Pathfinder: Dislocation Competition In "Encircling The Cities In The Countryside"

On the choice of scale and brand, scale will often become the first choice for enterprises.

In a short span of 12 years, the Pathfinder, through the "dumbbell" light asset mode and the dislocation strategy, beat Columbia (Columbia) and Lo J Faith (The North Face), and rapidly grew into the first brand of domestic outdoor products. With the help of the brand and the development space benefited from the market, the Pathfinder introduced the policy of "encircling the cities by the countryside", such as Lining and Anta, and steadily expanded the pace of expansion.

By studying the growth pattern of Pathfinder, we intend to point out that in the background of the confrontation between industries (sports fields), by exploiting the market segments (outdoor areas), fully mobilizing their advantages and implementing the blue ocean strategy, the cost of competition will be greatly reduced or the prospects for development will be more optimistic.

Bypass the main battlefield

"Ten years ago, we only knew about sports brands such as Nike, Adidas and Lining. Now, outdoor brands such as Columbia and Pathfinder are also entering the public view."

One industry insider described this way.

Pathfinder was founded in 1999, when domestic sports brands were built up, foreign brands such as Nike and Adidas almost monopolized the domestic first-line market, and domestic brands such as Lining and Anta also took shape, and the proportion in the two or three line market continued to improve.

Against this background, the direction of Pathfinder is outdoor products, which is actually a branch of sports industry and a more subdivided field.

The data showed that in the early days of the explorer, the American outdoor goods market had reached hundreds of billions of dollars and formed a complete industrial chain. The upstream and downstream linkage of the industrial chain produced the output value of hundreds of billions of dollars; and Europe also had a market of nearly 5 billion euros.

Limited by consumer cognition and income level, the domestic outdoor field was almost blank at that time. Although Beijing had established outdoor stores in 1995, its brand strength was weak, far from the scale and industrialization level.

Faced with such a virgin land with opportunities and risks, Pathfinder chose to enter.

Pioneers represented by Pathfinder have been steady and steady in this field, expanding the stock market from hundreds of millions of yuan in 2000 to 7 billion 130 million yuan last year, with an average annual growth rate of nearly 50%. Moreover, COCA, the China Textile Business Association, is expected to continue to maintain high growth potential in the future.

Matched with the steady performance, data show that the gross profit margin of the Pathfinder in the past 2008-2010 years is 45.17%, 47.89% and 49.04% respectively, and the net profit is 25 million 470 thousand yuan, 44 million 30 thousand yuan and 53 million 900 thousand yuan respectively.

For future plans, Peng Xin, the new president of Adidas, Anta and other companies, said that the compound growth rate of the future performance of the Pathfinder should be no less than 50%, which is slightly higher than the average growth rate of the industry.

At present, the direct collision with Pathfinder is mainly Columbia, The North Face and so on. These competitors have been operating for half a century, and have laid strong channel resources in the whole world. However, the domestic outdoor industry is after all an emerging industry with vast market space, and strategically forward-looking enterprises are often able to win the opportunity, and the Pathfinder has seized such an opportunity.

On the other hand, if the Pathfinder set foot in the sports industry in the early days of his career, he would face a market of oligarchy and competition.

It is reported that 2002-2007 years is the golden period of development of sports brands in China. After this period of shuffling and integration, there has been a situation of "separatist Princes".

Domestic brands include Lining, Anta, PEAK, XTEP and 31st degree. Foreign brands include Adidas, Nike, CONVERSE, CONVERSE, Jordan and so on. These brands basically occupy the domestic market.

The Pathfinder avoids the field of sports, in fact, avoids the large-scale merger war, bypasses the main battlefield of the sports field, and chooses the outdoor industry, which is a successful attempt.

Dumbbell style light asset model

The outdoor field is relatively young, and the resistance to business development is relatively small. However, the impact of Columbia and other international leaders can not be ignored.

In those days, Lining and Anta were shocked by brands such as Nike and Adidas when they were expanding.

The problem is just the representation, and the deep-seated problem is, what strategy should domestic enterprises take when they compete with foreign brands to seize the market? State securities (600109) Zhang Bin pointed out that the difference between domestic and international brands is mainly due to the fact that domestic brands pay too much attention to channel construction and pay little attention to the products, which leads to the same operation mode and serious homogenization of products. Lining is a typical case; Credit Suisse believes that the Chinese sports brand has fallen into a brand crisis.

Can the outdoor industry bypass such a business model? Insiders say that it is not easy to grab the market with foreign brands. The longer the time dragged, the more enterprises will enter the field. At present, there are more than 500 brands active. Although the intensity of competition is weaker than that of sports, the sooner or later the future will be white hot.

For this reason, the Pathfinder adopts the dumbbell mode of operation, which highlights the emphasis on brand.

The "dumbbell" means that the Explorer will invest more in the upstream and downstream of the business chain with higher added value and outsource in the middle stream (production).

Specifically, Pathfinder pays more attention to product design, research and development and laying of channels, and product design and R & D is the most primitive embodiment of brand building.

Statistics show that the R & D investment in the past 2008-2010 years was 6 million 340 thousand yuan, 8 million 920 thousand yuan, and 14 million 480 thousand yuan respectively, accounting for about 3% of the annual revenue and nearly ten patents for R & D achievements.

In addition, the Pathfinder advocated the concept of "Outdoors" and set up the planning center to control the brand image as a whole.

China Merchants Securities (600999) Wang Wei pointed out that in the outdoor area, "one of the most important tools for enterprises to seize the market is to have outstanding brand image and precise brand positioning". The Pathfinder initially realized the access from design, publicity to the whole process of sales, and created a high level brand image of "Pathfinder" professional, taste and fashion.

Up to now, the brand influence of Pathfinder ranks first in the domestic market.

Based on the "dumbbell" mode of operation, Pathfinder is committed to shaping the brand image, and in the supporting strategy, the Pathfinder's "light asset" mode is worth mentioning.

The "light assets" here is different from the "light assets" which is mainly based on property leasing in Tianhong shopping mall (002419) (002419.SZ). It means that the Pathfinder is completely outsourced in the field of product production, outsourcing part of the raw material procurement and finished product logistics, thus saving a lot of plant and equipment investment and labor costs, and the overall operation is lighter.

In addition, the Pathfinder in the network construction of the comprehensive use of "direct" and "join" business mode, combined with their actual characteristics, to join the store, the current explorer's franchisee proportion of more than 80%.

The industry believes that when the industry is not yet mature, franchisees have higher cost performance ratio (revenue / overall cost) and easier to occupy the market quickly.

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Dislocation competition avoids "hard hitting"

Competition is always the key that enterprises can not get around. The "dumbbell" business model of Explorer can optimize the allocation of resources and focus on brand building. However, Columbia, The North Face and other senior brands are deep in accumulation after all, and their market status is hard to shake easily.

Columbia, The North Face and so on have 300 shops in China, and most of them are rooted in the main commercial areas of the first tier cities and developed areas such as Beijing and Shanghai. With the accumulation of technology and capital advantages over the years, the influence of brands such as Columbia should not be underestimated.

It is reported that Columbia and other brand users experience better, the quality is more high-end, the price of segmentation products is also higher than a big cut.

Such an industry pattern has also appeared in the sports field. Lining and Anta have been strongly resisted by Nike and Adidas in the first tier market. For the way of survival, Lining and others adopted the strategy of "encircling the cities by the countryside", taking the second tier cities as the main battlefields, and rapidly moving to the three or four tier cities, eventually forming a first-line market encirclement and gradually advancing.

Facts have proved that this strategy basically conforms to the competitive situation at that time.

Can the Pathfinder follow this strategy? Unlike Lining, the user of the Pathfinder is slightly stronger, that is, Pathfinder is relatively high in product pricing and closely related to the level of regional income.

In order to avoid direct confrontation with Columbia, and hastily focus on the two or three tier cities, it is not in line with the current situation of the outdoor industry. The front-line market and the core business district are still the main battleground of Pathfinder.

Such embarrassment is hard to avoid, and the Pathfinder should adopt the way of dislocation competition.

In the first-line market, Pathfinder makes full use of the characteristics of less Columbia shops and slow opening stores, actively integrating resources and vigorously developing various channels.

At present, Direct stores and franchisees are mostly located in shopping malls and so on. The proportion of exclusive stores is relatively low, but the proportion is improving. In addition, the introduction of business super system is also being considered, and e-commerce business is also the direction of development.

Through a series of measures, Pathfinder can directly compete with Columbia in the first tier market.

While occupying the first tier market, Pathfinder moderately draws on the "rural encircling the city" mode, and the business area is gradually developing in two or three line cities. In this area, the competition faced by the Pathfinder is relatively small, and the Pathfinder has achieved some success through the cultivation of the two level distributors and the promotion of the market.

For the two or three line cities, the basic idea of Pathfinder is to "reasonably plan the contribution of new shop growth and single store efficiency" on the basis of continuing to enhance the coverage of the two tier market.

Through this kind of dislocation competition, Pathfinder has gradually established the leading position in the industry. However, whether the future can continue to maintain high growth depends on the competitive mode of the industry and the overall conception of the Pathfinder.

The competition pattern of the outdoor industry is the competition between the brand and the scale. Whether the brand decides the scale or the scale decides the brand is the problem that Pathfinder has to think about.