Successful listing in Hong Kong, Shanshan focuses on brand value remodeling

By Flora Zhao

A group photo of the executives of Shanshan, young gold medalist managers, outstanding employees, and the guests

Shanshan Garment was successfully listed on the Main Board of the Hong Kong Stock Exchange on June 27th. Shanshan, a brand that gained considerable fame in Chinese men’s wear industry in the 1990s,intends to rely on the road of listing and financing in the capital market to once again open its own brand upgrade and value reshaping strategy,and promote the development of the garment business segment.

Shanshan Garment was founded in 1989 and grew into the first listed clothing company in China in 1996 with its brand strategy. It is a brand in China that started earlier and had a higher reputation at that time, and it was also the first to launch apparel advertisements in CCTV and the first to open a suit shop in Nanjing Road, Shanghai. In the 1990s, Shanshan’s market share in domestic suits once reached 37.4%.According to the report from China Insights Consultancy, Shanshan is the fifth largest men’s business suit brand in China in terms of retail sales in 2017.

As the holding parent company of Shanshan Garment, Ningbo Shanshan Co., Ltd. split its garment business to be listed in Hong Kong independently. On the one hand, it will help Shanshan’s strategic planning and core business to be more clear and achieve optimal resource allocation. On the other hand, it will also improve the professional management and operational efficiency of the apparel business and new energy business, and improve profitability and sustainable development capabilities. At the same time, it can be affirmed that as the starting point of Ningbo Shanshan Co., Ltd., the garment industry has a special position in the heart of its founder Zheng Yonggang, who has repeatedly said that he will never give up the investment into the garment industry.

On the day of listing, Luo Yefei, executive director and general manager of Shanshan Brand, said in an interview with the media: “The successful listing of Shanshan Garment will build on the strength of Hong Kong’s capital market and the commercial resources of international metropolises to build a more open platform in order to further strengthen the brand remodeling and value enhancement, including further expanding the domestic retail network, improving the supply chain logistics and inventory management capabilities. It is to use such a smart retail model as “data + algorithms + scenarios”to continuously develop new retail quality channels and seize new opportunities to enhance the new image, new value and new status of Shanshan Garment in the domestic retail market.”

“The successful listing of Shanshan Garment in Hong Kong shows that it has obtained the approval of the capital market with its still good internal growth.”Luo Yefei added. Taking this as an opportunity, Shan-shan Garment will focus on both the supply side and the demand side, plan clear strategic directions, place targeted business strategies, focus on product, retail, network,ecology, to achieve both inside and outside high-quality and sustainable development.

On the spot, in addition to the executives of Shanshan Garment, the lineup of young gold medalist managers and outstanding employees was also giving a signal that Shanshan’s top-down, full-fledged brand echelon of talents have been continuously injecting fresh blood to itself. Talent is the most important resource driving the new outbreak of Shanshan. Professional creativity and efficient execution will help Shanshan to take advantage of various favorable factors so as to rejuvenate the vitality of advancing with the times.

Product is king: Accelerated penetration of new consumer groups

After the listing, Shanshan Garment will rely on the precise positioning and design of the two main brands FIRS and SHANSHAN in product design and R&D, to finally complete the self-identity definition of “classic +stylish”.

From the current sales situation, FIRS takes a leading position. As a well-known Chinese business attire brand, FIRS was selected as the official exclusive sponsor apparel company for the ritual staff of 2016 Hangzhou G20 Summit. After the listing, FIRS will continue to consolidate the positioning of China’s classic and quality men’s wear — “originality model”, and further strengthen its quality control as well as the culture shaping of “Chinese gentlemen”.

Zhuang Wei, President of Ningbo Shanshan Co., Ltd., made a speech.

Meanwhile, SHANSHAN, as a “rising star” in the camp of Shanshan Garment brands, has also shown sound growth. In 2015 - 2017,the sales of FIRS brand products accounted for 82.3%, 77.9% and 62%respectively, and SHANSHAN accounted for 0.3%, 9.1% and 29.4% respectively. The growth rate of the new one was faster and the proportion increased significantly.

Last year, Shanshan spent heavily and officially joined the domestic popular actor Deng Chao to sign the contract, aiming to use his fashionable and intelligent temperament to match the product design with more fashionable qualities, and gradually achieve accelerated penetration and extensive cultivation of young and new consumer groups.

The person in charge of the Shanshan Garment brands stated that after the listing, Shanshan Garment will further strengthen the trend forecast of local men’s wear and the study of consumer lifestyles, and increase R&D investment in terms of quality, culture and environmental protection, striving to create a more competitive market structure.

Deep collaboration: Flexible reengineering of supply chain networks

In May of this year, SHANSHAN Brand National Supplier Conference was held in Ningbo with the theme of “Building a Destiny Community with a Combination of Supply Chain, Stores and the Headquarter, Working Together for Wisdom Creating and Win-Win”.

In the previous prospectus published by Shanshan, the next stage,one of the fund-raising flows after the listing will focus on plans to improve supply chain, logistics and inventory management capabilities,including: designing advanced new warehousing and logistics centers;upgrading existing information management systems; introducing advanced warehouse management systems; upgrading the existing inventory sharing and distribution systems; and expanding the existing basic technology setting for information consulting.

This is also highly consistent with the previous supplier conference.In 2018, SHANSHAN has taken promoting the strategic cooperation with suppliers as an important development strategy in order to achieve a full win-win situation with suppliers from the aspects of resource allocation, management and data. In addition, it has proposed the Five-Year Program of the SHANSHAN brand supplier system, which will focus on perfecting the logistics system with the integration of Suqian intelligent storage center, Ningbo logistics center and several regional distribution and dispatch centers, in order to match the rapid response,efficient operation and personalized upgrade of the flexible supply chain.

The person in charge of Shanshan Garment stated that the realization of the flexible reengineering of the supply chain network is based on the deep collaboration and benefit sharing with the suppliers. After the listing, Shanshan Garment will play a further role in the level of capacity and pattern of system operation, maintaining efficient balance between stability and agility as well as scale production and personalized production of the supply chain in the process of upgrading from “wavelike consumption” to “diversified consumption”.

Intelligence implantation: Data driven of retail terminals

The continuous wave of consumption upgrades brings a retail environment where opportunities and risks coexist. After the listing, Shanshan Garment will also accelerate the layout of retail terminals in the country, and at the same time improve the online and offline integrated retail channels — “intelligence implantation”.

At present, with the big data architecture as the core, Shanshan, together with the partners, has successfully developed and implemented “Shanshan Newly Positioned Smart Retail Data Middleground”, completed and closed the whole retail data chain, fully achieving the “collection automation, diagnostic automation, and operation automation” from store selection, commodity operations, performance evaluation, goal setting, commodity allocation, etc.

After the listing, in addition to continuously upgrading the store image and creating a more humane retail experience, Shanshan will accelerate the use of the Internet and Internet of Things technologies to understand consumer demand to drive resource flows, and use big data to drive manufacturing and provide consumers with diversified and personalized products and services to transform from traditional retail to smart retail. The “data+ algorithms + scenarios” smart retail will become the future and core competitiveness of Shanshan New Retail.

Specific paths include: continuing to deepen the smart retail function, and focusing on “community marketing”, “artificial intelligence” and “supply chain empowerment” to achieve a high degree of integration of new technologies and physical industries, and helping retail terminals enter a virtuous circle of “automatic decision-making, automatic operations, and automated learning”, so as to reduce costs and increase efficiency,improve the efficiency of retail operations, and create an open and shared retail ecosystem.

It can be seen that through the strong opportunity of listing on the Main Board of the Hong Kong Stock Exchange, the focus on advancing the brand reshaping and strategic breakthrough of Shanshan Garment is becoming a long-term and devastating way for it to use capital as a lever to surge up the value core. Regarding this, Luo Yefei, executive director of Shanshan Brand,said: “We are committed to the continued entrepreneurial spirit of the brand, explore pragmatic innovation,and face a capital market, we will maintain a more sober attitude and more active exploration. I believe that in the speed of development and efficiency, we can achieve a harvest.”