The demise of a popular women's clothing store on Taobao

Taobao's popular women's clothing stores were once a trendsetting trend, but with the changes in the market and the intensification of competition, the survival status of these stores is also undergoing earth-shaking changes. This article tells the personal experience of a Taobao women's clothing store owner, how he went from the boom period of the industry to the end of the store closing step by step. It also discusses in depth the impact of factors such as the soaring return rate, market competition, and platform policy changes on Taobao women's clothing stores, as well as the mental journey and difficult choices of store owners in the face of industry challenges.

In July this year, Zheng Enyi, who had been selling women's clothing on Taobao for 15 years, finally made up his mind to close his store. He started working on Taobao after graduating from a technical secondary school and witnessed the growth of women's clothing stores on Taobao. He started by buying goods from the wholesale market and doing customer service himself, and later he made his own patterns and established a company, with an annual revenue of over 20 million.

He was one of the first to catch the trend of Taobao women's clothing stores, saying that it was an era when Taobao stores flourished. He especially remembers the listing of Ruhan Holdings in 2019. The company was called the first Internet celebrity e-commerce stock, and its founder Feng Min specifically thanked Taobao when it went public.

2019 was also the high point of Zheng Enyi's women's clothing business, and he has been on a downward trend since then. He has tried many ways to save himself in the past few years, such as opening up new niche tracks and operating on multiple platforms, but none of them have been successful. In the first half of the year, he made a turnover of nearly 10 million, but in the end he still lost hundreds of thousands.

But losses are not the main reason for closing the store. He said that he couldn't continue because he had no confidence. In the first half of this year, the average monthly return rate of his store has reached 73%, a number he has never seen in more than ten years of working in the industry. It is not because the clothing is poorly made - more than 90% of the return orders have only a few simple words as the reason, "not suitable, not liked". Taobao's shop assistant did not come to retain him, and there was not even any communication. For many Internet celebrity stores with more than one million fans that announced the closure of stores on the platform this year, Zheng Enyi's women's clothing store is really too insignificant. After all, even Zhang Dayi has closed her store.

01｜Completely lost confidence

At the end of September, I posted a notice on my own Taobao women's clothing store "Zheng Baiwan Little Man's Wardrobe", announcing the closure of the store, and officially bid farewell to the e-commerce clothing industry where I had been engaged for 15 years.

But in fact, the decision to close the store was made two months ago. I still remember clearly that day was July 7, the 618 promotion in the first half of the year had just ended, which was the end of the first half of the year. At that time, we were faced with questions such as whether to continue, what the impact of giving up, how to disband, how to repay debts, and even how to develop after returning to my hometown.

Zheng Enyi issued a store closure notice

I struggled for two or three days, wavering between persistence and giving up. This decision was too difficult to make. I started doing e-commerce when I was 17 or 18 years old, right after graduating from technical secondary school. I opened my first Taobao store in 2009, and it has been 15 years now. When you have to say goodbye to these things, you really feel like you don’t know what else you can do in this life.

In the past 15 years, I have experienced both highs and lows. Our annual revenue once exceeded 20 million, and the fans of our two Taobao stores also reached over one million. I have also started over again several times. When I couldn't run the online store, I went out to work, serving dishes, doing customer service, taking photos, etc., and continued to run the online store after saving money. At that time, I felt that e-commerce had great potential and would definitely make money, but it is different now.

After struggling for a few days, I finally made up my mind and decided to close the store. There was really no other way. This market was no longer the one I was familiar with. I could not see any hope, and the continuous losses made it difficult for me to continue. But even if more funds came in, I might not continue to gamble. This was also the most important reason why I decided to close the store. I had completely lost confidence in this market.

In the first half of this year, our turnover was nearly 10 million, but in the end, we still had a net loss of several hundred thousand. Losses are not a problem. We have just started to invest in this small wardrobe in the past few years. In the initial investment stage, we would lose 200,000 to 300,000 a month. It is normal to lose 2 to 3 million a year.

The core reason is that there is no future. As I wrote in the store closing notice, the return rate of more than 70%, freight insurance, cross-store discounts, and overtime compensation all weighed on me. I could not see any hope.

In 2019, our return rate was between 10% and 30%, and never exceeded 30%. But in the past few years, the return rate of e-commerce clothing has continued to rise. Take our company as an example, our return rate has basically soared by 5 percentage points every six months, from 30%, 35%, 40% to 60%.

Last year, our business was very difficult, with a return rate of 50% to 60%. At that time, we thought that this year would be better, but unexpectedly, it was even worse. This year, our return rate has exceeded 70%, and the average is around 73%.

As far as I know, most of my peers have the same return rate, and other popular Taobao stores are probably about the same. Some of my friends are in a harder situation than me, and some have even fallen before us. Some people still want to hold on, for example, after the 618 shopping festival is over, they want to try their luck on the autumn and winter products during the Double 11 and Double 12 shopping festivals. But I believe the result of holding on may not be very good.

For example, the recently closed Taobao online celebrity store Fan Zhiqiao, which was a Taobao triple crown store with more than 5.7 million fans. Why do we say that it closed before Double 12? If you continue to sell, you will continue to lose money. You can't solve the high return rate, so why continue to sell? It's better to close before Double 12. In the past, we all desperately wanted to participate in big promotions like Double 12, but now we are afraid of these big promotions and want to close the store before Double 12. With the end of this wave of year-end promotions, I estimate that more stores will announce their closures next year.

02｜Early low-price sales

I started doing e-commerce in 2009. At that time, e-commerce was still in its early stages, and many people had never shopped online. People didn't know much about e-commerce at that time. When I told my family that I was doing e-commerce, my relatives and friends would ask what the hell this was. College graduates have to find jobs, but you technical secondary school students should just work in a factory. Why do you do these things that are not your job?

But I think this is an opportunity. I started out selling men's clothing. At first, I would go to Guangzhou's Shangxiajiu and Zhuangyuanfang pedestrian streets to shop. I would take a small digital camera and a newspaper. When I saw a good item, I would lay the newspaper underneath it, take a photo, and then post it on my online store. I would make a profit from the price difference. But at the beginning, I didn't make much. For example, after bargaining with my boss, I got a price of 30 yuan for a piece of clothing. After taking into account the 8 yuan round trip bus fee and the 10 yuan shipping fee, I would still lose money if I posted it on my online store for 50 yuan.

But I was really happy at that time. You put clothes on Taobao, and sometimes the computer would make a ding-dong sound, indicating that someone was asking about it. You would then quickly pack and ship the clothes. After shipping, I would always look forward to customer feedback. If a customer gave you a five-star rating, I would be so happy and excited for a long time. There was basically no such thing as returns at that time. To put it bluntly, returns were also troublesome. Express delivery was not well developed at that time, and there were few express delivery stations in many places.

Men's clothing is not easy to sell. After a few months, I saw that other people's women's clothing business was good, so I started to switch to women's clothing. There are many specialized women's clothing wholesale markets in Guangzhou, such as Shahe Women's Street, Shisanhang, etc., and everyone buys goods from here. These wholesalers have cooperating couriers, and the nationwide delivery fee ranges from 6 to 8 yuan. If you just start with one or two orders, they may not pay attention to you, but if you place 30 to 50 orders steadily every day, they will treat you well.

There was already a price war in that era. Everyone basically bought goods from wholesale stalls, and the goods they bought were all similar in style. They even stole pictures from online stores and directly hung pictures of big internet celebrities in their stores, such as the earliest spicy peppers, Anna, etc.

You buy a piece of clothing from a wholesale stall for 30 yuan, and the express ticket is 5 yuan, which is a cost of 35 yuan. You sell it in the store for 39.9 yuan, and someone else sells it for 38.8 yuan. The goods are supplied by the stalls, the pictures can be stolen, and express delivery is convenient. Later, Taobao can also put it on the shelves with one click, and gradually everyone has turned to low prices and large quantities.

At that time, I shipped hundreds of pieces a day and hired employees. I made one or two yuan per piece of clothing. After deducting the rent and loss, I probably couldn't make more than two or three thousand yuan a month. To put it bluntly, you are just selling in large quantities, distributing goods from stalls, and you can't make money.

Later, I couldn't afford to waste time. I thought that this kind of volume would not last long, so I thought about transforming into a brand. At that time, Taobao was also supporting Taobao Mall (the predecessor of Tmall), so I wanted to learn how Taobao Mall worked. But brand stores are different from C stores like us. You have to start a company, register a trademark, etc., and the investment in all aspects is greater. I calculated at the time, and I didn't have enough money, so I had to work to earn money.

But I didn’t work just to make money, I mainly wanted to learn from others. I worked in two brand stores, and worked as a customer service representative, operator, store manager, etc. I have figured out the difference between brand stores and Taobao stores.

But then Taobao raised the entry threshold for the mall. Around 2011, Taobao increased the annual service fee for Taobao Mall by 5 times, and the deposit was also increased from 10,000 to a maximum of 150,000. With this calculation, the start-up capital of a brand store would be hundreds of thousands, and my money was completely insufficient. At that time, it felt like the sky had fallen. I had worked so hard and planned for so long, but in the end, it was trampled to death.

03｜Mid-size and large-size women's clothing

In 2013, I stayed at home for a few months and then went out to work. At that time, there were not many e-commerce talents. If you had experience in opening a store and knew computers, you would be very popular outside. It was not a problem to get a salary of more than 4,000 yuan in Guangzhou.

At that time, Taobao online celebrity stores were just beginning to emerge, and many female online celebrities rose to prominence during that period. For example, the owner of the store where I worked was originally a packing girl in Shisanhang. She would match some clothes and take some photos, and later opened a store. Unexpectedly, a cape coat suddenly became popular and sold out in an instant, making tens of millions.

I worked in that store for a few months and thought that the online celebrity women's clothing store was an opportunity, so I went out to work on my own. When I left, the boss tried to keep me, saying that I knew computers and operations, and she knew design and matching, and the two of us could work together. But I still wanted to try my luck on my own, so I refused.

I was just testing the waters in the first few years. My wife and I did it together, and we tried various things every day. It seems that this one is very popular recently, so we took a picture and put it on the shelf to give it a try.

The model at that time was my wife. We figured out how to match and select products by ourselves. We also consciously created some IP personas for my wife, made her an Internet celebrity, and took photos in cafes and parks. I don’t know if you have heard of “Taobao girls”. At that time, many models started as Taobao girls.

During the exploration, we gradually found a niche market - plus-size women's clothing. My wife is a little fat, so she would slowly look for loose clothes to match her clothes, such as a loose sweatshirt on the upper body and shorts on the lower body, which would not make her look fat but also make her legs look longer.

The market feedback was pretty good, and loose-fitting clothes often sold better. Maybe at that time, some people saw that the models in the store were slightly fat and the clothes they wore were also loose, so they thought that people over 100 pounds could wear them. My wife often said at that time that buying clothes was difficult, that is, there were L sizes, but if you wanted to find an XL size, there was basically no size.

At that time, there were very few people who specialized in selling plus-size women's clothing in the market, and the plus-size women's clothing market was completely blank. I simply changed my shop into a plus-size women's clothing store, called "Zhang Wenwu Plus-size Women's Clothing Store", and specialized in plus-size clothing. There were almost no people who specialized in plus-size women's clothing in the wholesale market, so we searched everywhere and sold the plus-size women's clothing we found.

Zhang Wenwu Large Size Women's Clothing Store

On Double 11 in 2016, I signed up for Taobao’s event with a large-size women’s clothing. I was accepted, and Taobao gave us some traffic support. If you click on women’s clothing from the Double 11 main page, there is a subdivided page for large-size women’s clothing in the women’s clothing venue. When you click on it, you will see all large-size women’s clothing stores, and you can see our model. At that time, there were probably not many stores selling large-size products, so a small store like us was selected.

At that time, there was only one day of Double 11, and I remember that we sold less than 100,000 yuan in one day. We were so happy at that time that we packed and sent out all the products for several days. When Double 12 came, we found another model to sign up for the event, and we also sold tens of thousands of yuan, which also boosted the sales of other models in the store. When I went home for the Chinese New Year, I finally saved tens of thousands of yuan. Although it was not much, you knew that your store would continue to grow, and as long as you follow this model, you will succeed.

04｜The era of internet celebrity stores

At that time, online celebrity women's clothing stores such as Zhang Dayi and Xue Li had already emerged. It was also on Double Eleven in 2016 that Zhang Dayi's women's clothing store achieved sales of over 100 million yuan for the first time. This was the first women's clothing store on Taobao to achieve sales of over 100 million yuan, and its daily ranking once surpassed Uniqlo.

We also followed these Internet celebrity stores and gradually began to formalize. That year we rented an office. At first, it was just an office of more than 60 square meters in Tianjian Home Decoration City in Baiyun, Guangzhou. One square meter cost 50 or 60 yuan. That was the first time I rented an office since I started e-commerce in 2009. I used to do it in a rented house. I was really surprised and happy. It seemed that after so many years of hard work, you finally reached a point of upward movement.

It was really crazy back then. At first we just shot sample photos in parks and coffee shops in Guangzhou, but later those big influencers went abroad to shoot photos, so we followed them. We should be one of the first Taobao women's clothing stores to follow the big influencers to travel abroad for photos.

Don’t think that it doesn’t matter where the picture is taken. At that time, there was a popular saying in the industry that what is sold online is a picture. It’s a simple truth. If you just hang the clothes up and take a picture, people will think that the clothes may be worth 20 yuan; if you let a professional model take a picture in a studio, it’s 50 yuan; if an internet celebrity wears it and takes a picture, it’s 70 yuan; if you take a picture abroad, it’s 99 yuan!

At that time, we would go abroad for a photo shoot every time we released a new product. This time we went to Hong Kong, and the next stop was Malaysia and Bali. This issue might sell for 100,000, the next issue would sell for 200,000, and the next issue would sell for 300,000. You basically had no time to promote, you just knew that the orders kept increasing and the money came in.

The office space we rented became larger and larger, from the original one room to two, and from two to five. In the end, it only took one year for the office space to expand from more than 60 square meters to several hundred square meters. It was really glorious.

By 2018, we had made over 20 million in sales from spring and summer products alone. After the shipment volume increased, we also started to cooperate with factories and began to make patterns and designs ourselves, instead of just taking the stalls in the wholesale market. My principle at that time was to choose the right style and take good pictures. I didn’t seem to have any promotional or operational skills.

You must work hard to choose good products. For example, if floral or polka dot skirts are popular in the market recently, you can make a short version or a pair of pants. To put it nicely, it is development, but in fact it is a modification. At that time, most women's clothing stores on the market played in this way, and those big Internet celebrities also copied the designs of big brands such as Dior and LV. Everyone copied the styles.

Sometimes we also buy some patterns and give them to OEM factories for production. China's clothing industry is very developed, and you don't have to spend too much time on fabrics or workmanship. As long as the price is right, the supplier can help you solve most of the problems.

Those years can be regarded as the real explosion period of the women's clothing market. I remember that the first Internet celebrity e-commerce listed company, Ruhan, was listed in 2019. At that time, Taobao was also in a state of flourishing, including Internet celebrity stores, designer original stores, buyer stores, and everything else.

Thinking back now, it feels like everyone was able to show their talents and do very well. Not only did the online celebrity stores become popular, they also led to the popularity of the entire women's clothing market. I remember that at that time, as soon as Sydney had just revealed the new models, the pictures were still blurry, and imitations immediately appeared in the wholesale market.

When Zheng Enyi got married, he also posted the good news on his Taobao store

05｜The market is no longer

At the end of 2019, we planned to move our company and warehouse from Guangzhou to Humen, Dongguan, where the rent is cheaper and it is closer to the OEM factory and fabric factory. We had everything ready before the New Year, but we didn’t expect that the house would be sealed off after the Chinese New Year, and hundreds of thousands of goods were left in our hands.

At that time, I thought it was no problem. I had money anyway, and hundreds of thousands of dollars worth of goods were nothing. I could just sell them slowly. But I underestimated the impact of the epidemic and platform competition.

After 2019, our plus-size women's clothing business encountered more and more low-price competition, and the scale continued to shrink. When we first started selling plus-size women's clothing, there were only a few stores in the entire wholesale market. Now there is a whole building selling plus-size women's clothing. There are also bigger players coming in, they have their own factories, more funds and stronger strength.

In 2021, as we watched the competition in plus-size women's clothing worsen, I decided to give up plus-size women's clothing and focus on petite women's clothing, that is, clothing for women around 150cm tall. There are very few clothes designed specifically for petite girls on the market, and I fantasized that I could replicate the growth of plus-size women's clothing in previous years, and petite women's clothing would definitely explode.

But it obviously failed. When I first started to make plus-size women's clothing, the capital, design and quality were not as good as they are now, and some of the goods were stalls from the wholesale market. Now I have cooperated with factories, have professional designers, and make my own patterns. The scale of investment is larger, and the design and quality of the clothing are better, but it still hasn't succeeded.

The most critical reason is that the market has changed. For example, when we started with plus-size women's clothing, we had almost no promotion costs. Now traffic has become more and more expensive, and it is normal to spend 20,000 to 30,000 yuan a month on promotion. It is difficult for small and medium-sized businesses like us to survive.

Many people now say that the epidemic has brought down everything, but the epidemic cannot be blamed entirely. In 2019, Pinduoduo had not yet really risen, and Douyin e-commerce had not yet started. Taobao was still the only one in the world, not to mention the women's clothing market.

Now there are four or five big platforms fighting each other, including Pinduoduo, Douyin, Xiaohongshu, and JD.com. Everyone is competing fiercely. If you offer refund-only policy, I will follow suit and offer refund-only policy. If you offer free shipping for returns, I will also provide it. These measures may be good for buyers, but the entire business environment will gradually change.

Big sales have become more and more normalized. In the past, e-commerce promotions would only take place on Double 11. You would have to set an alarm and add items to your shopping cart half a month in advance to grab the goods. Now, to put it bluntly, e-commerce platforms are promoting sales every day, with 30 yuan off for purchases over 300 yuan or 20 yuan off for purchases over 200 yuan. Double 12 was not just two days ago, but it is now the Double 12 gift season. In any case, merchants are required to lower prices and hold promotions every day.

Taobao's Double 11 Gift Season Event

What is more obvious is the increase in the return rate. Before 2019, our return rate had never reached 30%. At that time, returns were already very convenient, there was also freight insurance, and door-to-door pickup was also possible. But after 2019, especially after Pinduoduo and Douyin emerged, the services they launched were better and more consumer-oriented, and Taobao gradually began to change.

Our return rate has been increasing over the past few years, up 5 percentage points every six months, from less than 30% to more than 70% in the first half of this year. Some orders even come from buyers who have worn their clothes for almost two months and washed them several times. When they apply for returns, the official after-sales service will still support them. There are also some Xiaohongshu bloggers who often buy more than ten or twenty pieces at the beginning and return them after trying them on.

Some people may say that the current price war has led to a decline in the quality of merchants' goods, which has increased the return rate. I don't agree with this statement. In fact, price wars have always existed in the clothing industry. When we first got goods from the stalls, everyone also competed with each other on price, and the stalls would cut corners and replace them with worse fabrics. This has always existed, and the quality will be proportional to the price. The main reason for the high return rate at present is that the platform blindly pleases buyers and ignores sellers. To give the simplest example, although I am also a merchant, when I buy clothes as a buyer, I have also completely developed the habit of frequent returns, and the return rate may be more than 50%. If I like it, I will buy a few more pieces. Anyway, it is not suitable. Apply for door-to-door pickup. It doesn't cost a penny, and the courier will come to pick up the items.

06｜Stop loss in time

Taobao's shop assistants didn't contact us, and didn't say a word. This may be a very normal thing for them. There are so many women's clothing stores closing down now, and we are not the first one. Zhang Dayi, Fan Zhiqiao and others have closed their stores. Besides, they are also being beaten badly by Pinduoduo, so how can they care about us merchants?

I officially decided to close the store and dissolve the company after the 618 shopping festival this year. In fact, the company's employees had already made up their minds. Our return rate has continued to increase over the past six months compared to last year, and the business has not improved. The dissolution should also be within their expectations.

Starting from July, I gathered some friends and slowly moved the inventory from the company and warehouse back to my hometown. Then I counted the goods, put them on the shelves, and it was not completed until the end of August.

No matter how difficult it was to do e-commerce in the past, it didn’t seem as difficult as when we finally announced our dissolution. In fact, in the first half of this year, our small-size women’s clothing store has basically broken even. From the early investment to now, it is almost entering the payback period. Maybe if we continue to do it, we will gradually get better.

But it is really tiring. Now all platforms are competing with each other for low prices, and the environment may get worse in the future. We check the return rate of our store every month, and it is rising every month, from 68%, 72% to 75%, and the average is 73%, which is already a record high.

We have also tried various self-help measures, such as opening stores on Xiaohongshu and Douyin. But it didn’t help. For example, if I do a live broadcast on Douyin, it may be very popular that night after the traffic is invested, and I may sell one or two thousand pieces, but after two days, there will be no traffic and no orders immediately. People who come to the live broadcast room are more impulsive consumers, and the return rate is even higher.

When the store closure notice was issued at the end of September, I suddenly felt relieved and liberated, and finally said goodbye to e-commerce women's clothing. The strange thing is that after the store closure notice was issued, many people came to buy the clearance items, and the store sales suddenly increased a lot. I sold thousands of pieces in those two days.

After working in e-commerce for so many years, if there is any experience or lesson I have learned, it is that opportunities always come to those who are prepared, but we must also learn to stop losses in time.

In the past, we were able to catch the opportunity and the explosion of plus-size women's clothing because of some previous experience in e-commerce. We tried the waters when many people didn’t know how to do e-commerce, so we were able to seize the opportunity when the wave came.

But we must also learn to stop losses in time when the market gets worse. Sometimes I envy those who decisively closed their stores at the beginning of this year. At least they will not further expand their losses. As many people say, if I had stopped in the past few years, maybe I would have kept everything now, and the money would still be in my hands, and I wouldn't have to toss and turn. It is actually good to keep doing nothing in the past few years.

In the past six months, I returned to my hometown and started a short video account about local life with my wife. It has just started and only has a few hundred fans. Of course, I haven't made any money yet, but I can occasionally get a meal.

In the past, we often cooperated with bloggers from Xiaohongshu. Now I think their model is relatively stable, with light assets, no need to stock up on goods, and no excessive investment.

Author｜Xue Xingxing Editor｜Jiang Jiao