Sports Brand Beachhead Outdoor Revealing Secret Achilles Heel

In the traditional sports enterprise collective winter today, the outdoor sports industry is welcoming the spring, this is a market that has not been reclaimed, the traditional sports industry's power structure and rules of the game are completely subverted, all forces are currently preparing for the battle, the good play has just been staged.

After nearly 10 years of rapid growth, the traditional sports industry suddenly encountered a cold winter in 2011.

The Anta financial bulletin, which has just taken the first place in the local brand, shows that the growth rate of same store sales in the first quarter has slowed to the number of units in the two quarter, while the growth rate of orders in the second quarter of 2012 is only "low unit number growth". In the second quarter of 2012, the order size of the Lining who is deeply trapped in pformation is only "flat". In the other two years, PEAK, the star enterprise in the past two years, has increased 9.5% orders in the second quarter compared with the same season in 2011. This is the lowest increase in PEAK's orders since 2009.

Just as the local traditional sports brand collectively falls into a downturn, the outdoor sports market is another scene.

According to the statistics of outdoor products branch of China Textile Business Association, the total retail sales of outdoor products in China reached 7 billion 130 million yuan in 2010, an increase of about 47% over 2009.

From 2000 to 2010, the annual growth rate of the total retail sales of China's outdoor products market reached over 47%.

An insider, who declined to be named, told reporters that the statistics were too conservative. At present, the actual outdoor market has been at least over ten billion.

Mainland's largest outdoor brand Pathfinder last year's revenue reached 434 million yuan, an increase of 47.86% over the same period, with a profit of 64 million, an increase of 24.12% over the same period last year.

In the first three quarters of this year, the revenue of Pathfinder reached 430 million yuan, an increase of 68.77% over the same period last year, and the profit increased by 76.55%, reaching 53 million 800 thousand yuan.

According to industry sources, the annual growth rate of TheNorthFace and Columbia in the domestic market is over 70%.

Just as sports brands collectively spend the winter, outdoor brands are greeted by warm spring.

The Contender

Although the outdoor sports industry has maintained a high growth rate of 40% over the long term, due to the relatively small scale of the industry and the annual growth of the mainstream traditional sports industry over the past five years, the minority outdoor sports industry has not received enough attention. Many people still do not notice this "gold mine" if the local traditional sports brands are suffering from growing pains this year.

At present, capital and talent are pouring into this booming market.

This year, three important mergers and acquisitions have occurred in the outdoor sports industry. First of all, in June, the VF group, which owns TheNorthFace, spent 2 billion 300 million US dollars to acquire the famous mountaineering brand Timberland. Then in July, Private Equity Investment Firm Blackstone Group acquired the largest outdoor brand wolf claw (JackWolfskin) in Germany at the price of 700 million euro yuan. In November, Adidas bought the professional rock climbing brand FiveTen at the price of 25 million dollars, showing its ambition in the outdoor field.

In the capital market, the outdoor concept stock has also been sought after. Since January 2009, the stock price of VF group has not increased to US $60 to today's US $120.

Since the announcement of Timberland in June this year, the company's share price has risen by more than 20 US dollars.

The share price of Columbia, another leader company, has also increased by nearly 50% over the past two years.

The bright market prospect has also attracted a large number of talents in traditional sports industry to enter this field.

A person who has just left the Li Ning Co has told reporters that Lining, who is currently in the position of an internationally renowned outdoor brand, is now facing a huge concussion. Many employees choose outdoor brand instead of traditional sports brand as a new starting point for their career.

However, despite 10 years of rapid growth, the development level of the whole industry is still very low, and it is not too much to describe it as a wasteland that needs to be reclaimed.

The number of TheNorthFace and Columbia sales in China is about 1 billion yuan, and the number third Pathfinder is expected to achieve 700 million yuan this year, and 4 to 10 are almost four hundred million or five hundred million at the same time, and the gap between them is very small.

Generally speaking, the outdoor market is far from the traditional industry structure, so the industry's first camp and the two or three camps have not really opened up. The whole market is still a blue ocean, full of variables.

"Now everyone thinks of how to be himself, not how to beat others."

Xiao Ke, director of a well-known outdoor brand product, told reporters that "each brand has 10 steps against each other. There is no need to jump over to provoke others."

Different ways of playing

This is a new field. The pattern of forces and rules of the game in the traditional sports industry have been completely overturned. Even the leading enterprises in traditional industries such as Nike and Adidas have not accounted for much in the outdoor area.

The jackets of the original birds can be sold for 20 thousand yuan, but they still sell well. Adidas has a $1200 assault suit, but no one buys it.

Xiao Ke said, at present, the domestic outdoor market, especially the high-end consumer group, does not care about the price at all. "The higher the price, the better the sale."

Adidas has been making efforts in outdoor areas this year. In addition to its acquisition of FiveTen, it has also vigorously promoted the outdoor TERREX series of its brand. In early September, Adidas's first outdoor product franchise store in Harbin was located in China.

But in Xiao Ke's view, Adidas's path is not right at present.

"Adidas is good at providing products with high cost performance, but in the current outdoor market, this direction is wrong. What consumers are concerned now is that products should be cool enough and professional enough."

Xiao Ke said.

Just copying the experience of traditional sports industry can not play in outdoor areas.

The popularity of high-end outdoor sports products, which are expensive, is actually the inevitable result of further segmentation of the traditional sports industry.

For the high-end consumer groups in China, the high-end brand Nike and Adidas in the traditional sports industry are far from meeting their consumption needs.

On the price of products, the price of Nike's most expensive footwear LeBron9 basketball shoes is only 1599 yuan, while the average price of professional grade outdoor shoes is around 1500 yuan, and the price of high-end products can easily exceed 2000.

German hiking brand Lowa's MOUNTAINEXPERT hiking shoes cost up to 3480 yuan. Even with such a high price, this product is still very popular in the market.

For many consumers of outdoor products in China, it is urgent to use outdoor sports products to separate themselves from the mass consumer groups to prove their identity, and high-end outdoor sports products are becoming new luxuries.

An industry insider told reporters that many people buy outdoor products for the purpose of not having professional sports needs, just to show off their wealth.

At present, only two to 30% of the consumers who buy professional outdoor products aim at outdoor sports.

For the vast majority of consumers, the outdoor products have far more functional characteristics than their actual needs. This also makes the outdoor sports industry do not need to launch a large number of new products every year, just like traditional industries.

"It is no problem to sell a mature product for several years."

Xiao Ke introduced, this also leads to a strange phenomenon in the outdoor industry: some brands star products have the effect of preserving value, some dealers even hoarded, save for a year, so that they can sell a good price in second years.

Professional outdoor products are expensive. Consumers may pay for outdoor products in the short term because they follow suit. In fact, this is not a very rational consumption mode. It is not realistic to expect irrational consumption to last for a long time.

So the future outdoor industry will be further subdivided, and this subdivision will mainly face two aspects.

First of all, in order to meet the needs of different groups of people, brands will lock target audiences on specific consumer groups.

At present, such a trend has already emerged. Previously, the high-end Columbia has begun to lay down its role in the past two years and substantially reduce the price of its products. On its official website, most of its products are sold at half price, with the average price of Nike and Adidas unchanged. Local Pathfinder will position itself as "outdoor", attacking the second tier market and avoiding direct competition with international brands.

Another development direction is the subdivision of outdoor sports. "Outdoor" is actually a very broad concept. Skiing, mountaineering, rock climbing and extreme sports belong to outdoor areas.

In the European and American markets with mature outdoor sports, the division of outdoor brands has also been very meticulous. Individual sports such as mountaineering, rock climbing, skiing, and even tents, sleeping bags, walking sticks, glasses and other accessories have very professional brands.

In the future, with the continuous maturity of the domestic outdoor market, there will be more professional international brands in the field of subdivision to China.

But at present, the whole industry is still in the stage of very extensive development, which has left a great opportunity for domestic enterprises. If we can advance the layout in the market, we can seize the opportunity when foreign brands are in great pressure.

Another characteristic of outdoor sports industry compared with traditional sports industry is that the professionalism of outdoor sports determines that there will not be a brand that can be eaten from low to high end like Nike.

The leading enterprises in the industry almost invariably adopt a multi brand development strategy. VF has many outdoor and leisure brands such as TheNorthFace and Timberland.

Columbia group has Columbia, MountainHardwear, Sorel and other brands.

The reason why such a development model is chosen is that outdoor sports is still a niche industry, and there are quite professional divisions in the mature market. Single brands are hard to support a company's development.

Multi brand group operations can help enterprises increase bargaining chips when negotiating with department stores.

In China, such a trend has also begun to appear. The Pathfinder said in the latest announcement: "we believe that the new brand can catch online shopping and three or four line consumers, and expand the audience without damaging the high-end image of the Pathfinder brand, which is conducive to the growth of the sales revenue of the company."

Its multi brand strategy has surfaced.

"As the whole market is still in its infancy, every brand is still in the stage of crossing the river by feeling the stones. Everyone is trying some possible directions, but the future direction will not be clear."

Xiao Ke said.

Achilles' Heel

Behind barbaric growth, there must be many problems. This is the rule of all industries. Today's outdoor sports market is the same.

The biggest obstacle to the development of the industry is the shortage of qualified personnel.

Xiao Ke, a traditional sports industry, has a deep understanding of this.

"People in Sales and Marketing can be recruited as long as they are willing to spend money. What is most lacking now is people who make products."

Outdoor products have their own characteristics. Taking outdoor shoes as an example, their technology and functionality are far from traditional sports shoes.

There are huge differences between outdoor shoes in the production process, design, research and development of shoe soles, last shape and side stitches.

In addition, because the market is still in the breeding stage, the demand point of consumers is also very difficult to grasp, so even with the experience of traditional sports industry, it is not enough to deal with outdoor areas.

Because of the lack of talents, many domestic companies can not produce decent products even if they have money.

"I have more than 20 trainees now, and it will take me 2 years to mature. It would be pretty good if I could save half of that time."

Xiao Ke said, "but this is only a solution to our company's own problems."

From the perspective of the whole industry, the awkward situation of shortage of talent will continue for a long time.

The shortage of product talent is becoming the Achilles heel of the outdoor industry.

For foreign professional outdoor brands, because usually the scale of a single brand is not large, most of them are authorized by the domestic agency to operate. The agency is basically buying the goods mode, and buying products from abroad instead of developing itself.

But the disadvantage of this method is that the profit margin of products will be greatly reduced.

"A ship's profit should be at least 30% less."

One industry insider said that it was not that local agents did not want to do localized research and development, but they could not recruit the right product talents.

Under the current immature market environment, the constraints of product talents on brand have not yet fully manifested, because consumers' cognition of products is still quite elementary. With the completion of market popularization, product level competition will become the focus of the future.

In addition to the problems within the industry, outdoor sports enterprises will also face challenges from traditional sports enterprises.

In fact, there has been some sporadic friction between outdoor sports brands and traditional sports brands.

The main manifestation of this friction is the scramble for channels in shopping malls.

In some large department stores, outdoor brands have begun to occupy the sales space of the original traditional sports brands.

The scale of shopping malls is certain. The rise of outdoor brands will inevitably squeeze out some of the traditional sports brands which are not performing well. This is a relationship between them.

Of course, traditional sports brands will not sit idly by and allow outdoor brands to rob their sites.

And in the face of the big cake in the outdoor market, there is no reason to give up.

For the international giants such as Nike and Adidas, there are already outdoors products. However, due to the fact that they have made a lot of money in the traditional sports field, they do not pay much attention to the outdoors. And considering the overall balance of the brand, it is impossible to put too much resources into the outdoor areas, so the outdoor series has been doing very well.

But for the local brands that are facing the cold winter, the outdoor area is no doubt a life-saving straw. Every family is trying to push outdoor products. This winter, outdoor outfits become the main products of various traditional sports brands.

At present, the forces in the outdoor market are still at the stage of preparing for war, improving products, cultivating talents and expanding channels.

According to the estimates of the industry, the deployment of each family will be basically completed in a year or two, and by then, the positive war between the various brands will also start.

Therefore, for today's outdoor industry, the good play has just begun.