All the time
According to the public information, Guangdong Baoyang Investment Management Co., Ltd., a company affiliated with famous and excellent products, has involved more than 30 legal proceedings, including 9 cases of infringement of design patents and copyright infringement disputes. The plaintiff has many well-known brands, such as Watson's, Music Button and other related enterprises.
Ye Guofu, the global co-founder of Creative Excellence, responded to queries in his speech at the 2018 (17th) annual meeting of Chinese business leaders.
In the speech, Ye Guofu he does not agree with Ma Yun on the new retail concept. He thinks retail is divided into the first half and the second half, the first half is called channel king, the second half of retail is based on products.
According to Ye Guofu, everyone in China who works as a supermarket wants to brand a brand.
Talk about how to build a very high cost performance ratio. Ye Guofu thinks there are six points: three high and three low. That is, high face value, high quality, high efficiency; low cost, low gross profit, low price.
Following is a speech by Ye Guofu, the co-founder of Creative Quality Worldwide (with abridgement):
Tell you about famous and excellent products. I have published a few figures. So far, there are 3400 stores in the world, of which there are more than 2200 in China and nearly 1200 overseas. We are a very young multinational company with more than 79 countries and regions operating. How to do this? I'd like to share with you my views on retailing today.
I think retail is divided into the first half and the second half. The first half is called channel king. What is channel king? That is to find distributors, agents, various channels. So what's the second half of retailing called? I think products are the king. What is product-oriented? Sales are determined by products.
Some people may find it contradictory that famous and excellent products also open stores. Why can they open to 79 countries so quickly? How can you walk so fast? We started internationalization in 2015. We are passive internationalization because many people came to us and asked us to open stores overseas. So far, we can receive more than 100 emails a day. It is the requirement of opening stores all over the world. So we are passive globalization.
So why are so many people from all over the world looking for us to open stores? It's because we see good business in our shop.
We used to talk big and complete, but today is different, we think that consumption upgrading must be a small and beautiful selection era. The Internet makes information more and more transparent. It also makes everyone's time very precious. They are unwilling to spend more time in the shopping process. At the level of shopping, we hope that consumers can get what they need precisely and get what they want.
Ma Yun once said a word.Give you three examples.
Baili spent 2.6 billion yuan to make a premium shopping network. It still hasn't changed the fate of Baili being sold. Is the premium shopping network still in existence today? Darunfa spent 2 billion yuan on flying cattle net. What is the status of flying cattle net today? Metsbonway spent $1 billion on the state-owned shopping network. Has it succeeded? Celebrity products have also been unable to resist doing a business, but did not make money.
So don't listen to Ma Yun, Ma Yun will take you into the ditch, you have to listen to me.
Let me give you another set of examples: Haidilao and millet.Millet has a great reputation in the market. People abroad don't recognize you. It's a company that sells small household appliances. Is there any profit?At that time, millet claimed to have a market value of more than 200 billion US dollars, but now it has a market value of more than 200 billion Hong Kong dollars, and its share price has fallen very badly.Looking at Haidilao, the market value of a hotpot can reach 100 billion yuan. So it's not necessarily important for everyone to squeeze in Internet e-commerce and know what to do.
I think first of all, these failures misunderstand what is called new retail.
Let's see another set of cases: Uniqlo, COSTCO, IKEA and famous products. In 2017, 12 billion famous and high-quality products are expected to reach 18 billion this year. Although many enterprises say it is sad in 2018, we are growing nearly 5 billion to 6 billion this year. How can we grow? I'll tell you next.
Many people say that the most difficult thing to do in recent years is the clothing industry. E-commerce has a great impact on the clothing industry. But isn't Uniqlo a clothing maker? Uniqlo plans to open 1,000 stores in China by 2020, growing at a rate of over 100 each year.
Take a look at COSTCO, 's current feeling that every supermarket in China wants the brand
Talking about originality: I admire Yang Guoqiang very much
I want to talk about ingenuity here. What is ingenuity?
The word "ingenuity" has now been abused by us. We often see many articles in the circle of friends about a small shop in Europe and Japan. The ancestors have been working around this shop for generations. Every day, business is booming. Therefore, ingenuity is to determine whether the leader of the enterprise has invested in the product, which is the standard to measure whether the enterprise has ingenuity.
Products need to be polished with ingenuity. Millet is still very successful in making mobile phones, because Lei Jun is wholehearted in making mobile phones, and every time he goes out, he opens his mouth and closes his mouth to talk about mobile phones, which is the ingenuity that happens around me. According to the idea of product development and industrial base, Dong Mingzhu is much better than Leijun, but because Dong Mingzhu can not give up the Gree Electric, so the millet mobile phone is more competitive than the Gree mobile phone.
I believe that the future competition of enterprises must be product-centered, and product is the first strategy of enterprises. And product-centered is to create a very high cost performance ratio, which is the most important point of competition between retail enterprises and large consumer goods industry. In my opinion, all the enterprises that make high gross profit and high profit do not do much. Louis Vuitton and Uniqlo are far from each other. A great globalized enterprise is one that has a high cost performance ratio. This is the case all over the world.
Speaking of this,Two entrepreneurs impressed me deeply: the first was Jobs.. When you see Apple, Jobs doesn't have a word in every speech except his phone. As soon as many of our Chinese entrepreneurs get bigger, when you ask him how his products are, he says,
Second, I admire Yang Guoqiang, the owner of Biguiyuan.Although there are some problems in Biguiyuan in 2018, I am still optimistic about this enterprise. Yang Guoqiang is over 60 years old this year. I asked him what he is studying every day. He said that I am very excited when I study the Huxing. There is a design institute in Biguiyuan. There are more than 10,000 designers. If Yang Guoqiang finds out that the Huxing is wrong, he calls the Dean and studies together overnight.
Therefore, our Chinese entrepreneurs should not look for the wrong benchmark. If they look for the wrong benchmark, they will die.
Now let's talk about how to build a very high cost performance ratio. I think there are six points: three high, three low. Which three are high and which three are low?High face value, high quality, high efficiency; low cost, low gross profit, low price, our famous products are also this set of play.Millet and Uniqlo also play this game, but they don't share it with the outside world. I just sum it up.
Focus on Uniqlo. Uniqlo's clothing is really in place. Chinese Uniqlo clothing is actually 20% -30% more expensive than Japan's. Uniqlo has a name in Japan called "Uniqlo".
COSTCO not to mention, the average company's gross profit is about 6%, the product's gross profit is more than 14 points to be signed by the chairman personally, otherwise to write a report, can not be on the shelf. IKEA is terribly cheap. As you all know, everything is within 49 yuan, which is very cheap. These are the representatives of the world with very high cost-effectiveness, and they are going to the whole world.
So how to build high face value? Today's post-80s, post-90s consumers and post-60s and Post-70s consumers are totally different things. In the past, any product of ours can satisfy several functions, such as practicability, low price, and good price function. Today, there is a saying called "face value is justice". Pigment value is to increase the added value of products, and products with high pigmentation must be designed.
We talk about marketing, a good name will save 90% of the advertising costs, a successful LOGO you will never forget.I have seen thousands of well-known enterprises'LOGOs all over the world, and found that only these three LOGOs are the most beautiful.
The first one is that LOGO is Apple. What do we see in Apple's mind? Adam and Eve, then Newton, and finally the electronic products we consume, so first of all, when people see Apple, we think about change; second, the name of Apple is remembered by children all over the world, and we eat it every day, very close to us.
The second LOGO is Nike
The third LOGO is called creation
The annual advertising cost of famous and excellent products is no more than 3 million yuan, which is negligible for a company with over 10 billion yuan. We rely on the success of LOGO design.
I often talk about design. Today, Chinese manufacturing ability is very strong, but the most lacking is design. We wear clothes, from socks, underwear, clothing, mobile phones to cars, basically all designs are foreign, all car shape design is in imitation of foreign, mobile phone is the same. Apple designs a
Chinese enterprises should invest more in design. If there is no design to improve brand power and add value to products, it is a silly dream.Many people like to buy luxury goods, not because of the good quality, but because luxury goods have the most cutting-edge and popular design concept. But today, all over the world, Apple is the representative of the popular style of simplicity. I have to deny that in all of our consumer goods industry, the design of the Apple mobile phone is the most beautiful and the quality is the highest. In my opinion, Apple is a very standard design company. It has software development design, industrial design, appearance design, advertising design and so on. Every advertising picture is made by a master, playing the design to the extreme.
So behind the famous and excellent products is also the design, but at such a low price to play the design well, this is very difficult.
We say that there are two principles for the survival of enterprises: the first is the law of differentiation, and the second is the strategy of low cost.Famous and high-quality products are enterprises that combine differentiation with low-cost strategy.
When you see a famous product that only sells 10 yuan, 20 yuan, 30 yuan, but the surface design is very beautiful, it can move your heart at once, this is the business routine.
In my opinion, the three elements of design are series, simplicity and fashion. I think the biggest fashion is simplicity.
COSTCO is the only supermarket with a design team in the world. Any brand of product to COSTCO needs to be redesigned and packaged. So does Estee Lauder, so the shelves are very neat and beautiful. In addition, the price of COSTCO is also very low. COSTCO once had a fight with Starbucks. It is very tragic. COSTCO requires Starbucks to reduce the price when they enter the market. They have been deadlocked for more than five years. Finally, Starbucks honestly cut the price, so consumers will find it very cheap to buy Starbucks coffee powder in COSTCO.
Despite the low price of famous and excellent products, our display, system and design are very simple. Of course, IKEA needn't mention it. IKEA's things are very complicated, but its style is highly unified, extremely simple, extremely standardized and extremely serialized.
We once polished a product
After the design of this water, we found no less than 50 factories to produce it, and only one can make it. He said that this bottle does not need to apply for a patent, because no one can produce it in China. If anyone can produce it, it must be our mould stolen and has problems.
And when I got in touch with the 50 factories, I got more phone calls from factory owners and asked me.
Today, in China, the two enterprises that won the most design awards are millet and famous products.
We took eight design awards in half a year in 2017,
As a designer, it's very complicated to find a factory to proofread something I just told you, but I have a thousand factories in my hand. When I get your design draft, I will tell you which factory can proofing it and sell it in my channel immediately after proofing, so the designer is very willing to cooperate with me.
How to find a good supplier when you are just making a brand?
After talking about high face value, the second is high quality. The best way to build high quality is to find the right supplier and develop good products.
A good supplier can't make a bad product for him. A bad supplier can't make a good product for him. What is a good supplier and a bad supplier? They all have their own standard management system. The question is, how to find a good supplier? How to find a good supplier? What did the famous and excellent products do when they first started?
There are four ways: 1. What does a leader personally stand for, representing your attention; like Lei Jun personally running to Japan for mobile phone chips; 2. Spending money; 3. Make a big order to build a good factory, if you don't have a brand, just start, these three ways should be used at the same time.
In doing business in China, we feel very much that selling things is the first step, the second step is more important is to recover money. These foreign trade suppliers are most afraid of collecting money, and small businesses have no credibility, no brand. What if I give you credit? So big firms don't care about small new brands at all. Only a one-time one-off one-off one million, ten million units, and cash, will they be willing to cooperate. I think if you give Foxconn a one-off one-hundred million units and give you cash, he will kneel down and worship you.
So today, the suppliers who cooperate with famous and excellent products are among the top two in this industry. Even the world-class brand manufacturers, including our knives and forks, are double-handed manufacturers. Over the past two years, we have sold 100 million eyebrow pens for women. Our manufacturers are international brand manufacturers such as Dior and Chanel. Can no such manufacturer have good quality? Will there be a good reputation without good quality?
Low cost low gross margin = low price
The third is efficiency and low cost. There is a certain correlation between the two. Without high efficiency, there will be no low cost. So what must be done to achieve high efficiency and low cost?
The first is the explosive strategy.Apple is the best explosive product in the world. Behind the explosive strategy, you can save a lot of inventory costs. The more SKUs you have, the stronger your inventory, the less competitive your products are. I believe that if you put ten SKU products together on one SKU and blow them up, your products will be competitive. The more SKU products on the surface, the lower the risk, but in fact, the higher the risk of SKU.
We look at Nokia, Motorola, including Samsung, Korea, which develops hundreds of SKUs every year, trying to satisfy the different preferences of different consumer groups, but the results are bad. Apple is a mobile phone. There used to be two colors, one white and one black. Now there are several more colors, but the shape and style are still the same. Who lives better today?
Secondly, scale procurement.Scale procurement is the best way to reduce costs, and it is difficult to reduce without a certain scale of procurement. Famous and high-quality products make profits when they reach 5 billion yuan. I sell the price very low. Only by scale and explosive strategy can we have scale to be competitive. If SKU is more, the scale will drag the enterprise to death. Only one stock will kill you.
Then shorten the channel.。 Our famous high-quality products do not have provincial or municipal generations, only factory to shop, channel is very short, the shorter the channel, the competitiveness of your price, cost is low, if the channel is longer, it is difficult to reduce the price, many channels in the middle will eat up a lot of your profits. So we built seven warehouses in China, and we have warehouses in every country overseas.
The fourth is to improve efficiency.Why did Wal-Mart's model decline? Think about Wal-Mart's 30,000 sq. 100,000 SKUs. It's really hard to go around Wal-Mart and choose one product. But how much COSTCO? From 3000 to 5000 SKUs, what you want and what you don't want can't be seen. This is the effect of explosives strategy and scale procurement.
Finally, let's talk about low gross profit.What does low gross profit have to do with? Relating to the efficiency of enterprises, the lower the efficiency, the higher the gross profit, if the gross profit is low, it will not survive. Don't think that the products of famous and excellent products are cheap and cut corners. We dare not lose a cent in manual and material resources. The products of famous and excellent products are the first-line brands. The knives and forks we sell must be the two-way bidders, but the price is 1/10 to 1/3 of it.
How did you get that low price? Low cost, low gross profit = low price, low purchase cost, low gross profit, low price, if you have high cost, low gross profit and no low price, so low price is a result, we must do the first two processes. The result came out later.
Does not a penny a penny exist?
What determines the quality of the product? Is it reasonable to say "one price, one goods"? Very reasonable, but at present in China is not reasonable.
So what determines the quality of the product? It's not the price but the efficiency of materials and enterprises. It's hard to sell cheaply if the efficiency is low. The same shirt, Uniqlo purchasing cost 100 yuan to sell 199 yuan, a day can sell 1000 pieces, other men's clothing stores, the same purchasing price to sell 199 yuan, Uniqlo's efficiency is higher.
I think the future brand methodology is extremely cost-effective to generate a large number of users, a large number of users generate word-of-mouth, such a brand is the most competitive brand, such as Haidilao. Haidilao also has no advertisements, and many brands come out now depend on word of mouth.
So there is a concept of consumption upgrading: consumption upgrading must be the cognitive upgrading of entrepreneurs and the concept upgrading of consumers.
Why do famous and innovative products sell best in cities like Beijing and Shanghai and worst in third and fourth tier cities? Because the concept of consumers in Beijing and Shanghai is very advanced. Everyone is the idea of high quality, low price and rational consumption. The post-80s and post-90s have begun to play a role. Now the third and fourth-tier cities are still buying LV bags.
So remember: high price high gross margin = bankruptcy, low price low gross profit = richest man.
It's true, not a story. ZARA's boss was the richest man in the world, Bill.