The apparel industry is “old trees sprouting new shoots”, attracting institutions such as Hillhouse Ventures, IDG, Huaying Capital, Wuyuan Capital, Legend Capital, and Matrix Partners to enter the industry quietly.
Institutional analysis points out that China’s clothing market has a scale of 2 trillion yuan, but it is large but not strong. Under the new economic development trend, the “big upgrade” of the industry, dominated by changes in the needs of the new generation and improvements in supply-side efficiency, is creating great investment opportunities for the globalization of Chinese brands.
“Zhiyi Technology” completed Series B financing
In September this year, the emerging clothing brand bosie completed hundreds of millions of yuan in Series B+ financing, which will be used for products R&D and supply chain upgrades, etc. Bilibili and Wuyuan Capital led the investment, and Jinshajiang Venture Capital also participated in this round of financing.
Also in September, BEASTER, a cutting-edge domestic clothing brand, completed its first round of financing of more than 200 million yuan, led by Zhuace Capital, followed by Huaying Capital and Belle Consumer Fund, and Taihe Capital served as the exclusive financial consultant.
Not only clothing brands, but also the supply chain links of the clothing industry are facing intensive financing under the new consumption trend.
At the end of July, the intelligent clothing design supply chain platform “Zhiyi Technology” completed a 200 million yuan Series B financing, led by Hillhouse Ventures and Wanwu Capital, Yonghua Investment and old shareholder Legend Capital Following the investment, Sichuan Bank Capital served as financial advisor.
In August, clothing supply chain SaaS service provider Lingmao SCM announced the completion of nearly 100 million yuan in Series A strategic financing, with GGV Capital and Yunqi Capital co-leading the investment. Lingmao SCM stated that this round of financing will be used to further build core products, rapidly expand market channels and optimize team building.
Earlier, the one-stop supply chain platform for apparel accessories “Accessories Easy” completed hundreds of millions of yuan in Series B and Series B+ financing. Among them, the B round of financing was led by Lightspeed China, followed by Matrix Partners China and Bell Capital; the B+ round of financing was jointly led by Bell Capital and Legen Capital, with Matrix Partners China, Lightspeed China and Zhen Fund additional investors.
In addition, clothing e-commerce platforms are also favored by capital. In June this year, the fast fashion export cross-border e-commerce brand “full volume and full speed” completed US$100 million in financing. Investors include Capital Today, Sequoia, IDG, Shanhang Capital, Wuyuan Capital and other institutions.
The “big upgrade” of the apparel industry
Zai Zhenge Investment Director According to Kuangwei, the model of traditional clothing brands is: watch shows to understand fashion elements – designers make patterns and send them to factories for production – suppliers purchase and then sell them in stores. The whole chain is very long. Merchants do not collect user data. They usually make massive payments and have to dispose of unsold items. When the goods are out of stock, there is no time to add orders, so the circulation efficiency is very low. Therefore, the biggest pain point in the clothing industry is inventory. It can be said that 90% of clothing brands die from inventory backlog.
Under the new economic development trend, the clothing industry is ushering in a “big upgrade”, which is the main reason why capital giants have entered the industry.
First of all, in terms of demand, Ai Xiao, vice president of investment at Tsingshan Capital, pointed out that Generation Z’s aesthetics are very diverse and focus on self-expression. Bosie’s diverse styles and the concepts it advocates are exactly what the new generation of young people The embodiment of breaking the rules. Public information shows that Bosie was founded in 2018. It is a fast fashion brand that started with clothing and mainly targets young people under the age of 25. Since its establishment, the brand’s annual sales have exceeded 300 million yuan. In this year’s “Double 11” event, the brand’s sales exceeded 100 million yuan within one and a half hours, exceeding the half-year sales of 2020.
Secondly, supply-side efficiency is improved. Wang Weiwei, managing partner of Huaying Capital, pointed out that China’s supply chain foundation and e-commerce channels are already strong enough. Coupled with smooth e-commerce and social networks, users have long been accustomed to online shopping. Kuang Wei pointed out that the new organizational structure has improved production efficiency in all aspects from production to sales and reduced inventory pressure.
Optimistic about these tracks in the future
Kuangwei pointed out that for the “post-90s” and even Generation Z, clothing has changed from functional products to commodities with strong social attributes. , is a social tool to show your attitude towards life. “Clothing brands are not a winner-takes-all business, but brand premiums come from users’ recognition, otherwise all we make is the price difference in the supply chain.”
Quang Wei said that she is currently focusing on two major directions: First, Efficiency improvement opportunities at every stage of the supply chain, from requirements gathering to design to supply chain. The second is the opportunity for China’s supply chain to “go overseas”.
Wang Weiwei pointed out that clothing brands can be roughly divided into four categories: sports, basic, fast fashion and luxury fashion. Most entrepreneurial opportunities are concentrated in the first two categories. One is SaaS in the apparel industry. The upstream and downstream sectors of the apparel industry are large and dispersed. Regardless of the SaaS or industrial Internet model, there are considerable opportunities. The second is investment opportunities for specific groups of people and scenarios, such as the modern design of traditional cheongsam, recently popular outdoor brands, etc. </p
