Sports Brand Shoe Enterprises Speed Up Beachline Two Or Three Line Market

August 13th, if

It is worth noting that the capital market as a barometer has taken the lead in expressing concern.

With the news that Nike is planning to push low price shoes in the mainland, the share price of several domestic sports brand enterprises listed in Hong Kong fell accordingly.

In addition, UBS Securities lowered the rating of mainland sporting goods shares.

In response to the fall in share prices, the Peak Sport Products Co Limited took the lead in responding. According to the data of the Hongkong stock exchange, Xu Zhida, deputy general manager and executive director of PEAK sports, declared in July 22nd that he increased 700 thousand shares of the company's shares, and the shareholding increased from 12.99% to 13.03%.

PEAK CEO admitted in an interview with reporters that our recent increase in holdings was mainly due to a slight overfall in the previous period, which is unfavorable to our investors and people who really care about the development of PEAK. In addition, we have great confidence in ourselves, so we feel that we can increase our holdings to better protect the interests of investors.

Speaking of the current PEAK price earnings ratio of about 12 times, Xu Zhihua has some helplessness, "this is not consistent with the growth, the actual price earnings ratio should be 17 to 18 times, or even 20 times."

Another analyst said that Nike was eager to adjust its strategy in China, but also had no choice but to face the rising land rent price in the first tier cities.

Perhaps for Lining, Anta and PEAK, the real encounter is just beginning.

Nike's "center of gravity down" hits more

In early May this year, Adidas announced its first quarter results, showing that sales in the Greater China region fell 15% year-on-year.

This means that, on the one hand, the first-line market that has been familiar with these international brands has gradually become saturated. On the other hand, they must adjust their sales channels and product mix as soon as possible, so as to get into the two or three tier cities with low consumption level, rather than the natural promotion of consumers' ability to wait and wait.

Before UBS had conducted research on the price of footwear products in the two or three cities of mainland China, it was found that footwear products in the 170~250 yuan range could not only protect the profits of manufacturers, but also allow local consumers to accept them, which is the "perfect price" range of footwear products.

And when consumers are able to buy Nike shoes for more than 50 yuan, where will the domestic brands go? Of course, because the positioning and price of each brand are different, it can not be generalized, and Nike will lower the price, and which brand will impact more specifically?

In some industry circles, if Nike decides to sell products with lower price in China, the average high priced domestic brands, such as Lining, will bear the brunt, which will be most affected in the short term, because some consumers in the two or three tier cities may "switch" to Nike.

Especially noteworthy is that over the past few years, Lining is constantly raising the price, and now its footwear products average selling price is also about 300 yuan.

A recent order will show that Lining's footwear orders in the 3 quarter of 2010 increased by 11%.

In addition, the average price of KAPPA brand shoes in China's trend is around 370 yuan.

Liang Yuchang, a researcher at UBS Securities, said, "the impact of Nike's low-priced shoes on these brands is expected to be most obvious."

He believes that the marketing budget of domestic sports brands will be an important factor in deciding whether they can survive in this wave.

Some companies with limited marketing resources are likely to be eliminated in this encounter.

However, Nike's entry into the two or three tier market also has its own handicap.

Some domestic brand dealers said, "at present, the profit margins of agents such as Anta and Lining are generally about 5 percentage points higher than that of agent Nike.

For the majority of small and medium-sized distributors, they will prefer to profit from the same brand. "

And Nike's current distributor, such as BELLE, does not necessarily have the experience and strength to penetrate into the two or three tier market.

It seems that if Nike wants to enter the two or three tier market in China, it needs to compete with Anta and PEAK, which occupy the "two or three line" market for a long time, and needs to do much more than to launch products.

Some retailers also pointed out that if Nike successfully penetrated into the two or three tier cities, some of the domestic brands with general brand image would be squeezed out of the market.

In addition, the annual marketing budget of 350 million -5 billion small and medium-sized brands are unlikely to compete with Nike and Lining all over the country.

Despite a heavy blow in the short term, domestic brands with considerable marketing budget should be able to resist Nike, which is "low-end".

Domestic brands are not afraid of low price competition.

Sports brands will also enter the first tier cities. This is a process of mutual penetration.

Of course, Nike is not the main competitor of PEAK at present because it has different definitions.

But for any brand competition, we should not be afraid. What we have to do is to turn competition into power all the time.

And Anta dealer Ma Gang also questioned whether Nike would really cut prices.

He believes that Nike will have more consideration before playing this card, that is, whether the price reduction will lead to the damage of Nike's brand, thereby making it lose the most loyal users.

"For example, a middle class in a city walks out of the door and finds that all the shoes on the street are brand names. Will he insist on his choice?" he said.

"I do not think that Nike will adopt the way of price reduction to enter the two or three line market."

Xu Jingnan, chairman of PEAK Group Co., Ltd., told reporters.

The rumour that Nike wants to reduce price is not this year only, there is Nike hearsay in every ten years.

This is also undisputable, because if Nike wants to grab a bigger cake in China, then the great prospect of the two or three line market is undoubtedly tempting, and this has become the willingness of some people.

It is worth noting that although Nike has been eyeing the Chinese two or three line market, trying to compete with domestic brands, the domestic brands represented by Lining and PEAK have also rushed into Nike's base camp. The United States has set up R & D centers, and all sides are progressing smoothly.

Xu Zhihua, at the same time, told reporters that if Nike is more likely to change its brand positioning in China, it is unlikely to do so, but it is likely to launch individual styles.

"As a multinational enterprise, it is difficult to drop prices."

Xu Zhihua's outspoken analysis points out that

He Ruibo, executive director and chief financial officer of XTEP, also said that Nike has been developing in the mainland for more than 10 years, and has always been aware of the demand of mainland consumers for high-end products. It also understands that low-end products are not the source of profits for Nike. Therefore, it is not considered that the two or three line city is the general direction of Nike, nor will there be too many products mentioned above.

If Nike makes the deployment, XTEP will only regard it as one more local brand competition.

At present, local brands have more advantages in two or three tier cities. On the one hand, the market is more familiar with local brands. On the other hand, the relevant brands have already had a sound distribution network in related markets.

Xu Zhihua believes that Nike and other well-known brands for the impact of the two or three line cities, and did not feel the majority of pressure.

"The price reduction has double-sided influence, although low price means more sales, but high price can also deepen consumer's impression of the brand in everyone's mind. Once the brand is established, everything can get twice the result with half the effort.

If Nike launches a low price, it will subvert the entire value chain system, which will inevitably bring about the impact of values.

In addition, according to UBS's report, in general, the scale of China's sports shoes market, including famous brands and general brands, will reach 69 billion yuan in 2010, and by 2020, the market size of the famous brand sneakers may reach 297 billion yuan.

In other words, in the next 10 years, the annual compound growth rate of China's sports apparel industry will still reach 15.7%.

So, for domestic brands, how should we grasp the development opportunities in the two or three tier cities?

If we simply look at the budget of brand marketing, how to use ourselves to understand the local market in the two or three line market earlier, and to make the limited brand marketing budget really on the cutting edge will become the key to their base in the two or three line cities.

Compared with the consumers in the first tier cities, the consumers in the two or three line market follow a completely different logic to the recognition of a brand.

The main consumer of sports apparel industry is about 16-35 years old young people.

In the first tier cities, people of this age group not only have more abundant and mature brand cognitive ability.

But in the two or three tier cities, young people of this age group will still be more influenced by the people around them. Their pursuit of individuality will still leave the impression of traditional consumption concept.

At the same time, because of the relatively limited consumption ability, how to get them to pursue their own personality and a better life at a lower cost will be the main direction of efforts to win the brands recognized by some consumers.

It is also for this reason that Anta, "PEAK," and "bravery", such as "PEAK" and "bravery", are likely to become more and more sophisticated in online shopping, while the international brand sales channels continue to sink.