Bo Yang: Entering the Department Store Industry to Create a New Model of "Brand Business"

In Ningbo, a business transformation from industrial capital to commercial capital has quietly emerged several years ago. Since the beginning of last year, Ningbo Boyang Group has also innovatively put forward the idea of ​​“brand commerce” and started its plan to enter the department store industry.

From the end of 2004, in less than a year, Ningbo Boyang Group spent hundreds of millions of dollars to acquire and build three large-scale department store commercials of tens of thousands of square meters each, which is an area of ​​20,000 square meters of Ningbo New Jiangxia Shopping Mall, with an area of ​​1.6 10,000 square meters of Yuyao Changfa Commercial Building and 10,000 square meters of Nanchang Boyang Commercial Building. This well-known home textile and apparel manufacturing company in China, while its top ten brands have been booming, why should it make a big push into the department store industry, and when the macroeconomic environment is relatively tight? Bo Yang's move triggered people's doubts.

“Making tens of thousands of square meters of shopping malls is not a new topic for us. We have been operating hundreds of home textile and textile flagship stores. We have more than 2,000 specialty stores distributed throughout the country and our business areas add up to more than 20 Million square meters.” Bo Yang Group Chairman Lou Juchuan answered in an interview with the China Economic Times.

He told reporters that Bo Yang's entry into the department store industry is mainly based on two considerations: The first is to use these terminal markets to consolidate and expand the existing home textile and clothing line brands of the Group, especially in second-tier cities and township markets. The second is to use the opportunity of traditional department stores to face upgrades and changes, to build Boyang’s unique “brand business model” and establish Boyang’s commercial brand in each city. From the point of view of the opened shopping malls, these goals have basically been met. The next step is for the group company to increase its brand mall construction efforts.

It is understood that in Ningbo, textile and garment companies move from industrial production to commercial terminals, and Bo Yang is not the first. As early as a few years ago, Youngor, Romon, and other clothing companies purchased commercial shops across the country and opened their own brand flagship stores. As small as hundreds of square meters, as large as tens of thousands of square meters. The facts show that the transformation of these companies' operating methods has not only resulted in the rapid expansion of their operating scale, a significant appreciation of the purchased commercial real estate, but more importantly, the problem of default on the purchase price and lack of business autonomy has also been solved. As it is an independent operation, the degree of marketability of the company’s products has greatly increased. Insiders in the industry even asserted that the Ningbo-based clothing brand owns its own business terminal and can successfully bring any clothing brand to the national market.

Ju Juchuan analyzed that there are two extremes in the current business: First, large supermarkets and professional chain stores are booming, and excessive competition is starting to appear; second, traditional department stores are gradually weakening. why? The reason is that the traditional department store business model has a problem.

According to him, Boyang is currently implementing a program called "Brand Business Model" to integrate and transform traditional department stores. According to the plan, every major shopping mall that Boyang acquires, integrates, or newly builds will become a personalized brand mall, emphasizing differentiated operations. According to the characteristics and needs of the city where each shopping mall is located, an independent brand will be set up. It will not engage in similar chain businesses because it is affiliated with Bo Yang.

Ju Juchuan analyzed that China’s current economic development is swift and violent, and this momentum will surely continue for a long time. For cities with a per capita GDP of more than 3,000 US dollars, business demand will have surprising growth in the coming years, and the booming of the new round of department stores is an inevitable trend. Bo Yang will seize this opportunity to integrate various resources to meet the needs of consumers with a personalized department store industry. For some small and medium-sized cities with per capita GDP of more than 1,000 US dollars, the department store industry will also have the opportunity, but only have the appropriate market and product positioning. According to the level of development of different cities, consumption levels and customs in different regions, Bo Yanghui launches department stores of different formats.

Fan Jiang, general manager of Boyang Group Investment Company, told reporters that apart from the three large department stores that have already opened, there are 4-5 companies to be opened and are currently negotiating. It is expected that Boyang will have more than 10 large-scale department stores within three years and more than 50 large department store groups within 10 years. Bo Yang plans to use its commercial terminals to double its domestic sales of textile and apparel brands within three years in the country, quadruple its number within five years, quadruple its revenue within four years, and generate sales revenue of more than 10 billion yuan in the entire commercial sector. Among them, more than 20% of sales products are produced in Ningbo, thereby promoting the further development of Ningbo's industrial economy.

10 years ago, Boyang Group became the first domestic company to bring home textile products into the domestic market in a large scale, and drove the entire industry to flourish. 5 years ago, Bo Yang took a leisurely and multi-brand strategy to promote the third take-off of Ningbo garment industry. This time, Boyang's innovation in traditional department stores will inject new vitality into Ningbo's economy and bring more market and competitiveness to Ningbo products.