Kappa: How Can Chinese Enterprises Revive The International Brand?

In China's brand of sports shoes and clothing, there is a force that has sprung up suddenly since six years ago.

Restoration: repositioning the brand of Kappa

When Kappa entered China, its position was rather vague.

In the early days, the agent Li Ning Co initially tried to conquer consumers with traditional professional product lines, focusing on the professional sports field, competing with Nike and Adidas in product pricing and other aspects, and competing for the market.

But because of similar products and limited brand appeal, they soon found that this method was not feasible.

In 2004, the unknown Chinese local enterprises, the Chinese trend, bought the exclusive right of Kappa, the famous sports brand of Italy, in the Chinese market from Li Ning Co.

At that time, Kappa's operation in the Chinese market had been in a state of loss.

In May 2005, with the favorable timing of poor cash flow of Kappa parent company Italy BasicNet group, China's trend bought out Kappa's brand ownership and permanent management rights in mainland China and Macao.

At that time, people were described as channel merchants.

But is it successful after the reverse takeover?

After changing from the franchisee to the brand owner and realizing the comprehensive control and operation of the KAPPA brand, the Chinese trend has repositioned the Kappa brand: Aiming at a new consumer group, its core customer is a 18~30 year old young person who wants to establish the brand image of "sports, fashion, sexy and taste", and enhance the brand recognition with bright colors, tailored tailoring, and easily identifiable brand identities.

This is not common in sports brand stores in the past, avoiding the market pressure of the dominant brands in the sportswear market.

After the brand is repositioned, the product and R & D system must also be adjusted accordingly.

The reason why Kappa is favored by young consumers is largely due to its understanding and control of color.

Rees and Trout first put forward the concept of brand relocation.

Repositioning is to reposition the brand, aiming at getting rid of the predicament and gaining new growth and vitality of the brand.

It is not a negation of the original positioning, but a "sublation" of the original brand strategy after the market discipline.

Kappa undoubtedly completed a brand repositioning process after the reverse takeover.

Control: brand buyout mode

One of the most important reasons for China's trend to rise suddenly in a short time is that it bought the Kappa brand's right to use the Chinese market in the process of development.

A very important point in building a business model is "upgrading the threshold of competition and controlling the core resources that others can not be copied", which is the key supporting point of venture capital.

Only by mastering the ability that can not be duplicated can enterprises establish the threshold of competition, and thus have the basis of pricing power with high competition threshold. If they have the pricing power, they can get high profits and sustainable profits.

Brand is a core resource.

The key point in the development of China's trend is that when Kappa's parent company encountered problems and its performance declined, China decided to raise funds to Morgan Stanley for 38 million US dollars, and achieved the right to use Kappa in the Chinese market.

Many Chinese enterprises are unable to get rid of the embarrassment of dressing for others, even though they may not have the core resources, even though they may earn a profit for a while.

With the acquisition of Kappa brand core resources, China has been able to control its Chinese business for a long time and take its fate in its own hands.

It can be said that the reason why Kappa China has been able to turn a "tasteless" business of Li Ning Co into a company worth 3 billion yuan is rooted in the change of China's identity.

After the Chinese market takes the initiative, China's trend is eyeing the forefront of Asian fashion, Japan.

In April 2008, China moved to acquire Phenix owned by Kappa brand in Japan.

This fully embodies the Kappa brand management mode of "single brand internationalization and regional multi brand".

China plans to develop into an international single brand, which is the Kappa brand which has more than 90% of its sales revenue.

Phenix owns not only the ownership and management rights of Kappa brand in Japan, but also one of the three owners of Kappa brand in the world.

In addition, its skiing brand PHENIX.

These conditions are consistent with the strategic objectives of China's movements.

After the acquisition of Phenix, China's trend has also taken the first step in its international journey.