The importance of PPG failure warning marketing cost control

December 2009, the batch of Kyrgyzstan clothing (Shanghai) Co., Ltd. (ie PPG) closed completely, the assets used to repay the arrears of advertising costs. It is reported that, PPG was founded in 2005, through the B2C website and call center sales of men’s shirts, early rapid growth in sales. In early 2008, is PPG traced to the operating conditions, and the frequency of advertisers, debt disputes between suppliers reported.


as the forerunner of Chinese clothing B2C industry, the development process of PPG, the operation of the market operators and the development of China’s apparel industry B2C has implications.

a, PPG growth, to provide a model for the latecomers to enter

Ari analysts believe that the early growth of PPG and the improvement of the external environment, the company’s own product positioning is closely related.

1 external environment improved, making online sales of clothing possible

on the one hand, China’s online shopping environment has improved, the penetration rate of Internet penetration and online shopping has been increasing; on the other hand, China’s garment industry has become increasingly standardized and mature. Chinese clothing manufacturing enterprises through long-term foreign OEM production experience, and constantly improve the skills; the foreign trade situation is increasingly grim situation, many companies began to demand in the domestic opportunity. These make it possible for online clothing sales.

2 product entry point is good, easy to open the market

early PPG men’s shirts as a starting point for online sales. Ari analysts believe that the high degree of standardization of men’s shirts, coupled with the requirements of men’s shirts low, large demand, and men are easy to accept the form of online shopping, making the early PPG can quickly open the market.

PPG rapid growth in the early years, led the development of China’s men’s e-commerce market. After the market, the emergence of VANCL, BONO, B2C and other clothing enterprise network. IResearch research data show that in 2009 China B2C apparel online shopping market transaction size will reach 2 billion 400 million yuan. The sales of VANCL after Taobao mall, 2009 sales in the third quarter has 100 million yuan, the product line has also been extended to women’s clothing, accessories and other categories, Home Furnishing.

two, PPG failed to provide lessons for the latecomers

Ari analysts believe that, PPG eventually downhill, and its management and operation of the entire team is closely related. Among them, the lax control of advertising costs is the biggest mistake in PPG operations. Marketing cost control leads to adverse, the enterprise cash flow stress; product quality crisis, exacerbated the pressure on enterprise funds; after the launch of the discount site, can not return the funds effectively, exacerbated by the enterprise public opinion crisis; lack of information communication channels, contributed to the reality of the crisis.

1 advertising costs to lax control, leading to tension in the capital chain



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