I. The performance of major sports brands in China continued to grow in the first half of the year, and leading companies maintained their competitive advantages.
In terms of the financial statements for the first half of the year, several major sports brands in China have delivered good transcripts. Among them, ANTA's revenue was 6.14 billion yuan, a year-on-year increase of 20.2%, and profit attributable to shareholders was 1.129 billion yuan, a year-on-year increase of 17%. Further expansion; Li Ning's core indicators are positive, profitability is enhanced, the first half turnaround, net profit of 113 million yuan; China's revenue to 650 million yuan, net profit of 479 million yuan, an increase of 65.06%, its main business Kappa brand The total sales for the first half of the year were 464 million yuan, which was the same as that of the same period of last year. The net profit of Xtep and 361° achieved a slight increase year-on-year, while the net profit of Peak and noble birds dropped slightly year-on-year.
Ning, a researcher at Galaxy International Securities, believes that the domestic sporting goods industry has gradually emerged from the past extensive expansion model in the past two years, strengthened the inventory control of channels, and clarified the improvement of product positioning and functionality. Although it still faces competitive pressures from the continued expansion of mainland brands and the sinking of channels by some foreign brands, with the help of the expansion of the market scale brought about by the dividends of the domestic sports industry policy, and the strategic positioning of major domestic brands in their own differentiation and specialization, it is believed that the domestic leader Enterprises will continue to maintain their respective competitive advantages and seize opportunities for future industry development.
Second, the proportion of new products increased, emphasizing functionality, the low-end segment price competition
1. Further optimization of product structure, rising proportion of new product sales
“For example, Li Ning’s sales of new products in the first half of this year increased compared to the same period last year, partially supporting its improvement in profitability. At the same time, the proportion of products with over 12 months of inventory in channel inventory decreased year-on-year in the first half of this year and can be expected in the future. The proportion of sales of new products is expected to increase further,†Ning Ning told a reporter from China Sports Products.
2. Increased R&D efforts to emphasize product specialty and functionality
Major sports brands continue to invest in technology research and development to provide consumers with high-quality, high-tech products. In the first half of this year, Anta and Foxconn jointly launched Anta intelligent running shoes and simultaneously launched Anta running app. 361 degrees in the first half of the launch of 361 ° + iMate intelligent running shoes, combined with shoes, smart chips and mobile app three elements. At the same time, continued investment in R&D has improved the functional and professionalism of the sports brands, and has also led to an increase in the profitability of the products. For example, in the first half of this year, Xtep's footwear revenue increased by 16.3% year-on-year, and its gross profit margin rose to 44.2%, mainly due to the popularity of professional sports running shoes among consumers. It is expected that with the further increase in sales of functional products in the future, it will support the increase in the company's gross profit margin.
3. The competition in the low-end price segment is fierce
“In the interim report, we will find that the average price of kappa in China is downgraded. This is also a signal. In comparison, kappa in these sports brands is positioned more high-end, and the product price is lowered. , indicating that the entire sportswear service consumption is tending to the mid-range price, the competition in the low-cost segment is fiercer.†Ma Gang, an independent commentator in the shoe and clothing industry, retail information technology and e-commerce observers.
Third, the effectiveness of multi-brand operation gradually fades, the brand to do long-term investment
1. Multi-brand strategy exerts force to support growth in business performance
“The multi-brand strategy supports the growth of ANTA's performance. In the first half of this year, FILA business (including FILA and FILA KIDS) increased its revenue contribution by more than 30% year-on-year, becoming one of the driving forces for ANTA’s performance growth. FILA positioned mid-to-high end market, FILA KIDS targeted The high-end children's sports goods market, after market cultivation in recent years, has begun to achieve sustained growth. With the increase in the proportion of FILA brand sales revenue with higher gross profit margin, it is expected to support the company's overall profitability in the future, said Ningning.
At the same time, the multi-brand strategy is also the main way for other sports brands to grab the Nuggets sports industry in the segment market. Including the "Shang" brand, which was launched before 361°, and the one-way joint venture with the Nordic outdoor brand, oneway, it has formed a joint venture company to promote skiing and cycling in China to further expand the Chinese winter sports market.
2. The new outlet for children's wear has arrived, and the brand needs to be further developed
In the first half of the year, Anta’s children’s income increased by more than 30% year-on-year; 361° children’s clothing maintained a strong growth momentum, with revenue growth of 16.5% to RMB 271.2 million, accounting for 10.7% of the Group’s turnover.
Ma Gang believes that the children's wear of these major sports brands have different operating modes. The children's wear of the Jinjiang plate sports brand is self-employed, while other sections of children's wear such as Li Ning and kappa children wear are all outsourced operations. In addition to Peak, the other six brands are arranging the children's wear market with great fanfare. "But the layout is not enough, and we must invest time and energy in doing it well."
“In the children's wear business of major brands, 361° children's wear has done relatively well. For four years in a row, Golden Eagle Cartoon TV's children's music growth program “China New Generation†has been cultivated for many years to establish a relatively mature customer base. One of the rules is that it is impossible to make a brand to see the effect soon, at least for more than 5 years, including FIDA or ANTA children purchased by Anta. Of course, Anta children grow up under such a good resource condition. Whether the overall number of stores or the size of sales has not yet reached a very satisfactory state, said Ma Gang.
Fourth, frequent acquisitions, companies can expand the investment surface to promote industrial development
This year, Anta announced the establishment of a joint venture company to exclusively operate Descente in China and open its first store. The purchase of Guiren Bird is more action. In addition to the holding retailer, Jiezhixing, it recently announced that it plans to invest RMB 382.5 million to acquire a 51% stake in the famous shoe store. .
“From the acquisition cases of these sports brands, we will see a differentiated advantage of the noble birds living in the A-share market, and the industrial layout is at the forefront of the industry.†Ma Gang told the China Sporting Goods News reporter to compare these listed companies. Half-year sales, noble birds ranked second to last place, but its total market value is relatively high, reaching more than 10 billion, these funds from the capital market for its related project acquisitions, investment has brought Big benefits. This also provides a better reason for more sports brands to return to A shares, that is, the valuation of Hong Kong stocks is indeed low. Compared to the noble bird, Xtep, Peak's valuation is seriously low, the actual performance is not worse than the noble bird, but the total market value is a big difference.
In addition, from the acquisition point of view, Magang pointed out that other brands are taking the industrial route, the focus is on the sportswear market, and the noble bird is taking the route of industrial capitalization. This is also the new bird brought to the industry. Think about how to use the capital from the listing to acquire the projects related to the main business to promote the development of the entire industry.
Fifth, in addition to football, running emerging markets, basketball is still the domain of brand competition
The rise of football and running sports has made it the two major market segments that sports brands are rushing to enter. In the first half of the year, Xtep held a football strategy conference and launched the “Edge Projectâ€. In addition to focusing on basketball, Peak also actively expanded and deepened the running product portfolio this year.
In addition to football and running, these two hot markets, the competition in the basketball field is still very fierce. In the first half of the year, Peak's performance decreased by 6.0% year-on-year. Overseas market revenue accounted for 22.8% of total turnover, which was an increase of 12.5% ​​year-on-year. Ma Gang believes that from the report point of view, Peak's overseas market performance is not particularly satisfactory, the domestic market has shrunk, it seems relatively large proportion of overseas markets, nothing more. Of course, the maintenance of overseas market share is inseparable from the efforts made by Peak in this regard.
"The most important reason that Peak's performance is affected is that it has encountered unprecedented challenges in the basketball field, not only from the international big-name competition but also from the acquisition of domestic marketing resources. Prior to this, Li Ning grabbed the Anba CBA sponsorship rights. Anta, in turn, grabbed the NBA China sponsorship rights of Peak Sports and forced them to nowhere. From this point of view, each brand is increasing its resources in basketball and Peak has been greatly affected. In this kind of market competition environment, whoever grabs more resources will become more and more powerful. The stronger the typical strong, the weaker the weaker. The biggest challenge for Peak is here." Magang said.
VI. Channels continue to be flat and the brand directly connects to terminal outlets
Li Ning is fully retailing, and all of its e-commerce channels use a retail model. In addition, this year Li Ning football project investment, is also directly to find end customers, point-to-point to discuss cooperation. Magang believes that this reveals the trend of flattening channels. Anta, Li Ning, Peak, Xtep... Almost every brand is talking about flat channels, which is an obvious signal.
“In the past, the flattening of channels for brands was more of a concept. Nowadays, the flattening of channels for many brands has been implemented. In particular, many shops were sold out through intermediate distributors before Xtep. Now, some distributors have opened many stores themselves. About half or two-thirds of the total.†Ma Gang analysis, channel model of sports brands, one is that distributors operate directly, that is, brands are shipped to distributors, distributors are retailers themselves, and brands are directly connected to terminals. Specific outlets; the other is that the brand sells products to distributors, and distributors sell the products to the retail stores below. In the past, the second situation was mostly, and now it is more the first situation, and the proportion of each brand in this area is increasing.
VII. Careful branding of stores, adjustment of shop structure, and emphasis on promotion of store efficiency
1. The overall number of stores has not changed significantly, and the shift from scale expansion to store promotion
The number of major brands opened in the first half of the year, Li Ning net growth of 36 stores; Anta total number of stores increased by 21 compared to the end of last year, FILA stores increased by 42; Kappa stores total net increase of 15 to 1282; Peak authorized retail operations A total of 6001 stores, a net increase from the end of 2015 two; elegant bird is a net closing shop 152 to 4313.
Ma Gang believes that overall, the number of sports brand stores does not change much, indicating that it is not the number of stores to measure the strength of the brand, the past is an extension of the expansion, whoever has more shops who have more advantages. Now it is how to increase the output of single stores and enhance the overall competitiveness of shops.
2. Better channels, such as shopping malls, are valued
“In the construction of sales channels, some sports brands are adapting to changes in consumption scenarios and are gradually adjusting their store structure, appropriately reducing the proportion of street stores and increasing the layout of shopping centers. Anta and Xtep plan to increase the proportion of shopping centers in the future. "Ning Ning said.
“The entire retail environment is changing, shopping malls, shopping malls and other channels sink, indirectly replacing some street stores. As a result, the number of street stores will decline. Future channels with better experience will be valued.†Magang That is to say.
VIII. The e-commerce channel is becoming more mature and the proportion of sales is increasing
In the first half of the online sales, the revenue of ANTA e-commerce increased by nearly 50% year-on-year; the income of Xtep e-commerce business increased by approximately 100%, accounting for approximately 15% of the total revenue; and the sales of Li-Ning e-commerce business increased by more than 100% year-on-year. The proportion has increased from 10% in the second half of last year to 12.8% in the first half of this year; China’s e-commerce sales growth has reached 88.7%; 361 Degrees expects its e-commerce special products to account for the proportion of the company’s entire e-commerce platform products from the current The 50% gradually increased to 80% in the medium to long term. Overall, e-commerce channels are gradually becoming an important source of revenue growth for sports footwear brands.
“The e-commerce channel’s driving role for the brand has been increasing. This is the inevitable result of the development of the market environment. The competition of the next-generation sports brand in the e-commerce sector will be even greater, and e-commerce will no longer compete on low prices as before. Once a channel is stabilized, it cannot be simply positioned as a clear inventory of sewers, but more as a brand image display, and more products and marketing plans are the brand's style of play. The future online battlefield will be as fierce as the line. Ma Gang told reporters at the China Sports Articles.
Nine, brand innovation marketing, new technologies represented by VR or will bring changes in the industry marketing
In order to welcome the Rio Olympic Games, major brands have made great efforts in Olympic marketing in the first half of this year, and have also achieved some results. In the capital market, Anta's market value rose by 10 billion during the Olympic Games.
In addition to Olympic marketing, the major sports brands in the first half of this year have made new attempts in marketing, such as Peak and Special Live Water Marketing. Ma Gang believes that live broadcasting is a better way, but broadcast alone is not enough, then the industry marketing will face greater innovation subversion, mainly technological innovation, live broadcast is just one of the points, the future of virtual reality will Bring more changes to brand marketing, such as how to combine new technologies represented by VR with current marketing.
"Of course, not just marketing, the emergence of a new technology will definitely affect the company and the entire industry. In the future, people may wear VR glasses to participate in remote orders. Through VR technology, remote marketing interactions, such as special steps Sponsoring stars, through VR technology can let everyone immersed in the scene to interact with stars; VR and stores combined, for example, people at home shopping for shoes, wear VR glasses can be immersive to the big shopping city, also Or to try shoes in a certain sports scene, this brings different experience to consumers. How to seize new technologies and opportunities to promote the development of the entire brand, this is a big variable in the future.†Ma Gang Said.
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