Sports Brand Market Converse And Move

As of April 2011, the six major sporting goods listed companies in China Lining, Anta, China trend, PEAK, XTEP, 361 degree The 2010 earnings report has been released. From the earnings data, the sporting goods market presents a typical polarization: Lining, a big brother, and a high-end brand. Kappa In China, its profitability has gone back to varying degrees. Anta, PEAK, XTEP and 361 degrees But the result is gratifying, and net profit has increased by at least 24%.

　　
I want to say that rising prices are not easy.

　　
In May 1st, on the second day of the long holiday, Ji'nan's Quancheng Road Pedestrian Street is a sea of people. What is most conspicuous is the sporting goods shop on both sides and colorful promotional posters in the window.

　　
"How many sports shops are there in Ji'nan? I don't know clearly. There must be hundreds of less. I have done more than one. Sports brand Mr. Li, the agent, told reporters that some brand lights have seventy or eighty stores in the urban area of Ji'nan.

　　
Although all kinds of sporting goods shops are in full swing, Mr. Li has a clear feeling that investment in sporting goods stores is becoming more and more difficult compared with previous years. With the increasing number of sporting goods shops, profits are getting lower and lower: rent increases by at least 10% per year, and workers' wages increase by at least 10% annually, while the life cycle of products is shrinking and gross margins are falling.

　　
"The period before the new product sale is probably four or five months, and now it will last for about a month, and then we will have to start selling the discount." Mr. Li sighed with emotion: even Nike and Adi, who had been strong in price in the past, have to do special deals and promotions nowadays.

　　
"Investment difficulties, so the sports brands can only rely on more direct outlets to open up the market. However, the share of Direct stores is too large. It is also very dangerous. Once the overstock of terminal inventory is too large, it will be a disaster for enterprises. " He said.

　　
In order to solve this contradiction, some sports brands began to look forward to developing more high-end products, so as to increase profit margins. At the forefront of the industry is Lining, the big brother. 2010, beyond Adidas After becoming the runner up of Chinese sports brand sales, Lining Announced the strategic adjustment, while the brand new logo was launched, the price of the product was raised across the board. In May 1st, the reporter noticed in the Lining store of Quancheng Road, a pair of new shoes running on the net and rubber bottom, the price of the new products was about 600 yuan, while the running shoes of the same material, the price of the Adidas store was 780 yuan, a short cotton T-shirt with a full cotton texture, Lining sold 200 yuan, and the price of Nike was between 200-300 yuan. The price of Adidas was about $200-300.

　　
However, Lining's behavior of raising prices has apparently not been approved by the market in April this year. Li Ning Co In its 2010 earnings report, its revenue and gross profit increased by only 13% and 12%, far below the composite annual growth of more than 30% over the past ten years. At the same time, in the third quarter of 2011 Li Ning Co products orders meeting, Lining also suffered a sharp decline in orders. According to the retail brand price, the order amount decreased by more than 8% per year, the wholesale price dropped by about 14%, and the order volume of shoes and service products dropped by about 17%, with the average retail price rising by about 10%.

　　
    Polarization of annual report

　　
In the annual report released by the six major sporting goods listed companies, Lining had a similar experience. Kappa brand Business trends in China. According to the annual report, China's sales volume reached 4 billion 261 million yuan in the 2010 reporting period, up 7.3% from the same period last year, and realized a net profit of 1 billion 464 million yuan, an increase of only 0.3% over the same period last year.

　　
Moreover, the order volume of China's first quarter and the second quarter of 2011 is much lower than that of domestic industry and market expectations, up by 11.8% and 2.8% respectively over the same period, and it is expected that in the third quarter, there will be double digit (15% or so) decrease.

　　
"The mainland sporting goods market will upgrade its consumption, and the market demand will shift from the middle to the low end, so the growth will slow down in the current transition period." This is the explanation given by Lining and China for this not very good transcript. according to Li Ning Co CEO Zhang Zhiyong predicted that the average growth rate of the sporting goods industry should be maintained at 13%-14% this year. It is worth noting that before 2009, this figure was 35%.

　　
However, why does the trend of slowing industry growth not affect? Anta, PEAK, XTEP, 361 degrees And other sports brands? Anta's 2010 results showed that sales increased 26.1% to 7 billion 408 million yuan last year, and net profit increased 24% to 1 billion 551 million yuan over the same period last year. Net profit was more than RMB 400 million yuan of "one brother" Lining. PEAK's 2010 annual report also showed that sales and net profit reached 4 billion 249 million and 822 million respectively, up 37.3% and 30.9% respectively over the same period.

　　
"The sporting goods industry's prospects for development in the coming years are generally optimistic, and expect the industry and group to achieve satisfactory growth in 2011." PEAK said in its annual report.

　　
The growth rate is slowing down and the outlook is optimistic. Why do different brands make such a huge difference for the same sports industry? What can be explained by the polarization of annual reports?

　　
"The fundamental reason is that they are not at the same stage of development, and the levels of their core markets are different. Signs have shown that after the outbreak of the 2008 Beijing Olympic Games, the overall growth rate of China's sporting goods market is slowing down, and the tide will slowly spread from the first tier cities to the low level cities: in the first tier cities such as Lining and kappa, because competition has been saturated, the performance is the fastest and the most prominent; and the three or four line cities in Anta and other brands are not obvious, and not only that, but they are expected to continue to maintain strong growth in the next two years. Wu, who has many years of research in the sporting goods market, told reporters.

　　
"Opening stores in the three or four line market is the general trend of the development of future sports brands. On the one hand, compared with the already saturated market in the city, the coverage rate of the outlets is not high. It is good for a brand to have two stores in a county at the same time. On the other hand, with the acceleration of urbanization and the improvement of people's living standards, more and more consumers will change their old consumption habits and become our customers. Mr. Li also thinks.

　　
  Brand upgrading is urgent.

　　
Although at present Anta, XTEP Second tier brands in the small and medium-sized cities have been "moist", and competition is also pressing: to promote China's growth, as early as last November, Adidas has made it clear that in the next 3 years, it will open 2500 new stores in China, covering 1400 cities in China, and mainly in three or four line cities. Moreover, these new outlets scattered in smaller cities will also choose to sell products at lower prices, which will be 15% cheaper compared with the products of big cities.

　　
In fact, ADI The sub brand "NEO" launched in 2007 has been very close to the price: a NEO T-shirt costs about 98 yuan, and the coat only needs 200 yuan, which is about half of the price of the sports performance series, and the difference between the domestic brand and the sports brand is less than 100 yuan. This price is undoubtedly attractive to consumers.

　　
Do you choose Lining at the same price? ADI, Nike " In May 1st, reporters randomly consulted the digital consumers on Quancheng Road, and almost all the answers came from the latter. The reason is: "domestic brands, no matter in brand awareness or style design, have no Fabio with foreign brands."

　　
"From this perspective, Lining is actually suffering from development bottlenecks before Anta. Despite its efforts to match prices with Nike, Adidas and other international first-line brands, it is still a domestic first tier and international second tier brand in the eyes of consumers. Once the price advantage is lost, or when people's purchasing power reaches a certain level, they will naturally turn to Nike, ADI and other brands. Mr Wu believes that brand upgrading is the inevitable fate of all domestic sports brands, and what they urgently need to change is the concept of "not enough fashion" and "cheap price" that consumers have long planted.

　　
The new competition also comes from the outside world: many brands of non sporting goods, including H&M, Zara and UNIQLO, are now trying to get a share from sportswear. Since last year, these brands have opened several stores in Ji'nan, Qingdao and other places.

　　
"Fortunately, despite the great pressure, compared with Guangdong, Shenzhen and other regions, the economically developed and populous Shandong cities still have huge market potential in developing sports brands. First of all, the market capacity is very large, ranking only second after Guangdong. Secondly, Shandong people like to save and have a relatively conservative consumption concept. But with the growth of the post-80s and 90s as the main consumers, the consumption concept of the mainstream of the society is changing, all of which provide the growth space for the sports brand. Mr. Li thinks.