Reflection On PEAK And Hongxing Erke Absent Shoes Expo

Quanzhou Commodities Fair April 20th The fourteenth shoe fair in Jinjiang As usual, there were not many people in the 3 storey hall, and it was raining in the evening.

As a grand event for the "Jinjiang Department" sporting goods group at the door, ANTA Sports Products Limited Jinjiang sports products enterprises such as XTEP international, Jordan, Lu You, Xi long, and so on, only PEAK sports and Hongxing Erke are hard to find.

Local people who do not want to be named said that although Quanzhou and Jinjiang are separated by only one river, PEAK sports and Hongxing Erke belong to Quanzhou enterprises. Unlike other enterprises, they are willing to support the Jinjiang municipal government.

Since 2000, it has benefited from the complete local shoe making industry chain in Jinjiang, the rapid expansion of the channel distribution system and the ability to set up production lines to facilitate quick replenishment. Quanzhou has emerged as the "Jinjiang five tigers" of sporting goods enterprises such as Anta, XTEP, PEAK and Hongxing Erke.

However, affected by the global financial crisis and domestic consumption, domestic Sporting goods industry After more than a decade of rapid growth in the early part of this century, it is entering the turning point of steady growth in the industry. Because of over optimistic assessment of the situation and over expansion, Hongxing Erke and PEAK are likely to become the "two tigers" in the Jinjiang department who took the lead in "lagging behind".

When the London Olympic Games is coming, this year's sports marketing year 2012 looks "cold": many sporting goods listed companies have announced that stocks are increasing and orders are falling. Hongxing Erke was suspended by the Singapore exchange for financial problems in 2011. PEAK sports even gave the announcement that the order for the first three quarters of 2012 was expected to decline by 25% compared with the previous year.

　 Industry winter

According to the 2011 earnings report issued by various companies, as of the end of 2011, the "Jinjiang Department" sporting goods company stock had an increase of more than 25%.

As early as mid February, PEAK sports CEO Xu Zhihua told Reuters that the company's performance will be under pressure in the next 1~2 years due to the reduction in store numbers and inventory backlog. It is expected that the order in the first three quarters of 2012 will drop by about 25% compared with the same period last year. PEAK completed sales of 4 billion 647 million yuan in 2011, according to a simple estimate of quarterly average sales in 2011, and PEAK's orders in the first three quarters of 2012 will drop by about 871 million yuan, which is about 18.75% of the company's 2011 sales. Such a huge decline seems to indicate that PEAK terminal retail inventory is likely to be more serious than the company's annual report of 421 million yuan inventory.

Of course, inventory growth is not unique to PEAK. In the year of 31st, the stock increased sharply from 81.8% to 451 million at the end of 2011.

"The professional sports brand industry is indeed facing challenges." Jordan sports marketing Limited by Share Ltd (hereinafter referred to as "Jordan sports") marketing director Huang Tao told reporters.

"The era of sports brands relying on big stores to gain sales growth has ended, and this development mode is not sustainable." Huang Tao said, on the one hand, with the increase of the number of shop opening, the marginal efficiency of single brand sports shops will decrease and the efficiency of single stores will decline. On the other hand, the domestic commercial real estate will also rise in price and the human cost will continue to rise. These two factors will make it impossible for brands to afford more shops.

In Huang Tao's view, it is enough for a single sports brand to own 5000~6000 shops in the whole country. If the brand extension shop including children's clothing is included, the general 6000~7000 store is enough, and at present many sports brands have opened about 8000 stores, which has exceeded the break even point. {page_break}

　 Brand dilemma

Although Huang Tao felt that Jordan's sports operation was influenced by the company's low profile and steadfast corporate culture, he didn't have too much brain fever to expand the shop scale too quickly. But in fact, there are also many controversies about Jordan's sport itself. The first thing to bear is that Nike's Jordan launched a trademark infringement lawsuit and a "public opinion war" against Jordan in the upcoming A shares of IPO.

"I came to Jordan for three years, and I often watch shops. I think the shop is not telling the salesperson that I am the person in charge of the company. Instead of talking to the shop assistants, I just stand there and see who buys and how to evaluate them, and ask them why they buy them after they buy them. Huang Tao said, Jordan sports also through dozens of research found that the impact of the majority of consumers in the two or three tier cities is not the brand and its LOGO, but more is the product experience and product prices, promotions, preferential activities.

"The success of Jinjiang enterprises is no accident. Jordan sports has been developing for more than 10 years, and the US Jordan is not just aware of Jordan sports. At this time, it is likely to sue for compensation. Wang Maoquan, vice mayor of Jinjiang, told reporters.

However, Huang Tao is relatively optimistic about the sinking of Nike and Adidas. He believes that although the domestic sports brands are experiencing a severe winter growth in the whole industry, but before Nike, Adidas and other spannational giants have fully subsiding to the two or three tier cities, the domestic sports goods companies still have a "window period". Brands need to set up consumer preferences for domestic brands in this window period.

Huang's judgment is exactly the same as that of Li Ning Co CEO Zhang Zhiyong. As early as June 2010, it was realized that the growth mode of sales growth promoted by the number of stores was not sustainable. Zhang Zhiyong took the initiative to implement the brand remoulding in Lining. However, due to the "turning too fast", Li Ning Co's sales in 2011 dropped by 5.8% compared with the same period last year. It was almost over second of Anta sports in China.

However, for the "Jinjiang Department" sports brand, which is eager to enhance brand reputation and consumer loyalty, the high quality sports resources that are increasingly rising are soaring and the cost is soaring.

Take the CBA League title as an example. After several years of pioneering efforts, the naming fee of the CBA League has risen from less than 30 million yuan a year to more than 100 million yuan per year.

A senior sports brand who did not want to be named and would like to participate in the CBA League title competition told reporters that because of the high nominal cost, the CBA League in the future may even have two brand names jointly named "China's national conditions".

This also means that, on the one hand, the domestic sports brand will be affected by the development of the industry, the efficiency of the enterprises will decline, and on the other hand, they will have to bear higher expenditure. The profits of the sports brand will further shrink.

"The title of high quality sports resources is a farsighted problem, but we do not have the opportunity at present, so there is no need to bother to make any assumptions." Huang Tao said that after the 2008 Beijing Olympic Games, the Chinese Olympic Committee (COC) partners' bidding had also been considered. "CBA is from a general event to the current high-quality marketing resources. Anta, who has always been famous, must not miss the opportunity. Lining should also have thoughts. At this time, Jordan sports does not approve of the mutual digging of the brands."

　　 How to stand on foothold

It is indeed true, but how to improve the brand is still a difficult problem for Jordan sports.

"Sports brand sales are futures. At least half a year ago, the channel merchants ordered the goods they sell now. Therefore, when the industry is developing rapidly, there will be no problem in speeding up production and increasing production capacity. But once the average growth rate of the industry is reduced from 30% to 15% at a high speed, there is no doubt that enterprises with no return to sports will have a stock like a mountain. Huang Tao said that the sports industry in the next 3~5 years, the industry concentration will be higher and higher, which is the inevitable result of the development of the industry.

Huang Tao is based on the fact that when an industry enters a mature stage, the top three and top five enterprises will occupy more than 60% of the total industry turnover. At present, the annual sales of Chinese sports brands will be about 100 billion yuan. In 2011, Nike China's sales volume is about 12 billion yuan, Adidas China is about 10 billion yuan, and Lining and Anta are about 8 billion 900 million yuan. 4 enterprises have occupied about 40% shares of the industry, and the market share of the top brands in the industry will gradually improve.

Under such circumstances, sports brand operators either enhance their brand level, or focus on market segmentation, or they will be eliminated. However, whether they choose to become integrated brands or professional brands, it is a prerequisite to try their best to make good products.

Based on this, Jordan sports introduced the RTT (real time technology, instant Technology) system. On the one hand, it helps designers to see the 3D modeling products in real time, the WYSIWYG, which is like the automobile design laboratory. On the other hand, we use related systems to study the revolution of shop display, and add touch screen technology outside Jordan shop to attract more customers into the store.

Huang Tao said, "Jordan first promised himself not to be eliminated, and then slowly looked for opportunities. You have to believe that we always have a foothold. "