VANCL responds to question: We will not be the second PPG

On December 22, according to the article “The VANCL Risk Accumulation was Alleged: The Cost of Channels is Higher Than Shops,” a clothing online shopper VANCL (Fanke Eslite) stated in a statement today that it is VANCL's mission to be cost-effective.

It is understood that the recent article "PPG completely closed: the court frozen bank deposits to remove office equipment," the article in the B2C industry provoked thousands of layers of waves, PPG is the originator of B2C apparel sales, PPG declared complete failure also makes VANCL, Masamar Masuo Waiting for followers are questioned.

Today, there are media reports that VANCL is not cooperating with leading apparel OEMs, and that VANCL's cost is lower than that of traditional shops and its affirmation and non-professional apparel companies in quality control.

VANCL responded to these queries one by one today. VANCL emphasizes that since the date of birth, it has cooperated with well-known garment factories and focused on producing high-quality products. "The first-class quality of clothing is the foundation of VANCL's survival."

VANCL pointed out that for online channels, garments can be placed directly from factories, there are no agents or distributors in the middle, and there are no costs such as store decoration and rent. Therefore, online sales can achieve lower markup rates.

VANCL stated that while providing consumers with clothing products at various price points, they are more concerned about product quality and will not sacrifice quality in order to reduce costs.

Previously, TANCL founder Chen aged said in an exclusive interview with Tencent Technology that the key to a company’s success or failure is not the operating model but the team’s operations. It cannot be said that VANCL and PPG will have the same fate.

The following is the official statement of VANCL:

Cost-effective clothing is our mission

Recently, some media raised questions about the production and management of VANCL. Vancl thanked the media for its concern and responded to related questions as follows.

Reply one: Long-term close cooperation with famous foundries

Since the birth of Vancl, it has been working with well-known garment factories to focus on producing high-quality products. At present, there are dozens of cooperative factories and they are continuously seeking partners who can provide better products and services.

With regard to the cooperation with Shandong Luthai, VANCL has so far cooperated with the production of fabrics and garments and is a very close partner. In November this year, a batch of fabrics co-produced by VANCL and Shandong Lutai has just been delivered, and there are still a number of fabrics currently under production. Delivery is expected in March next year.

With regard to the cooperation with Esquel Hong Kong, VANCL started cooperation with Hong Kong Esquel in fabrics and garments since 2008. According to information on Esquel's official website, “Eddie is a world-renowned brand (such as Tommy Hilfiger, Hugo Boss, Brooks Brothers, Abercrombie & Fitch, Nike, Lands' End, Muji, etc.) and a large retailer (such as Marks & Spencer, Nordstrom and Jusco) provides garment manufacturing services."

In addition, VANCL also cooperates with Shenzhou, Baofa and other manufacturers. Shenzhou is the largest knitwear OEM company in China. Clients include international famous brands such as NIKE, ADIDAS, PUMA and FILA. Baofa is a foundry supplier of denim brands such as DIESEL, REPLAY and LEVI'S.

Therefore, it can be said that VANCL's fabric procurement and apparel production are basically all cooperation with major manufacturers, and most of them have international OEM experience. The first-class clothing quality is the foundation of VANCL's survival.

Respond 2: The network channel cost is lower than the offline shops

As for the case of the Beijing Wangfujing shopping mall mentioned in the media report, the joint sales gross margin (provided by the contract) of the suppliers received in 2008 was 17.8%. We reviewed the annual report of Wangfujing Department Store in 2008, of which 17.8% was the gross profit margin of the company's department store retail business, not the so-called supplier joint sales gross margin (the contractual agreement is divided into). The other mentioned Nanning Department Store, Chongqing Department Store, Hefei Department Store and other listed companies, 13% - 14% of the data are also the company's operating gross margin, rather than the proportion of co-sales.

In fact, in the traditional shopping malls, the ratio between the shopping malls and the brands is not exactly the same, and will generally be more than 30%. For commercial secrets, the mall will not disclose this information.

In addition, the general clothing brand's price for distributors is 5-6 percent off, and there are expenses such as store decoration, rent, shopping guide personnel, etc., which will account for 40% of the actual selling price. 50%.

For online channels, garments can be placed directly from the factory, there are no agents or distributors in the middle, and there is no storefront decoration, rent, etc. Therefore, online sales can achieve lower mark-up rates and provide high-quality products at reasonable prices. This is the advantage of e-commerce, and it is also one of the fundamental reasons for the vigorous development of apparel e-commerce in the last year or two.

Reply three: Cost-effective VANCL brand core

Regarding the price of VANCL garments, due to the large amount of orders we have in co-operation with Daeichi, the production cost can be made even lower, and the prices of some of the categories are lower than last year. There are also some categories because of different fabrics, processes, etc., to provide more price products for consumers to choose.

Compared with the beginning of its establishment, VANCL has accumulated a lot of experience in product design, production and quality control, which has continuously improved product quality. In terms of quality control, layers of quality inspections have been set up in the areas of fabric selection, factory production, warehouse storage, and so on. The warehouse is also a full inspection system, which even exceeds many traditional clothing companies. Even if the price of some categories due to the increase in production costs and stringent quality control, we will still insist on the idea that quality is higher than price.

VANCL pays more attention to product quality while offering consumers a variety of apparel products at various price points. It will never sacrifice quality in order to reduce costs. We don't want to make the products with the lowest price, but to do the most cost-effective clothing. Providing cost-effective products for Chinese consumers is the core concept of the VANCL brand and the most important reason why VANCL is recognized by a large number of users.

Compared with traditional channels, e-commerce does have some deficiencies. To this end, we have implemented a variety of services, such as cash on delivery, on-the-spot trials, and unconditional return and replacement for 30 days, in order to enhance the user experience and have been greatly welcomed by consumers. In this sense, VANCL is a brand that is based on user experience.

Finally, thanks again to the media for their attention to the Chinese clothing e-commerce industry and Vanke Eslite. For a clothing brand that has only been established for two years, VANCL has received too much honor and pressure, and providing Chinese consumers with simple, comfortable and cost-effective clothing is our corporate mission. In order to "use the most economical price and make our users easy to wear without losing fashion," we have been working hard to live up to the expectations of our users.