Chen Huan, head of Lily women's clothing overseas: From the domestic internal volume to see the brand's strategic opportunities to go to sea

At the 2022 SHOPLINE Brand Overseas Online Summit held on April 8, Chen Huan, head of Lily Women's Wear Overseas Business, shared a keynote speech on "Strategic Opportunities for Brands to Go Overseas from the Domestic Roll-in". Chen Huan said that brand going overseas is a systematic project, which is not only a problem for strategic departments and decision makers to think about, but also a problem that needs to be solved by multiple departments of the entire system. He believes that overseas business is not a simple copy of domestic business, and the zero mentality and entrepreneur mentality are very important.

Warm reminder: This article is a shorthand preliminary review, to ensure that the original intention of the guests on the spot, uncut, or omissions, please understand.

The following is a transcript of the speech:

Chen Huan: Dear friends of Ebang, good afternoon!

Now the epidemic situation is more special, we do a simple exchange online, I myself have been engaged in the clothing industry, before coming to Lily in a traditional leisure brand to do domestic operations and channel development, including the development of overseas business, experienced the process of overseas business development from the original brand from 0 to 1, after coming to Lily, in the promotion of overseas business.

Overseas business is a hot topic recently, especially in the post-epidemic era, more online opportunities have sprung up, and today Ebang gave me the topic of overseas business development opportunities from the perspective of "brand involution".

I am not from a strategic background, more from the perspective of the business step by step experience, so most of the content I am talking about today from the perspective of the actual business to do some sharing and suggestions, of course, the art industry has a specialty, we are more focused on the traditional clothing industry and fast consumption industry, there may be some views relatively limited, everyone feels that there is a reason to think and communicate.

The whole content is divided into five parts: motivation for going to sea, brand growth factors, external opportunity points and pain points, case studies, and summary of suggestions.

From the perspective of the motivation to go to sea, because each enterprise is in a different stage, the interest appeal points are different, and the motivation for going to sea is different, summarize two aspects: active and passive. In terms of initiative, before going to sea, follow your own business planning, your own advantages and analysis of the needs of overseas markets, and whether your own resources and overseas resources match, and do something. Passively, it can be understood that, from the perspective of the industry's internal volume, domestic competition has no advantage, whether it is possible to open up a new battlefield, such as whether there are some differentiated ways to play with some mainstream competitors, because opportunities will exist at home and abroad, nothing more than at what stage to seize what opportunities, so some brands go to sea, feel that there are such resources or have such a business demand, do it, and slowly develop their business overseas, which is also a possibility.

Many enterprises, especially before there is a saying that "the world is so big, I want to see", in fact, the same, as the decision-maker of each enterprise will have a strong desire to go outward, the motivation is different, determines that some of the paths we go to sea are different, and there are other aspects of the decision to go to sea, such as the industry, whether it is the product going to sea or the technology going to sea, or the capital going to sea, are not the same, but today mainly to share from the perspective of product physical objects.

Active motivation to think about going out for their own better development, passive motivation to think is to want to survive, want to focus more opportunities on the place where there are advantages, one is better long-term development, one is to survive, these are two different motivations.

Motivation determines behavior, and it also affects strategic direction, phased goals, determination to go to sea, investment of resources, and attitude of resistance to setbacks. The phased goal affects the allocation of resources in the short term and long term of going to sea, because going to sea is also the process of market development and possession, it is not smooth sailing in the road, the phased goal determines what kind of effect you want to achieve at a certain stage, if you can't achieve it, your anti-frustration attitude will also be affected, which determines how far you can go on the sea path.

Talk about brands today, so from the brand growth factors to analyze what internal and external opportunities or challenges brands may face in the process of going to sea.

From the perspective of internal factors and external factors, external cognition of a brand, your economic environment, consumption habits, and purchasing ability are actually the core issues that we brands need to consider when they go overseas, because the differences between these points determine the direction of business development. There are also many internal factors, including brand communication, product research and development capabilities, organizational integration capabilities, and channel penetration capabilities. For us to go out whether your products can be recognized and loved by local consumers, now cross-border e-commerce is good, traditional brands go out, in fact, there are differences, there are indeed some because the product side is doing well, can quickly let consumers identify with the market, because only by allowing consumers to identify can we have more consumption base, can we have more product conversion to promote our internal organizational integration, channel penetration, and invest more resources in these angles, which is the perspective of internal and external factors.

Among the four external factors, if you look at it from the perspective of the brand going outward, what you have to consider is the positioning of your own products, what kind of market it is in line with, these are the objects we need to focus on. Including the local economic income level determines the purchasing power of consumers, consumers' concept of the brand, determines whether the brand is overseas to do more investment in the image of the brand, these are all crucial.

Internal factors, product research and development, first of all, whether the core value of the product can meet the basic needs of local consumers, from the perspective of practicality and cost performance. In the long run, the value of the product is also the service, satisfaction, the product, brand, LOGO to bring what kind of embodied perception to others, this is also very important, is a brand to consider in the process of going out.

From the perspective of brand communication, it is more necessary to ensure that the communication of brand culture is recognized and well known by consumers from the communication carrier of popularity, how to focus on and to the stability of communication content. There is also the reputation of the product, focusing on what kind of product strategy and service strategy to land. From the perspective of integrity, whether the price is stable and whether the product style is stable are very critical factors. Of course, how to build the team, different markets have different ways of landing business channels, different channels determine how your team needs to match, these have first and then, some follow the path of market business promotion to match the channel, or match the team, and some are the overall planning is how to play, with what kind of business team, and then do what kind of organizational structure, this is the first and the last, depending on the path or business stage of each enterprise in the domestic and foreign business development.

Channel penetration, the goal is to focus on which markets, business channel types are online or offline, now we discuss more online business, online also exist in the end to do independent stations or do third-party platforms, from the brand development path, online or offline, more is only consumers familiar with the product or brand carrier, especially from the perspective of doing clothing brands, although everyone talks more about online, but offline channels are also very important to us, Offline means whether to do it in the way of department stores or in the way of shopping malls, or the traditional independent street shops, the concept of street shops was more prominent before China, but most overseas markets are still dominated by department stores and shopping malls. There are also various business models, in the end, all of their direct sales of the game or through the agent, franchisees to promote my brand, determine my brand, products in the process of going to sea your development speed and business coverage.

Having said all this, we have considered so many factors, and from the actual landing of the business, in fact, we are facing more opportunities and challenges. From the perspective of opportunity, everyone is very clear, from the perspective of consumption, China is a big exporter of products, so the product is overseas, whether cross-border e-commerce is popular or whether the brand has influence outside, the image of Chinese products going out or producing a big country is recognized by everyone, so we have a foundation for recognizing products. Secondly, brand consumption awareness is online, and now most of the market consumers have the concept of brand consumption, or even if it is a very backward place, they also have brand consumption awareness, which is also a gratifying point for brands to go overseas, because our purpose is to promote our brand. Purchasing power, each country is very different, but their needs are diversified, the opportunity given to us here is that no matter what kind of product can focus on the target market to do some research, my product positioning is good, price positioning is good, these are able to find opportunities in the market.

The population base is huge and the population structure of emerging markets is young, some of the markets we are looking at now, such as the Middle East market, the Southeast Asian market, the European and American markets do not need to be mentioned, because the purchasing power is there, although the purchasing power in the past two years is not so good, but the foundation is there, but the emerging market population structure is young, which is conducive to the brand in the promotion process The audience is young, or the current channel is promoted through the e-commerce online network, the proportion of young people is a very important opportunity, and the demographic dividend is also there.

From the perspective of the consumer environment, it is two different opportunities online and offline, offline business has also found a lot of markets, even if the Southeast Asian market is relatively backward countries, such as Vietnam, Cambodia, Laos, Myanmar, the development speed of this kind of local shopping malls in recent years is very fast, many are group development, the Middle East situation is more special, the weather temperature is relatively hot, the development speed of shopping malls is still in line with local living habits, consumption habits, The development of group shopping malls can allow brands to have more focused resources to dock, which is a good opportunity.

The rise of e-commerce, everyone talks more, various DTC opportunities, the rise of e-commerce is more due to the fundamental changes in payment methods, and the infrastructure of express transportation is helpful to our business. As far as I know, there are many Middle Eastern and Southeast Asian markets, and many consumers have COD, that is, cash on delivery, but slowly like the intervention of other third-party payment platforms, in fact, the help of cross-border e-commerce business can solve a lot of unnecessary troubles.

Basic support, main business endorsement, brand domestic influence, their own business foundation is a lot of brands to go out of the support point, as well as the intervention of capital, we found that before many brands originally quietly, suddenly made an impact in the overseas market, a lot of capital in the promotion, this is also a good opportunity, as well as government policy support, the promotion of third-party media, especially some of China's social media also occupy a relatively strong market share overseas.

The pain points are obvious, from the brand point of view, there are several core points, the contradiction between the subjective consciousness of the brand decision-maker and the objective reality, as a brand, it has its own positioning and target consumer group, including the pricing of my products, but there is an overall system in the connection, or plays a decisive role. But the overseas market, especially as a new brand to enter, the actual market demand and brand positioning whether to match, this is the current relatively big challenge, as well as the consistency of brand positioning and differentiation of the choice, even if you have done research or in this market has some market opportunities, but the consumption power of this market, consumers' perception of your brand, and the consistency of your brand positioning in the domestic mainstream market is still different, At this time, in order to make the business grow rapidly and abandon the problem of brand consistency, or can I insist on my consistency, to properly slow down the pace of market development or adjust matching resources. Of course, there is also the problem of brand name and brand trademark consistency, this is also currently in the process of doing overseas business in a few friends chat more topics, many brands go out, the original is based on the domestic business, only Chinese name, or an English name, but and some of the meaning of the overseas market is not the same, these to reflect the trademark consistency of the problem, this is also to think about some points.

Product supply chain, there are standardization differences, my safety standards, technical parameters, especially clothing size differences, version differences, this is a lot of brands to go out in the process, especially the traditional brands to go out of the process of facing the relatively big challenge. Now DTC products, including emerging cross-border e-commerce products, in fact, will also face the problem of product homogenization, we through a variety of platforms, a variety of information channels are more, what kind of products sell well, you do the explosive time immediately followed by your competitors, your imitators will come up, which is also the current pain point.

As a brand, it is not only about selling products, but also about the strategy of the entire product, the system of the product, the stability of the product, the differentiation, and the personalized needs of consumers, which will test some of the resources of the brand going outward, and indeed the pain points of overseas going overseas and the speed of product iteration.

From the perspective of channels, we feel very much that in order to occupy a market, the best way to play is to do direct sales, because direct sales can use their own understanding of products and brands to promote, so that local consumers can quickly recognize us, and let the stability get better continuation, but regardless of online and offline, online business flow requires costs, offline business stores to decorate, labor costs, capital costs, team management costs, etc., these for direct profit consumption is relatively large, It may even create challenges that mainstream domestic businesses cannot bear.

If you want to go wholesale business, or take the franchisee's business, whether your brand's influence has enough bargaining space in the local area, what kind of price to wholesale is also a pain point we face, because the structure of direct operation and franchise matching determines the speed of your outlet coverage, so if these problems are not well solved, the speed is relatively slow, everyone is in the rapid layout, especially some cross-border e-commerce DTC channels, they push the flow speed is indeed very fast, the influence is also very large, Compared to your slow speed, it is very challenging for us.

The burning money of independent stations is also a pain point, even if you do cross-border e-commerce, do DTC, if you do it in the way of independent stations, it is true that the test of early drainage costs and conversion is also very large, if you do independent station product SKU is rich enough, whether consumers continue to consume on your platform, this is also a pain point.

From the perspective of the platform, many brands say that they do not necessarily do independent stations, they can do platforms, and we have also studied some platforms, but most of the platforms are product-oriented promotion ideas and operational ideas, not branded operation ideas, is it beneficial to the sustainable development of brands? In fact, it is also a question worthy of discussion.

There is also the investment of the enterprise, overseas business everyone wants to do, but in the process of doing it, because of the speed and performance, it is ultimately decided that your company will not give you the opportunity to invest in the second time under the condition of limited resources. There is also the professionalism of the team, the phased goals, whether it can achieve short-term profitability.

The front is that online and offline will face such a common disease, but online business, now everyone says that doing DTC, warehousing and logistics is a great challenge, especially the cost control and the timeliness requirements of products reaching consumers, the safety of product circulation process and the loss of consumer return rates How to balance.

Cross-border marketing, the balance of traffic costs and conversion rates, whether the customer retention rate is up to my goals, and some external factors, such as the political environment, whether local policies to enter the market allow these brands to grow locally. For example, in the process of doing overseas brand promotion, we will encounter some countries in order to protect the development of local supply chain systems and labor will limit your products, how many products you must produce in my market, or have higher standards to land, which is obvious. Recently, we have talked more about Indonesia, which has introduced a lot of such policies, and Iran has also been like this before, requiring your brand to have 20%-30% of the products produced locally. There is also economic policy, and now there is the uncertainty of the war, the uncertainty of the epidemic, like the Russian-Ukrainian war, Russian customers and Ukrainian customers have no way to operate the market normally, so the shipment of products will also be affected, which are the pain points currently facing.

Case study, there are a few cases I want to share with you:

Case one: There are several brands here, these brands in the domestic shopping malls or mainstream cities may not be able to see, or their share is not necessarily very high, the development speed of this brand overseas is indeed very fast, can even do a year to open hundreds of stores, such as a certain brand, they do the strategy is to use the product angle to quickly occupy the market, the biggest feature of this product is that my category is rich enough, my price unit price is low enough, through the price strategy to fight. We have recently several friends are also talking, they can open hundreds of stores a year, occupy a lot of market share, this is the product point of view, into a market explosion, the core product is good, in fact, there are still advantages. From its establishment to its business development, the Mingchuang premium brand is the same business path, with a very fast development speed and a very fast breakthrough. The implication is that it is crucial to create products that meet market needs, and business development depends on whether overseas business models can be replicated. The biggest inspiration to me is that marketable products are the golden key to entering the market and quickly opening overseas markets, but the sea of products does not represent the sea of brands, because here we still need to focus on consumer portraits, and we must do some promotion through various ways. Now the so-called brand going to sea, everyone is based on China's environment is more to mention how Chinese brands go to sea, but in my case, these brands are not playing the concept of China, their brand background is either the concept of Europe and the United States, or the concept of Japan and South Korea, from the product point of view, they have won, they have gone out, but from the perspective of the brand, I personally think that there is still a long time to go, Or from the perspective of Chinese product brands, they at least don't have much courage to say that this is a brand from China.

Another point to say to everyone, the brand to go to sea is a systematic project, not only the output of the product, not only the need for strategic departments, decision-makers thinking, but also the need for the entire company, the entire system of multi-departmental coordination of the process, because the essence of the brand is actually the owner of the brand through their own core products, services, advantages to distinguish from competitors, our values, products through a fixed concept, behavior, visual, auditory way to form a standardized system, Through the rapid iteration of products and services to attract and satisfy consumers, influence the audience, and affect the long-term, specific, valuable brand culture identification and trust system, I think the essence of the brand should have more, all-round investment, not only the product has advantages, it means that the brand has advantages overseas.

Case two: is the traditional way to go to sea, here is the Heilan home and balala, from the perspective of market development in recent years or from the perspective of doing brand, whether it is domestic or foreign, these two brands have an attitude, more is the output of brand culture, to study the local market demand under the premise of product brand positioning, the product output, the culture of my brand to export, these two companies more with the help of the traditional physical store development, through the store brand concept to spread, Of course, it will also be combined with the needs of local consumers, for example, if you combine some products and publicity in the Middle East market and the East Asian market with the habits of local Muslim religious festivals, this is a good way.

I want to express another point of view, what is the relationship between our trademark and brand, because on the basis of case one, just said that some brands have gone out, and now more are some products going out, many people think that this product sells very well in the market, register a trademark, think that this brand going out is successful, but I think from the practical point of view, the trademark is not equal to the brand, because the brand will highlight its functionality and quality assurance, it is a valuable embodiment, this is the product given, Whether the brand can be accepted is more of the concept of economic value or the concept of consumption habits, so in the perspective of market research, product positioning, research and development, promotion of the angle to do deep things will make the brand's popularity, reputation, loyalty to be better reflected, the formation of a better consumer identity, this is very meaningful, not in a certain market to register a trademark to think that the brand is out, this is one-sided.

Case three: Everyone discussed more is SHEIN, shein's development is a myth and a legend, but more is aimed at what kind of product positioning the overseas market wants to do, what kind of brand to do, the early stage is more low price, more styles, through the traffic dividend to create a hit, to brand communication so that consumers recognize, quickly let local consumers think that such a product, such a brand can be accepted by me.

Through this case, I want to convey another meaning, whether we are doing overseas markets or domestic markets, we must recognize more internal and external constraints, and formulate reasonable business paths and development strategies under the premise of recognizing constraints.

BEFORE SHEIN's success, or before it was influential, we were not professional in the apparel industry or not deeply cultivated in this field may not know what such a brand is doing, but it is successful, because it can avoid the chinese market competition environment, to open up the low-end cheap product line in Europe and the United States, in fact, it requires a lot of market research actions, including the process of whether it is clear about its own advantages.

The scale and influence of the brand in the local market is actually a double-edged sword for the brand to go to sea, and the brand can provide the endorsement effect of capital, resource integration, and communication and promotion in the early stage of the brand going to sea, but the brand will have a restrictive effect on the development, brand positioning, resource allocation and interest requirements of the overseas market. My last job is also a clothing brand in The country, but also a very good brand, at that time the boss was also very confident to do the overseas market, and also made a lot of investment, but the initial development is also very smooth, opened a lot of stores, but because there are too many successful experiences in the domestic market, many times the domestic successful experience is used in the overseas market, such as opening a relatively large area of the store, what kind of brand building, etc., in this process, the positioning of the brand determines your overseas market, There are many levels that limit the speed of your development.

What I want to share with you is that overseas business is not a simple copy of domestic business, the mentality of zeroing out and the mentality of entrepreneurs are very important, and we will also be affected by motivation in our frustrated mentality.

Having said all this, it is more of a sharing and summary of all my previous experiences, although sometimes it is only a few words, but the suggestion and summary point I want to give you is that from the perspective of brand going to sea, there are different stages, and my personal view is that it is defined as different stages of 1.0 to 5.0. Pure product output of traditional enterprises often stay in the 1.0 stage, focus on brand output, in the overseas channel layout, the supply chain has not been perfected when the solution is 2.0 stage, although business development, if you have channels in the overseas market, there is more concept of brand output, you pay attention to the adjustment of the market supply chain, and are willing to do some localization attempts according to the needs of the local market, I think it belongs to the 3.0 stage. On the basis of all the previous businesses, the localization development of overseas business brands has really been realized, which is indeed remarkable, and we can define it as 4.0. The 5.0 stage is to achieve local localization and form an integrated interaction on online and offline resources, which is the ultimate goal that most brands want to do when they go global.

To implement such a goal, we must think from several points: First, comb through internal resources, look at external opportunities, in the end my company's background, my business foundation and brand positioning, industry status, product advantages, team advantages, whether I can achieve different stages of demand, in the end is now in the 1.0 stage, or the 2.0 stage, or the entire resource can match 3.0, which is to be considered in the overseas business thinking process. Under the premise of this thinking, we will do some market tests, including the preparation of consumer recognition, with the help of the rise of e-commerce and the genes of their own business to do better business planning.

Second, in the case of business status quo cognition to find a breakthrough direction, in the end to the product point of view to do the market opportunity first, or the first let the brand output, is to play the path of the brand to go to sea, in the end with what kind of way, is direct or franchised, or through capital operation to acquire some brands, merge some enterprises, and local enterprises to do joint ventures, joint ventures, joint ventures, this is the breakthrough direction to be found before going out in the premise of their own business status quo and internal and external resource integration.

Third, do a good job in the first few points at the same time, more focus on their core advantages, lock the target market, the market is very large, China's more than a billion people, indeed also feed a lot of brands and enterprises, there are other markets outside Of China, whether it is Southeast Asia, the Middle East, or Africa, nothing more than what kind of products, what kind of advantages to match, I can get resources in which markets, which for us after these analysis and research, if you can find the breakthrough point of the market, the development of the brand The rapid promotion of products is actually a crucial role.

Fourth, after doing all the analysis, product positioning or brand positioning, we should clarify the phased goals, and match effective resources and channels according to the phased goals, any boss will have a return appeal while investing, so in a certain stage of the pursuit of brand communication speed or product share in the local market, or the pursuit of profit orientation, will determine what kind of resource investment, into what kind of channels, in what kind of model to do, This is DTC products are more outward, indeed have made certain achievements, but they are currently staying more is the product of the sea, in the brand deep overseas business sustainable development process may also face a challenge, through several rounds of diversion, the brand is recognized by consumers, the product has also made a lot of performance, but how to continue in the market in the future let consumers think that this brand is worthy of long-term attention and consumption, how to achieve online and offline interaction, most brands are also thinking about such problems.

From the perspective of landing strategy, it is nothing more than "people, goods, fields", what kind of way and what kind of strategy the market is to develop, what kind of market is it focused on, whether to do product testing through rationalized pilots in the early stage, and let local consumers recognize my products through brand promotion. Product strategy is more based on market differentiation, combined with the particularity of the channels to be entered in the process of business planning to do product matching, of course, more focus on the needs of target consumers.

From an organizational point of view, it is important that we do business at the same time, and the degree of specialization of the organization needs to be cultivated and strengthened according to the type of business. There is also organizational stability, if because of the development of overseas business, in the early investment angle or business resources matching angle to invest a lot, but the entire strategy and strategic direction of the goal in the short term did not achieve more short-term profit goals, this time often many companies will launch a great challenge to the existing team, resulting in the instability of the team, this is as a decision maker of the enterprise and overseas business decision makers to bear the point, to do some thinking about the stability of the team, Pay more attention to long-term development. In the process, there must be a full authorization for the entire business, because the difference between overseas business and domestic business is that many local resources and decisions are good, many teams are good, in fact, information is shared, the channels for obtaining information are diversified, but overseas business often relies on overseas business teams to do business promotion while obtaining first-hand information, so if you can do full authorization and trust, you will do better in business decision-making.

I take the Southeast Asian market as an example, combined with the special situation of the apparel industry to do a case study of market strategy, from the perspective of clothing, first of all, where the advantages are, the brand wants to go to sea, the market to be selected and whether the culture is close to whether the Chinese products are accepted, whether the body shape matches our products, whether the tariff angle has advantages, all determine what kind of way the clothing brand lands in terms of choosing the market. These decisions are the key to whether to change the supply chain in the early stage, whether to change the product and invest more resources in the business.

From the perspective of the situation, we have to analyze different markets, whether it is consumption power or localization brand competition pattern, we need to study, each industry faces competitors, faces the process of whether my products are recognized in the local area, such as how to adjust the proportion of product prices in product output, these are also the sources that need to be analyzed.

From the perspective of model, it is necessary to make corresponding channel matching models and profit models according to market demand and business goals.

Finally, summarize the following points:

Brand going to sea is a systematic project, which is not only a problem for strategic departments and decision makers to think about, but also a problem that needs to be solved by multiple departments of the entire system;

Marketable fist products are the golden key to quickly open the target market, and the success of the product going to sea does not mean that the brand has been successful;

There is no good or bad channel type and business model, and what meets the brand's phased goals and market demands is the best;

Overseas business is not a simple copy of domestic business, and the zero mentality and entrepreneur mentality are very important;

The brand needs to go to sea: clear strategy, clear thinking, correct attitude;

In conclusion, I think:

Brand going to sea is not only the output of products, but also the output of culture, online or offline, franchise or direct operation, just the difference between the promotion carrier and the main body of operation, to solve the problem of how fast to go, brand decision-makers on the brand to go to sea confidence, determination and patience ultimately determine how far the brand can go to sea.

Finally, thank you for listening, welcome everyone to discuss the topic of brand going to sea, so as to complement each other's advantages, share resources and go to sea in groups.

Thank you.