Ou Shili founder's "ambition": to create a new light luxury brand

Under the dark canopy, the Shanghai Post Museum in the style of the British Metro station welcomes the debut of the new Coven Garden fashion brand. Models wearing design elements such as rose, ginkgo biloba, leopard, etc. slowly veered to the audience on a T stage made of conveyor belts, and the Hercules Group, which is owned by Coven Garden, has also moved toward its ambitious. Next stop.

Prior to this, the Hercules Group, established in 1999, has created its own women's brand ochirly, Five Plus, children's wear brand Love ysabel and fashionable men's wear brand TRENDIANO.

"As the Coven Garden name means: the garden of smart women, it is the brand positioning high-end women's clothing, the target consumer group is relatively mature compared to other women's brands of Hercules, they are urban women aged 30 to 45. The pursuit of a wonderful and changeable lifestyle, with stable economic conditions.” Zhang Jingjing, general manager of Coven Garden, introduced in an interview.

For the positioning of the light-hearted EuroTimes and the younger Five Plus, the Coven Garden, a women's brand whose price ranged from RMB 2,000 to RMB 8,000, is a brand-new field in Herkie's existing brand architecture and is close to the Hekki Group. The person revealed to “First Financial Weekly” that Herkie had planned to enter the high-end women's wear market early on. After conducting detailed investigations on mid-to-high-end women's clothing consumers and the market, he officially launched the project in July 2013.

Such decisions are more or less related to the increasingly fierce competition in the popular fashion market. In the past few years, international fast fashion brands such as ZARA, H&M, etc. have brought a considerable impact on domestic apparel companies.

“The impact of international fast fashion brands on domestic popular fashion brands is relatively large. Compared with them, the overall strength of domestic apparel companies is too weak,” said Cheng Weixiong, executive director of Yahoo Holdings’s directors, who analyzed “First Financial Weekly”. In terms of consumer progress and segmentation, there is indeed a demand for high-end products in such a group.In the past, the product prices of this market were either too high or too low, and now everyone is slowly turning to the development of this market. The profit margin of the market is much higher."

The increasing popularity of light luxury brands in the Chinese market also confirms the strong demand for high-end products. In the current slowdown of the Chinese luxury goods market, both the American luxury brands Michael Kors, Coach, Kate Spade, and Furla still have a beautiful performance. Coven Garden's pricing overlaps with the price of light luxury brands.

For Hercules, the advantage of extending the brand to the mid-to-high end lies in the fact that in the past, the Ou Shili brand had accumulated a certain customer base for the group. Ma Gang, an apparel industry observer, analyzed in an interview with “First Financial Weekly”: “Each group is There is a need for consumption upgrades, which also promotes the upward extension of the Heely Group's brands and products. But whether we can do it well depends on how large this group is."

How large is the customer group of EuroTimes and how much purchasing power they can generate, which is always a mystery. The industry can only describe "certainly occupying a certain share in the domestic women's wear market". The low-key HuJi founder, Xu Yu, is rarely discussed in public. Group and brand development.

It is reported that when Ou Shili entered the Beijing market for the first time in 2001, but when he did not have brand influence, Ou Shili withdrew his cabinet in the same year because of poor sales. After two years of preparation and brand promotion, Ou Shili returned to Beijing, and in the short span of several years he opened more than a dozen stores in Beijing. In 2007, European sales force began to rise rapidly, accompanied by the brand's crazy shop. After the brand effect, the European Union forces have opened stores in shopping malls that are only slightly known in second and third-tier cities.

However, Zhang Jinghao said in an interview with foreign media that the overall business growth of Herki is decelerating under the impact of China's economic slowdown. The above-mentioned sources close to the Hewlett-Packard Group revealed that compared with the escalation of consumption of the original customer groups, Herkie hopes to attract more and absorb new customer groups.

This is precisely the biggest challenge after Coven Garden was launched. "In the high-end and above market competition, brand awareness is very important, it determines whether consumers will choose you. In the mid-range and low-end markets, more products are competing, but the expensive brands are not Because of the product itself, it is the symbol of culture and fashion that it represents. The precipitation of Chinese brands in this area is not enough," said Ma Gang.

The above-mentioned close to Hekki people also admits: “There are no lack of products in Chinese companies doing well, and now they are gradually realizing the importance of building brands. In the mid-to-high end market, the spending power of Chinese consumers is beyond doubt, but how to get them? Love you and let them know that you are the most important. A brand is a long process from brewing, fermenting, to ascending and maturing."

In Cheng Weixiong's opinion, Coven Garden must have a good grasp of pricing at this time. In the price range of RMB 2,000 to RMB 8,000, if Coven Garden's main products are biased toward focusing on more than RMB 5,000, the development of the brand will be very limited because China’s existing industry base is not enough to support a luxury. The birth of the brand, the brand's connotation is not enough; while the price of 2,000 to 5,000 yuan concentration belt can still have some room for development.

According to Herkie's plan, Coven Garden will open stores in major cities in China such as Beijing, Shanghai, Guangzhou, Shenzhen and major capital cities in the coming year. The first store will open in Guangzhou in August 2014. In addition to the challenges of brand awareness and content, Coven Garden's key to creating products is also.

“Purely the change in price will ultimately fail to meet consumer demand, and the products and the connotation of the brand must be equal to the living conditions of the target group it faces.” Cheng Weixiong pointed out. In the communication with the media, Herkie emphasized that it will use the design style and fabric to create the characteristics of Coven Garden products.

If the establishment of Coven Garden, its own brand, is only a Chinese mid- to high-end market in which Hercules wants to capture large profits and market space, then it is really a little underestimated by the founder of Herki and the current Chairman and Chief Executive Officer of the Hercules Group Xu Yu. "Ambitious", the Wenzhou businessman who likes to stand in the spotlight, was also one of the sponsoring shareholders of the VIP Club, a special sales website that was listed on the NYSE for five years.

“In the next three to five years, Coven Garden will continue to focus on the establishment of brand awareness, the creation of store fashion images, and the creation of product features, as well as an international layout,” said Zhang Jingye, “Coven Garden. There are plans to open stores overseas."

However, for the specific time and location of overseas shop, Zhang Jinghao did not disclose. “Actually, in the next two years, EuroTime will open stores overseas, and it should start from other Asian countries outside of China. And in the next two or three years, Herkie will also launch fashion lifestyle brands.” Introducing people from the Hewlett-Packard Group.

Those who are familiar with the development of Herki must remember that it acquired the Italian Sixty Fashion Group's business in the Asia-Pacific region two years ago and took over the women's brand Miss Sixty and the men's brand Energie. With the integration of this business and Herkie's own brand The planning has made Hurkey’s ambition to create a diversified and full-fledged fashion group in the international market.

A large part of the impetus for such a rapid expansion of Herki came from the support of his strategic partners. In December 2011, L Capital Asia, a private equity fund controlled by the French luxury goods group with 10%, strategically invested 10% in Hercules for $200 million; in December 2012, Hercules became the most fashionable, design and artistic commodity. Concept store 10 Corso Como partners in Greater China.

These strategic partnerships give Herkie not only funds, but also support from various sources such as brand management and promotion of fashion symbols.

"Whether from brand management development, channel strategy, supply chain, international retail expansion, or human resources, all brands including Hercules and Coven Garden will receive strong support from L Capital Asia at different levels," said Zhang Jingwei.

Simply opening a store overseas does not allow a Chinese brand to put on an international coat. Even with the so-called advanced management model and cultural and creative foundation, it is difficult. Hekki’s road to Michael Kors also needs a clearer road map for consumers and fashion circles.