Advantages And Disadvantages Checks And Balances: Sportswear Price Increase Odds Geometry?

This year is the opening year of 12th Five-Year. "12th Five-Year" is a very important period to change the mode of economic development. An important content of changing the mode of economic development is to expand domestic demand, especially to expand the consumption of residents. This means that expanding consumption will become the main driving force for domestic economic growth in the future. Therefore, the concept of domestic demand, which has the pricing power or the ability to transfer cost pressures under the trend of rising prices, will become the investment theme of the A share market. In the era of high inflation, the industry that has the ability to raise prices or price increases far exceeds costs will benefit greatly. In this regard, consumer plates, represented by food and beverage, clothing, luxury goods and retail business, are typical representatives. They can not only transfer costs to consumers, but also increase the price increase and grab higher profits from terminals. Ping An Securities analyst Li Yan said.

The above is the positive view of the clothing market in the stock market. Is this advantage also a background factor for the price increase of the sports brands? In the announcement of the price increase, the first one to raise the price tag is Lining, which has also led to a new wave of "rising" of the sportswear brand.

　 Sportswear rises.

According to the Li Ning Co's announcement recently, the price of shoes will increase by 7.8% in the fourth quarter, and clothing will increase by 17.9%. Before that, Anta, XTEP, PEAK and 31st degree also announced the price increase. And the increase is as high as 10%. Sports shoes and clothing of the five leading sports brands in China will rise again by one to 20%.

Lining spokesman said: "the main reason for this increase is mainly the interaction of raw materials, manpower and store rentals, and the price increase is also an industry trend."

For this round of collective price increases of domestic brands, Xiong Xiaokun, a consultant of light industry in CIC, believes that under the background of price level, rental cost and labor cost increase, and now the consumption level of consumers is gradually changing from low to high end, price adjustment is also the choice that enterprises have to make.

In the past two years, many domestic sportswear brands have been catching up with international brands such as Nike and Adidas. This shows that the distance between some famous sports brands and international brands is shrinking. "For some brands whose price ranges from 200 yuan to 300 yuan, frequent price increases may be faced with the risk of losing consumers." Xiong Xiaokun said. {page_break}

The explanation for the collective price increases of local sports brands is also the same. According to XTEP's semi annual report, staff costs increased from 81 million 318 thousand yuan to 95 million 345 thousand yuan last year, an increase of 17.2% over the same period last year. The cost of raw material sales was 537 million yuan, an increase of 18.7% over the same period last year. An insider with a foreign sports brand told reporters: "the price of fabrics has increased considerably, especially the price of imported fabrics has risen by more than 30%, and the wages of factory workers have just risen, otherwise skilled workers are hard to recruit."

In addition, there has been a small increase in expenditure on publicity and promotion. Taking Anta as an example, the proportion of advertising and publicity expenses in the first half of this year accounted for 12% of business revenue, an increase of 0.8% compared with the same period last year. But not all sporting goods companies raise their prices because of increased costs. Earlier, Li Ning Co stakeholders said that the price increase was mainly aimed at enhancing brand positioning and narrowing the distance between multinational sports brands. Price increases, advantages outweigh disadvantages?

Will the price increase of sportswear go to the whole industry? Industry insiders say that the retail price of branded clothing has generally risen by 10%~15%. People in the industry expect that the wholesale price of clothing products in autumn and winter will also increase by 10%~15% this year. Repeated increases in price have dampened market sales to some extent. Taking Lining as an example, the increase in prices has led to the decline in orders for clothing and footwear products in the second quarter of this year by more than 7% and 8% respectively.

As for the market acceptance of product price increases, Xu Yunfeng, a sports brand analyst, believes that the reason for rising costs is too pale for consumers. If enterprises raise prices, they must add additional value to products. Otherwise, the price increase will only drain more consumers, especially for the local low-end brands. Foreign brands' consumer groups may not be too sensitive to price, but consumers may choose other products if the low-end brands increase.

"Fashion clothes are not bought every day, just like food. When prices go up, they buy less, or browse online." This is the real idea of many consumers. Nowadays, there are few shopping malls without activities. Although some salesmen are reluctant to disclose specific figures, their helpless expression and the statement of "more effort to sell" illustrate the difficulty of increasing sales.

Ma Gang, a famous sports brand observer, believes that a new round of price increases will only do more harm than good. The reason is that many domestic sports brands are targeting the middle and low class consumers, who are more sensitive to price movements. While raising the price of domestic brands collectively, some middle and low-grade markets also emerged. The result of price increase undoubtedly increases the difficulty of marketing.

Recently, Adidas announced its first half results, and its sales in the Greater China region reached 552 million euros, up 37% from the same period last year, compared with 403 million euros in the same period last year. Excluding the exchange rate factor, it grew 38% over the same period last year. The increase is ranked first in the six largest market of Adidas. Adidas's performance has gone from a negative growth in 2009 to a "blowout" in today's performance. For Li Ning Co, which is suffering from inventory problems, it has set up a "benchmark" for Jedi counterattack. Judging from the current situation, Adidas in 2009 and 2010 to deal with inventory, emptying the backlog of sales channels, optimize the sales channel is the right decision, in the first half of 2010, Adidas in the Chinese market resumed growth. In the second quarter of this year, sales increased by 41% over the same period last year.

The above data show that most of the domestic sports brands that do not have a very well-known reputation should not be easy to follow the trend of price increase if they want to recognize their target groups. Local brands should be cautious in adjusting prices, and not be able to rise in line. When we really need to adjust prices, we must have a clear price gradient for price adjustment time, price adjustment and price adjustment areas, so as to reduce the loss of consumers.

Adidas's case, hoping to give some inspiration to domestic brands. At present, the pressure of price rise is greater, and it is "universal". Anti inflation In this era, responsible enterprises should explore other channels besides price increases. Digestion cost 。