Q: Please tell us about your motivation for starting your business.
Zheng: China's AI industry has seen substantial trends since 2015. I was working internally at Google as an employee at the time, so I had a clear understanding of Google's plans to open source the Tensor Flow framework. As one of the original users, I had a lot of expectations for Tensor Flow. So, in 2015, I co-founded Caicloud with a few colleagues who worked at Google.
In the process of starting a business, I found that China has not yet reached the technical level of improving the AI infrastructure, and many people and companies are focusing on solutions.
Therefore, Caiyun Technology began to provide professional solutions for finance, energy, medical and other related fields. Along the way, I met a client, Ruhan, who was the first influencer business company to be listed on the NASDAQ in the United States and had a high influence on the Chinese network.
This company was originally in the apparel business, but at that time, we were approached by the need to grasp the market in view of the rapid changes in the market.From the collection, collation, analysis and conclusion of data, in the process of cooperation with Ruhan, we found that from 2016 to 2017, the entire apparel industry has changed from the popularity of traditional well-known brands to "influencers with influence on consumers - KOLs (key opinion leaders) and consumers KOC (key opinion consumers) who have a say on SNS although they are laymen", and the times have changed significantly.
That's how we saw an opportunity to transform the apparel industry.
At the same time, I also found that there is no such thing as a monopoly in the apparel industry, and even a company like Uniqlo has a very small market share in the world.
thereforeWe judge that there are platform-based business opportunities in the apparel industry, which are worth digging into。 So in 2018, he founded Zhiyi Technology.
Q: Please introduce the products and solutions of Zhiyi Technology in detail.
Zheng:The problem we want to solve is how the apparel industry chooses goods according to market conditions.
5~10 years ago, all clothing brands were dominated by fashion trends and fashion trends of large overseas famous brands, and they chose products in the next market in this direction. However, with the advent of the mobile Internet era, people's requirements for personal consumption, especially fashion, are getting higher and higher. As a result, the needs of people in different regions, different cultures, and even different scenes have become diverse.
Recently, whether it is a large famous brand or a fast fashion brand abroad, in order to meet the needs of each consumer, the number of single items offered is increasing.
On the other hand, the increase in the number of expansion projects has also brought bigger and more important problems for brands. That isHow to correctly grasp the needs of consumers and the fashion preferences of target consumers。
Therefore, our services offer two capabilities to our customers. One isYesThe digital power of brands to bring the best decisions。 Our products collect fashion-related data from all over China and even around the world. To put it simply, it's like the clothing version of the search engine Google. We collect data on billions of garments from e-commerce, social media, and thousands of fashion websites, and through intelligent analysis of these apparel items, based on various attributes and profiles, we will make a decisionIt can predict the fashion trends and styles that brands should pay more attention to。
The other isIntelligent production capacity, grasp consumer trends through analysis, and design specific styles。 For example, the underlying trend of red dresses may be popular, so what kind of red dress it is must be thought about and created by the brand itself.
Our service is equivalent to having a brand team from design to production. In the future, we will build a franchise team to design specific apparel items based on the trends we analyze, while providing a supply chain that can quickly respond to changes in demand, thus working with designers.
Based on the above capabilities, we offer two types of services.One is software, through which brand designers can understand the market and develop clothing projects。 The software also includes certain management functions, including management from acquisition and measurement to design and production, as well as collaboration functions between designers. Design materials, trends, and the management of the entire process make up our software system.
The second is the design of the supply chain, where customers can select clothing items through our software, and place orders directly after they are determined。 Through the supply chain, if you place a first order in China, the delivery time is 7 to 10 days in spring and summer, and 15 to 25 days in autumn and winter. If you place a repeat order after the first order, the time will be shortened by 3~5 days from the first order.
Q: As a pioneer of China's clothing SaaS, Zhiyi Technology has made great progress so far. How has this growth been achieved?
Zheng: There are three types of backgrounds that grow up. The first is the product, the second is the technology, and the third is the marketing.
First of allIn terms of products, we have become a pioneer in the analysis of digital trends in China in a sense。 Before the birth of Zhiyi Technology's products, there were no similar mature tools on the market. For example, "SHEIN", an emerging fashion online shopping mall from China, has built its own data system within the company, but it has not been put on the market as an industry-standard tool. So, until we launched our own products, the market was basically blank. In other words, while everyone in the industry has the same troubles and problems, there is no mature product that can meet these problems.
The reason why there is no mature product is because of the second technical barrier. Those involved in the apparel industry are unable to break through technical barriers such as clothing recognition based on artificial intelligence models, and it is difficult to provide unified services to the market. In addition, people outside the apparel industry, especially those involved in technology such as IT engineers, often lack understanding of the apparel industry. As a result, even in the initial stages of development, there were enormous difficulties and resistance. However, Zhiyi Technology is based on the real needs of Ruhan for product development, and in the process, we have a deeper understanding of the apparel industry.
Finally, the third context for growth – marketing.China's garment industry is geographically concentrated, with the main cities being Hangzhou in Zhejiang Province, Guangzhou, Shenzhen and Shanghai in Guangdong Province, and these cities alone account for more than 60% of the country's sales share.We referenced Alibaba Group, China's largest e-commerce company, and other traditional software companies, absorbing their talent and quickly gaining customers.
Q: Please introduce the representative cases of cooperation between Zhiyi Technology and Japanese companies.
Zheng:So far, we have provided services to 5~6 Japanese companies. Half of them are companies in the apparel industry, and the other half are companies covering all categories。 Among them, the most in-depth cooperation is the brand "niko and...", which is owned by clothing giant Adastria. The brand uses both our software products and supply chain products, and the collaboration is going well.
In terms of software products, it is mainly through data to help them better understand the Chinese market. As a Japanese company, it is essential to understand the Chinese consumer market. Therefore, based on our trend data analysis, we can make better decisions from the selection of commodity items to the operation and then to the market based on understanding the changes in the Chinese market. In addition, based on our analysis of market data, we are able to grasp trends more accurately. And, in terms of supply chain products, it is related to improving the flexibility and adaptability of the supply chain.
In addition, in late February 2023, we confirmed a collaboration with MUJI for all categories, which is currently underway in China.
Q: What do you think about the current overseas development strategy? If you go overseas in Japan, what form of cooperation will you seek with Japanese companies?
Zheng: Our overseas development plan can be divided into two steps.The first step is to provide more services to local brands that conduct cross-border transactions in China。 Because they are just as targeted as we are to overseas markets, and their culture and language are close to our products, if we can better serve them, we can prove that our product attributes and the scenarios we are targeting are also applicable to brands entering overseas.
presentlyZhiyi Technology serves about 300 local Chinese brands that are serving overseas customers。 At this point, it can be said that we have achieved a small success.
The second step is to provide localization services not only for overseas brands in China, but also for overseas bases。 In fact, in addition to the Japanese companies we just introduced, we also provide services to companies in Brazil, Russia, and South Korea. Among them, the most in-depth cooperation is a Brazilian clothing brand, which ranks among the top three locally. Based on our own data collection and analysis capabilities, we customized and developed their in-house BI system to provide BI (Business Intelligence) analysis tools for the Brazilian market.
Finally, Japan's overseas markets are still in the early stages of experimentation. First of all, based on familiarity with the local Chinese market, we plan to engage with overseas companies, including Japanese companies, that already have a foothold in China. Regarding product development in Japan, we are actively considering collaborating with local Sler (system integrators), R&D (research and development) companies, and sales companies including distributors.
Q: How do you see the Japanese market?
Zheng: Personally, I think the Japanese market is very similar to the Chinese market, and the way of wearing and style of Chinese and Japanese clothing is relatively similar. Therefore, I think there are few barriers to entering the Japanese market from China.
In fact, in the garment industry, there are two special countries in the world. One is Japan, the birthplace of Uniqlo, and the other is Spain, the birthplace of zara. In both countries, Uniqlo and Zara are the top players with a greater presence in the market, while in other countries there is a trend towards more decentralization.
But in Japan, even top companies like Uniqlo don't account for a high percentage of the overall market.
We hope that by entering the Japanese market, we can bring some changes to the Japanese apparel industry, make full use of the experience of developing in the Chinese apparel market, and develop the business model developed in China in Japan, hoping to bring a better consumption experience to Japanese consumers.
Q: Finally, please introduce the future milestones and visions of Zhiyi Technology.
Zheng:The milestones for 2023 go in two broad directions. The first is to expand the category, and the second is to expand the region。
