The Counterattack Of AI And ADI

UBS calculates through cost accounting. Xie The price of cheap shoes is 300 yuan / double, which is 25% lower than the current price. How to make some consumers get the pursuit of their own personality at a lower cost, while maintaining the consumption demands of the middle class, and facing the declaration of catching up and Surpassing of Chinese enterprises, the counterattack has already arrived.

"If you spend more than 50 yuan, will you change your mind and buy a pair of shoes?" Low price shoes As soon as the news came out, the capital market immediately responded: the prices of Chinese sports brands, such as, ",", "," and "China", fell.

In June this year, on the telephone conference of fiscal year 2010, Citigroup analysts asked Charlie Denson, President of the brand, whether there was a plan to enter the two or three tier cities of China. He responded that he did plan to enter China's two or three line or even four line cities, and would consider buying or introducing some other brands while launching NIKE series of different low-end products at different prices. Du Bairui, managing director of the Greater China group of the group, also said that the operation rights of these cities would be recovered from the dealers, so that the team could control the market of the two or three tier cities in person, and at the same time hoped to give the competitors a heavy blow by reducing prices.

He was a German student, though he gave his name carefully. Rolf A very Chinese translation has been selected, but it can not change the rigour of his Germanic people. In the 3V3 half court basketball game on campus basketball teams, he will still strictly enforce tactics and discipline, do not play any flowers, and look for the most concise means of scoring.

However, this is not the most noticeable part of Rowe. What is most interesting is that when Chinese students are on foot and boots, a blonde rove is wearing a pair of old fashioned cloth shoes sold in the school canteen. Everyone said that the foreigner was so cool and so personalities that the Germans didn't wear them. But he didn't think it was cool or cool. Instead, he felt that his classmates were making a fuss. "In China, I wear jeans, which are the most easily bought shoes in the locality, and the price is not expensive." Luo Erfu thinks he is just following his usual consumption habits and chooses a sports equipment with high cost performance.

Luo Fu doesn't quite understand his Chinese classmates' praise of these brands. These brands in Europe and America are indeed good quality, brand new designs, but they are only famous. "Wearing these brands of shoes can really make you add a little bit of bounce, but it will not make you superior."

Foreign monks are good at chanting. It seems that all foreign brands will have a mythological process after they enter China. When it first entered the Chinese market, it was once regarded as a valuable gift to give relatives and friends in the new year. But now, who would still think that drinking is worth showing off? Maybe, under the impact of domestic brands, it will return to the status of an ordinary brand sooner or later. But it is precisely because of this myth and the process of being elevated that when the market decides to lower the price and enter the two or three line cities and the domestic brands, it will give rise to a big advantage.

It is better to lean and seek than to bend down. The promotion of brand needs years of operation, and the promotion of product prices needs more time to digest. But the reverse is much simpler. No consumers will object to getting quality products. A UBS analysis shows that the attraction from brands, brands and product quality can stimulate consumers to spend more than 50 yuan, that is, the idea of "buying 50 pairs of shoes with more than $50" is likely to drive consumers who buy domestic brands of sports shoes such as China and Japan to take the lead in empathy.

The main consumer of sportswear is about 16-35 years old young people. In the first tier cities, this group has a richer and mature brand cognitive ability. In the two or three tier cities, young consumers' recognition of a brand will be more influenced by the people around them. Their pursuit of individuality will still leave the impression of traditional consumption concept. Compared with the consumption ability of the first tier cities, how to make them get the recognition of values at a lower cost is a way to win the recognition of this consumer group.

Xu Zhihua CEO kindly reminded him that "if we change brand positioning, we will do more harm than good". But is it a kind of "sink" or a "return" to the change of brand positioning?

A slightly ironic thing is that Chinese brands are doing the same thing in European and American markets when China's domestic brands continue to improve their product positioning by taking the example of China and China.

As early as 2002, she began to introduce fashion concepts into sports products in order to counter the invasion of fashion luxury brands such as Prada and Ralph Lauren in sports products. At that time, Yamamoto Teruji, the world-famous Japanese fashion designer, was invited to be the creative director of the SportStyle. He created a brand named Y-3, which is a "fashion leader".

And the same is true about the combination of sports products and fashion. On the one hand, it digs talents from the fashion industry. On the one hand, it merges and merges such enterprises. COLEHAAN, hockey brand BAUER and so on have joined the camp.

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When the Chinese sports brand stepped down from the altar and gave up the huge product premium caused by the brand effect voluntarily, SLVR's products were stationed in the global brand center. The price of the SLVR series is about three times the price of ordinary sports products, while the Y-3 series mentioned above is more than 10 times the price of ordinary sports products.

Behind this is the increasing consumption power of Chinese people. Now, China has surpassed the United States to become the world's second largest consumer of luxury goods. LV, and so on have been sinking to China's two or three tier cities.

Du Bairui, managing director of the Greater China group, admitted that price cuts would hurt the brand and consider it a temporary sacrifice. However, what kind of sacrifice is this? It is just to wear the crown to the real king. The active sinking of ordinary sports products has just made way for the rise of high-end products such as SLVR series and Y-3 series, leaving room for the market. Obviously, in the future battlefields of sports goods in the first tier cities, the main opponents of domestic sports brands will not be the ordinary sports products that fade from aura, but SLVR and Y-3.

If SLVR series and Y-3 series are a positive counterattack to the challenge of Chinese sports brand, then it is a surprise soldier who branded China's brand. In January 2010, the company announced that the brand will be jointly designed and produced by Baosheng international, and the future will be "China centric". After Baosheng international took over, the positioning of the brand has changed dramatically. The lowest price of its products has dropped to 133 yuan. The strong performance price ratio will undoubtedly pose a direct threat to domestic brands.

Du Bairui once said, "we do not mind changing the brand image of China in China". Maybe he said that the image change not only refers to the return of ordinary sports products, but also includes the SLVR series and Y-3 Series in the Chinese market, and the 180 degree turn.

In May 2009, there was a "discount ticket" storm. At that time, a large number of discount tickets were sent to the society, while the discount tickets could enjoy a maximum of 85% off. This resulted in the sale of more than 600 queues at the sale of the two stores. The scene was once out of control and the police were forced to maintain order.

The 85% off "dumping" seems to be just an accident, but it is an indisputable fact that the price has started to be recessive. Due to high inventory expectations due to the high expectations of the Olympic Games, since the second half of 2008, the company has been trying to "de stock". In the process, for the sake of maintaining the price system and maintaining the brand premium, he once opposed the discount sale behavior of his dealers, but in early 2009, he finally faced the reality and allowed dealers to open discount stores. Immediately after the sharp increase in the discount market in China, a large number of 30 percent off, 50 percent off of the products poured into the market.

In the long run, high-end brands bring enough product premium to them. In the course of their brand return, these products premium can become their advantage to wave price cuts. In 2010, the fourth quarter earnings report released in 2009 showed that the pre tax profit margin in China was as high as 40.3%, compared with 24.2% in the North American market. 40.3%, the pre tax profit margin has set aside enough room for reducing prices.

In the report released by UBS, the price of low price shoes is calculated by careful cost accounting, which is 300 yuan / double. In the report, UBS analyzed that the price of the cheapest sneakers is 395 yuan at present, the cost of the distribution fee is about 134 yuan, the production cost is about 95 yuan, and the remaining profit is 78 yuan. According to the "300 yuan plan model" provided by the UBS team, the supplier should reduce the operating cost by 9% and the production cost by 26%, and the dealer will have to reduce the operating cost by 20% and 36% respectively. For these purposes, it is likely that more factories will be transferred to China's inland areas and cost reduction in product design and procurement. UBS analysis, these initiatives will lead to a decrease of about 21% of unit profits, but these losses can be offset by the rapid growth of sales volume.

But what does it mean for China's sports brand? It's not hard to understand that in late June 2010, UBS issued a report saying that it would start selling cheaper sneakers in the mainland and news of its entry into the second tier cities. On the day of the news release, the shares fell 5.65%, while the shares fell 1.36%, while the benchmark fell 1.81%. In the next two weeks, the shares fell more than 10%.

In the UBS report, on the whole, the scale of China's sports shoes Market in 2010 is expected to reach 69 billion yuan, and by 2020, the market size of the famous brand sports shoes may reach 297 billion yuan. Facing the big cake, the storm of competition between Chinese and foreign sports brands is about to be staged.