China Sports Shoes Brand Accelerates Channel Expansion

August 10th, a few days ago,

In the past six months, Anta has completed the new 2/3 plan for this year.

At the beginning of the year, XTEP announced that it had added 800-1000 stores on the basis of the original 6000 stores, mainly concentrated in the two or three tier cities in the mainland. In addition, the group will open business at 100 overseas locations.

In the two or three line cities to speed up the horse race enclosure, PEAK and 361 degrees are disclosed in the 2009 earnings report, will be added in the first tier cities.

Facing the Nike market that has been ploughing the first line market for many years

What causes them to occupy the two or three line market and adopt the strategy of encircling the cities in the countryside? The original intention of their entry into the first tier cities is not only to improve the stereoscopic network sales mode, but also whether there is a need for brand internationalization behind them?

The biggest beneficiaries of the two or three tier cities

The strength of Anta's competition with other domestic sports leading brands and international brands initially (continues to the present) comes from the two or three tier cities in China.

This is also a unique phenomenon in the development of sports brand in China.

International brands such as Nike and Adidas entered the domestic first tier cities earlier, and now basically monopolize the industry.

And domestic brands started late, facing the almost monopolized first tier market, they chose the strategic layout of "encircling the cities in the countryside" earlier, and took the two or three line city as their main consumer market.

Regardless of price or product, the domestic sports brands represented by Jinjiang are more easily accepted by consumers in these regions, so there is a strategic layout of domestic sports brands lacking first-line market share.

Facts have also proved that truly broad markets do exist in these areas.

In 2008, the financial turmoil swept the world, and the high-end price of international brands was obviously less competitive than the low price of domestic brands. This also enabled a large number of Jinjiang sporting goods brands to develop rapidly under the help of the capital market.

Several sports brands in Jinjiang reported in 2009 that the rapid growth of the two or three tier cities has made them the biggest beneficiaries of the sports apparel market, and their performance will remain better.

In the 2009 annual report of Anta and XTEP, we can clearly see that the profit contribution rate of the two or three line market exceeds 50%.

However, after stabilizing the two or three tier cities, entering the first tier cities is the inevitable choice for the development of the international sports brand market and the expansion of development space after the development of the domestic sports brands headed by the Jinjiang department.

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Expanding first tier cities to penetrate high-end markets

"The competitive advantage on the channel shows that Anta is consolidating its foundation and meeting consumers with a more perfect distribution network layout."

Zhang Tao, vice president of Anta, said, "on the other hand, it also proves that the consumer identity of Anta brand -- the premise of mass opening shops, must be consumers' recognition of Anta brand and increasing demand for Anta products."

He also said that at present, the competitiveness of domestic sporting goods enterprises is very close. Competition is mainly focused on brand building and channel construction. Therefore, channel competition can determine the competition pattern to a certain extent.

With Anta and XTEP entering the first-line market gradually, they will face up to the famous sports brands around the world. This also means that Jinjiang sporting goods brand is trying to compete for the high-end market share.

As of June 30th this year, Anta brand has opened 353 stores in Shanghai and Beijing, and 20% of the 6809 stores in Lining brand are located in the first tier cities.

According to PEAK CEO Xu Zhihua, PEAK now has 80 stores in Shanghai, plus 200 stores in Beijing and Shenzhen, and the number will continue to expand in 200.

Lining, CEO, a sports consultancy, said: "at present, 20% of the sales of Lining are from the first-line market, and the first tier cities are of great significance to Lining, PEAK and PEAK.

However, the competitiveness of Jinjiang brands is slightly inferior in the first tier market.

Zhang Qing said that one way to enhance the brand image is to set up stores in Shanghai and Beijing's core business circle. The effect is immediate. And the Jinjiang department brand after capital injection is fully capable, not only in capital but also in professional teams, which can support a large number of stores in the first tier cities.

Trying overseas market to promote brand internationalization

After gaining a firm foothold in the domestic market, some of Quanzhou's sports brands have begun to reach overseas in recent years.

Quanzhou, Macao, Taiwan and Southeast Asian markets, which are not far off the geographical location, become the bridgeheads for overseas expansion of sports shoes brands.

Following the signing of the Premier League by XTEP, Ding Shuibo, President of XTEP International Holdings Limited, said that apart from the established domestic shop plan, the group will also open business at 100 overseas locations.

In June of this year,

Xu Jingnan, chairman of PEAK group, also said he would consider opening the PEAK store to Eastern Europe after the inspection in Eastern Europe.

"There is a gap between Eastern European market and Western European market because of the level of consumption, which is very suitable for domestic brands to infiltrate Europe."

The reasons for the movement of local sports brands are not difficult to explain. XTEP's signing of the Premier League and PEAK's hand in hand NBA show that domestic brands have begun to integrate and use the global marketing communication resources.

"At the early stage, the purpose of domestic brand integration and application of international marketing resources is to enhance brand's brand advantage in the country, and to effectively develop local market competition by signing international marketing resources. But with the further strengthening of these brands' competitiveness, it is necessary to take into consideration the effective export of brands while maximizing the use of these international marketing communication resources, and the opening of Chinese brands to overseas stores is the inevitable result of the development of these brand strategies."

Industry analysis.