplier plant head told 36Kr to go to sea.
"The three core elements of the apparel supply chain are order resources, processing capacity resources, and surface accessories resources." Liu Mingguang said. Liu Mingguang is the founder of Guangzhou Jianpai SCM, successively served as SheIn supply chain consultant, vice president of supply chain of PatPat, a mother and baby overseas brand, and participated in the construction process of SheIn supply chain management system from scratch.
Compared with ByteDance's Dmonstudio, from the perspective of order resources, according to Similarweb's data, its daily visitors were less than 10,000 before the shutdown. But there is also speculation in the industry that Dmonstudio is only a test product, not used as a real order flow entrance.
Whether ByteDance is currently vigorously operating other fast fashion independent stations is unknown, but the layout on the production side of the supply chain can be explored through public information.
In February 2021, a wholly-owned subsidiary of ByteDance took a stake in Feiliu Technology, a clothing flexible supply chain service company. The main business of Feiliu Technology is to provide SaaS products to garment factories, cross-border e-commerce, designers, brand customers, emerging channels, and provide cross-border sellers with flexible clothing supply chain services for small singles and fast reactions. It is reported that Fei Liu Technology has won the title of "Best Supplier of 2021" by SheIn.
Investing in cross-border sales is also one of the ways for Internet giants to build a supply chain system, and Alibaba's fast fashion brand Allylikes is also reported to have used this method. In March 2021, ByteDance invested in the cross-border e-commerce platform StarLink through its affiliates.
By the middle of 2021, it is reported that byteDance's veteran figures have created a fast fashion brand enterprise in the sea - unlimited heartbeat (the name of the independent station is unknown). Subsequently, ByteDance affiliates also invested in unlimited shares.
ByteDance's real self-operated supply chain construction and deployment began in August 2021. According to Tianyan, ByteDance's subsidiaries have established two companies at the same time, Shanghai Xingchen Yuedong Supply Chain Management and Shanghai Daoqu Yue Animal Flow Technology, and their business scope includes customs supervision of goods warehousing services and supply chain management.
According to the official website of the closed Dmonstudio, it will launch more than 500 new products every week, and the goods will be shipped within 5-15 working days after the user places an order. However, at present, the head brand can generally be shipped in 1-3 working days, and the number of new models in the week is in the thousands, taking Dmonstudio as a case to speculate on the current supply chain response speed of ByteDance, it may not be time to compete with the head of the sea fast fashion brand.
The solution may appear
For the Internet companies that do not sink deeply in the garment manufacturing industry, it is fortunate that the low level of digitalization in the garment industry, the lengthy and complex production links, and the small and medium-sized production capacity that occupy the main body in the market are too fine, and some links have been "transformed" by the Internet.
In the garment manufacturing process, a number of "cloud factories" that integrate the production capacity of small and medium-sized factories have emerged.
Their operation mode is to connect customer orders of clothing brands and garment factories with SaaS, connect to spinning mills, weaving factories, printing and dyeing factories, and then disassemble customer orders, and the platform organizes factories to collaborate on fabric production and production through the Internet of Things and single system.
Sinbad, a core SheIn supplier, is one of them. In addition to serving large cross-border e-commerce companies such as SheIn, Sinbad's revenue also comes from providing support for local traditional clothing brands to transform to data-based flexible production, and providing standardized products such as SaaS tools and ERP to small and medium-sized enterprises.
Another case is SecondSeason Technology. In the early years, SSYV Technology started with management consulting + software services, providing software such as clothing cloud supply chain management system, clothing intelligent manufacturing execution system (MES), clothing standard working hour system (GST), etc., and more than 200 garment manufacturers have been produced. Since 2019, SecondsYou Technology has tested the waters of a new business - "Cloud Factory", and can now complete the design-production-delivery cycle of a new product in as little as seven days.
Sinbads are one of the most favored types of companies by capital today. Sinbad completed the angel round and Pre-A round of financing last year; Fei liu technology completed a total of 200 million yuan financing of A1 and A2 rounds last year, and ByteDance participated twice; and SecondYou Technology also completed the Pre-A round of 50 million yuan financing in February 2020.
The digitally transformed factory and supply chain system may be more compatible with the "bytes", and to a certain extent, it can better solve the problem of unbalanced order volume in the early stage of brand growth.
But if ByteDance's strategy in the fast fashion track is still continuing, and hopes to build its own global brand, despite some external "assists", it is still inevitable to build its own supply chain system in the future.
Many people have asked why SheIn is successful. Sinbad founder once said: "When everyone is enjoying the overseas traffic dividend, they choose to invest a lot of management energy and resources in supply chain transformation, rather than into traffic realization." ”
Wen | Chang Weiqian
Editor| Zhao Xiaochun
Figure | Unsplash
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