Who "killed" women's clothing e-commerce?

Spiral Labs

2024-06-29 09:20Spiral Lab official account

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01In recent years, a number of leading e-commerce women's clothing stores, such as Girl Kayla and Lola Password, have closed their stores and cleared their warehouses due to the deteriorating e-commerce environment.

02 The average return rate of Taobao women's live broadcast is as high as 60%, and the Douyin price comparison system has also led to a sharp decline in the natural flow of merchants.

03Due to the high return rate, merchants have to reduce production details such as materials and tailoring in order to maintain profits, resulting in frequent quality problems.

04 On the other hand, content e-commerce communities such as Xiaohongshu, Bilibili, and Channels have relatively low return rates, and do not fight price wars, which has attracted some white-label women's clothing merchants.

05However, for low-end women's clothing sellers who only rely on price advantages, content e-commerce platforms may not be the best choice, and other development strategies need to be sought.

Technical support is provided by Tencent Hybrid Model

Author丨Kwai Chung

Editor丨Nuts

Cover source丨Unsplash

Online women's clothing stores are almost dry.

On the eve of 618, Taobao Hardware Crown Store "Girl Kayla" ran away with nearly 35 million yuan in arrears; Halfway through 618, the 5 million fan store "Laura Code", which started from Douyin, broadcast live with tears and officially announced the closure of the store; On the same day that "Laura Code" closed, Taobao's other million-fan Golden Crown store, "Retro Big Bang", also announced the termination of operations.

According to public reports, since the beginning of this year, a number of leading e-commerce women's clothing stores have closed their stores and cleared their warehouses.

These women's clothing stores all have affordable prices, more than one million followers, and monthly sales in 4 or 5 figures. Without exception, they all seized the traffic dividend of Taobao in the early days or the live broadcast of Douyin to quickly gain momentum, and then retreated after the traffic on the station peaked.

When it comes to the reason for store closures, most of them attribute it to the "deteriorating e-commerce environment". "Affordable women's clothing is now the more you sell, the more you lose." With soaring return rates, expensive streaming fees, and forced prices to drop again and again, many women's clothing merchants who have been doing it for almost 10 years are gradually overwhelmed and ready to clear their warehouses and leave.

1

The return rate of the explosion is pulled

Since the day we moved to online, women's clothing has had a higher-than-average return rate. Last year, some women's clothing merchants revealed that the average return rate of Taobao women's clothing live broadcast has been as high as 60%. Since the beginning of 618 this year, some sellers have posted their return rates of 70%, 80%, and even 90% on social platforms, bluntly saying that "I can't do it anymore".

When asked about the reason, some merchants believe that the platform's price comparison function "pulls the return rate to the top". In the first half of last year, Taobao began to launch the "same price comparison" function on the station after proposing "price power". This year, after Douyin adjusted "price power" to a priority, it also launched a "price comparison system" in March.

Many e-commerce merchants complained, after the "price comparison system" was launched, the natural flow of the store fell sharply, "Click into a 5-piece mobile phone case, you will see 3 similar recommendations, click into 3 and it will push you with two, and click into two and have 1." There will always be goods that are lower than your price, and all the paid streams will be invested in competitors. ”

After Pinduoduo relied on the low-price strategy to soar, other e-commerce platforms also gave more weight to the price in the algorithm, and if the merchant did not reduce the price or follow the price, there would be no traffic. For merchants and factories with a high return rate, if they want to maintain profits, they have to cut corners on production details such as materials and tailoring.

In addition, there are many dropshipping sellers who look at the goods from the Internet, or take the goods from the online wholesale stalls, and the photos provided by the factory or stalls are hung in the store, and they have not seen the real thing. As a result, mismatched goods and quality problems are becoming more and more common.

Merchants have a headache for the high inventory brought by returns, and consumers are also full of resentment about the clothes they have arrived. Some "victims" summarized the current situation of women's clothing purchases as, "Pre-sale for half a month, waiting for a tattered piece, you will never be able to buy the one on the anchor." "The cinched waist became a cinched waist, the spaghetti straps became wide strips of cloth, and the midi length became short.

This year, 520 and 618 have many consumers who bought women's clothing and finally chose to return it all, and many people on Xiaohongshu expressed helplessness, "This year's return is worth the sum of previous years, and the courier brother already knows me." ”

In addition, the long pre-sale period is also one of the reasons for the high return rate of women's clothing. In order to reduce the cost of returns, many sellers will carry out pre-sale in batches, send the first batch of pre-sale returns to the second batch of consumers, and the second batch of returns will be sent to the third batch, and the pre-sale time is getting longer and longer.

Live streaming is already prone to impulsive consumption, and the cooling-off period for buyers is too sufficient, which makes the already high return rate "worse".

From a consumer perspective, the large number of returns is also due to the fact that the cost of returning goods is getting lower and lower. This year, some e-commerce platforms began to force some merchants to apply for freight insurance, Ali 88VIP returns are free, and even door-to-door pickup. The cost of returns tends to be close to zero, and some orders are covered by shipping insurance, and consumers can make some money from it. Some wool parties have even started a business of "freight insurance".

Forced shipping insurance has resulted in a large number of invalid orders. Recently, Taobao and Pinduoduo have even seen orders for women's clothing that have been returned for more than a year. In this regard, the founder of Inman's parent company issued an article "calling on relevant departments to intervene in cracking down on "compulsory freight insurance"".

Sell 10 pieces and return 8 pieces, coupled with the short sales cycle of less than a month for women's clothing itself, it is easy to overstock inventory of new products. Some sellers are even very worried about explosive products, "As soon as the replenishment was completed, I found that other stores had made imitation versions with lower prices, and the traffic was cut in half, and the replenishment became inventory in seconds." ”

"Destocking" has always been the life-and-death disaster of the retail industry. For women's clothing sellers who rely on online, public domain traffic is becoming more and more expensive, and it is becoming more and more difficult to leverage ROI, and private domain has become an important channel for digesting inventory.

In the past two years, celebrity women's clothing stores such as COCO ZONE and Libelyn sisy, which have maintained high growth, have accumulated many loyal users by relying on their accounts and communities. Senior e-commerce practitioner @ Fengzhong's factory director mentioned that because of the accumulated trust, there is little impulsive consumption in the private domain, strong purchase intention, and lower return rate.

However, most small and medium-sized businesses do not have the investment and personnel scale required for private domain construction, and can only survive between high inventory and low conversion.

2

It's not easy to have a white label either

It is not easy to establish barriers in the women's clothing industry, on the one hand, the exclusive layout is easy to copy, and on the other hand, the similarity of the source of goods is high.

Many old women's clothing stores that started online still take goods from wholesale stalls after doing large-scale, or place orders after slightly modifying the existing style of the stalls, and have never established their own design team, and the new ones rely on stalls or factory development.

For example, the "girl Kayla", who ran away in arrears, has been ordering on credit from the Guangzhou Shahe clothing market. According to the Blue Whale News report, "Girl Kayla" has the right to speak with a large order, does not sign a contract, takes the goods verbally, lengthens the account period, and the payment owed after the thunderstorm involves more than 300 suppliers.

There are many buyers like "Girl Kayla" who take goods at the stall in the Shahe clothing market. It's just that most small and medium-sized customers are not like "Girl Kayla" who can delay the account period and need to pay in cash. In the view of Spiral Laboratory, it is also this part of the business that is most affected by the low-price war.

Now, with the support of the platform, stalls and factories in the upstream of the supply chain have also begun to broadcast themselves and build their own brands. Douyin, JD.com, and Taobao are all vying for factory owners and small and medium-sized businesses at the source of the industrial belt. Taobao has classified live streaming as one of the four major businesses of content e-commerce, with a cash subsidy of more than 1 billion yuan within one year; In April this year, Douyin launched a 50% GMV cashback incentive for some businesses in the industrial belt.

At present, clothing wholesale markets such as Hangzhou Sijiqing, Guangzhou Shahe, which focus on low-price clothing, and Shenzhen Nanyou, which are biased towards high-end women's clothing, have all run out of million-level live broadcast rooms. In addition to the self-built live broadcast room of the stall, there are also many full-time buyers who mainly focus on sweeping goods in the designated wholesale market, which are also quite popular on Xiaohongshu and Douyin.

When the first-hand supply with more price advantages begins to face consumers, those stores that play the role of dealers are bound to be squeezed, especially the affordable women's clothing with a unit price of less than 200 yuan. There isn't much room for price reduction.

In the past two years, Handu Yishe, Yinman, Cracked Silk and other once smash hit cheap Tao brand women's clothing are facing the dilemma of traffic drying up and declining performance. The closure of the Lola Code store may also mean that the once smash hit brand women's clothing is about to start to decline.

3

Is the content e-commerce community the new hope?

Compared with traditional e-commerce platforms, Xiaohongshu, Bilibili, and Channels, the three content e-commerce communities that have begun to develop in the past year, have a return rate of women's clothing that is still lower than the industry average.

According to public reports and relevant responsible persons, the return rate of women's clothing on Station B and Video Account is about 30%~40%, while Xiaohongshu is lower, and many fashion bloggers who have transformed into buyers can even control it within 20%.

The most important thing is that these content e-commerce communities do not fight price wars. There is no low price and no mandatory freight insurance.

According to NielsenIQ monitoring data, in 2023, the sales of content e-commerce in the online channel of China's FMCG retail market will increase by 55.9% year-on-year, while the sales of integrated e-commerce will decrease by 5.8%.

The return rate is low, the repurchase rate is high, and the platform will not force merchants to blindly compare prices and reduce prices. Will there be a way out for white-label women's clothing that is not moving on Doutao, if it turns to a content platform that still has a growth advantage?

For white-label women's clothing, compared with the impulse of Dabo, self-broadcast is a more cost-effective way to connect with consumers. At present, in addition to Station B, which still insists on open-loop e-commerce, Channels and Xiaohongshu are encouraging merchants to settle in the store.

In the early stage of the growth of the video account, it was mainly based on store broadcasting, and because the volume of merchants was still in the stage of staking land, the degree of white-label competition was relatively weak. Xiaohongshu merged its buyer operation with merchant operation business last month, and is ready to vigorously support store broadcasting. Many merchants and service providers have reported that although Xiaohongshu's total sales are not as good as other platforms, it is better because of the high quality of users, and the conversion and repurchase are considerable.

Another common denominator between these two platforms is that they both have a high average order value. This year's TOP10 women's clothing sellers on the 618 video number total list @王王王大头, one of the best-selling products in their stores is a vest skirt of 899 yuan.

In Channels and Xiaohongshu, users are more willing to place orders for a sense of trust than price, and low-price promotions are not popular, so merchants need to spend more effort on creating characters and establishing daily content styles.

Some practitioners believe that content e-commerce is more suitable for high-end white brands with certain product power and originality, as well as niche brands that are less well-known than big brands. For low-end women's clothing sellers who only have price advantages, it is not a very friendly choice.

There are many white brands that have taken advantage of the wind of the new platform to reap excess sales, just like the Lola passwords who took off on Douyin at the beginning. However, with the expansion of the scale of the new platform, the return rate and homogeneity will also increase.

At that time, the businesses in the industrial belt will have a price advantage, and the white labels that are good at making content will have loyal customers, while a large number of small and medium-sized businesses that are biased towards the role of dealers will once again face the dilemma of being shuffled out and looking for a new position.

Perhaps for small and medium-sized women's clothing sellers, compared with looking for new platform dividends, it is more important to seize the time to grow up before the dividends have subsided, and have a more solid source of goods and higher bargaining power in the supply chain.

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