China Moves Toward Chinese Style Entrepreneurship Game

In October 10th, the Chinese trend (3818.HK) was officially listed on the main board of the Hongkong stock exchange, offering 1 billion 375 million shares to the world at the selling price of 3.98 yuan, accounting for 25% of its expanded share capital.

As the third sports companies listed on the Hongkong stock exchange after Lining and Anta, China's trend is highly sought after: on the first day of the listing, its turnover is about 694 million 500 thousand shares, with a turnover of about 3 billion 478 million yuan, the highest intraday price of 5.56 yuan on that day, which was 5.43 yuan, 36.43% higher than the stock price.

The total market value reached HK $29 billion 870 million on that day, and became the leading sport listed company in Hongkong.

Before that, we knew little about the trend of China, but when it comes to the KAPPA brand they operate, many people are not familiar with the "back to back" brand logo.

Little is known, whether it is China's trend, or the trend of China's chairman Chen Yihong, CEO Qin Dazhong are from the Lining group, KAPPA also in Lining's hands.

Today, the trend of China has become a new market favorite with Lining.

Reporter Yu Jin came to their headquarters in Beijing economic and Technological Development Zone, and shared the secret of China's success with CEO Qin Dazhong in this three story quiet building.

If we regard the Li Ning Co as "blue", the trend of China is "green".

"Li Ning Co made me."

Chen Yihong, chairman of China's trend, has stressed this many times.

Before leaving home, Chen Yihong spent 14 years in the Li Ning Co. In 1989, the former National Sports Committee sports service company's "top ten company sports shoes Co., Ltd." was founded. With more than eight years of experience in shoe product marketing, and the sales manager of Beijing Qianmen shoe factory, Chen Yihong became the first batch of employees recruited by top ten companies.

At that time, the sporting goods industry in China just started, and at that time, Li Ning Co was faced with the predicament of shortage of professionals.

Under the invitation of Lining, in January 1991, Chen Yihong joined the Li Ning Co in charge of the establishment of the footwear industry and became manager, thus starting his 14 year career in Li Ning Co.

In the following time, Chen Yihong successively served as executive deputy general manager of Yantai Lining Shoes Co., Ltd., executive deputy general manager of Lining sporting goods group and general manager of Beijing Lining sporting goods Co., Ltd.

At the last stop, he came to Beijing Group Sports Development Co., Ltd. of Lining group, chairman of the board.

Another important role of China is CEO Qin Dazhong, who joined Lining in Beijing in 1997, but soon became the chief financial officer of Lining, Beijing.

The two people were at the beginning of the founding of Beijing, and did not think that one day Beijing would become a "big guy" with annual sales of over 1 billion yuan.

In fact, the predecessor of China trend (Group) Co., Ltd., founded in the April 2002 Beijing Trend Sports Development Co., Ltd., is almost born for the brand of Kappa.

However, this brand of sportswear, which permeated Italy customs, was not popular in China at the beginning.

Because of its positioning in the high-end "professional sports brand", coupled with its trust in Italy's advanced design philosophy, KAPPA has moved its clothing, shoes and other products to China in its original taste. It is completely European style sports clothes without proper Chinese elements, and has not been recognized by Chinese consumers.

In 2002, the sales revenue of Beijing was about 15 million, which reached 40 million in 2003. But because of the sharp rise in channel costs, the trend is actually in a state of deficit.

The timely operation of "differentiated management" strategy has saved the trend of Beijing.

According to the Chinese character and consumer psychology, they abandoned the "professional sports" (such as Adidas, Nike, Lining) and "leisure" (such as Giordano, Mest Bonwe, bin nu) two brand lines, tailored to create the "sports fashion" this "differentiation strategy", which ultimately saved the trend and changed the brand image of KAPPA in China.

Since then, "differentiation" has become the most frequently used word between Chen Yihong and Qin Dazhong.

Differentiation creates the market's "new favorites". In fact, after we re adjust the market strategy of KAPPA in China, the differentiation has penetrated into all aspects of operation.

Qin Dazhong introduced, "including product development, marketing, production and supply and the entire management platform."

Product design occupies an extremely important part in the center of Qin da.

The KAPPA brand has more than 2000 designs from Italy headquarters every year, and Beijing moves to extract the needed elements and resources from it, and through the two design, it is combined into the products that are finally displayed in front of consumers.

In KAPPA's China Design Center, designers from Korea, Japan and China form a team of 30 people, plus development and technical personnel. The whole R & D team adds up to more than 60 people.

In terms of marketing, the number of KAPPA (China) distributors is very small at present, and there are only more than 50 stable operators.

In Qin Dazhong's view, relative concentration means easier communication and management, and easier for dealers to grow bigger and stronger in specific areas. One of the biggest dealers has more than 100 stores.

"In addition to two distributors in Shanghai and Shenzhen, other regions are dealers."

Qin Dazhong said.

This phenomenon is rare in other sports brand dealers.

Qin Dazhong did not approve of the practice of increasing sales with distributors.

He thinks that when distributors are too few, they can not get enough strength to expand the market. Competition will often lead to deterioration of competition and even price war, and the big client policy can let dealers concentrate on developing the market, which is very beneficial to the image and stable development of a brand.

According to introduction, nowadays, the trend of calling Beijing every day requires a lot of shops, but Qin Dazhong has been trying to control this quantity.

In his view, a brand development has a normal breeding, rapid growth and maturity, this curve should not be a nearly vertical surge.

"Our numbers are very fast. We must control this time.

Our sales revenue increased by three times in 2006. According to the information disclosed, it increased by about 80% in 2007, 90%.

Qin Dazhong said.

The success of market pformation and the huge expansion of demand made the market repercussions surprised them.

Qin Dazhong recalled: "especially in April and May last year, under normal circumstances, the monthly sales are usually 5 million or 10 million, and suddenly jumped to 50 million, which is only the sales quota on our side, and the retail market will be even higher.

At that time, the sales people were very scared. Just like a person whose monthly salary was ten thousand, suddenly became one hundred thousand, he didn't know how to spend it, so did we.

By September, 3 hundred million months in a month, it has gradually adapted. "

After the pformation of KAPPA, the market quickly gave the answer.

Starting from the pformation in 2004, KAPPA has been growing at a rate of over 150% a year, and its profit margin has exceeded the level of the same industry.

In 2005, sales reached 200 million, which surged to 1 billion in 2006. At present, there are more than 1400 KAPPA stores, and the highest annual sales of single stores in China are over 10 million.

The three opportunity is to build capital "feast". If we regard the establishment of differentiated competitive strategy of KAPPA as the right direction of Beijing's trend, breaking away from "Lining" is the first step of Beijing's formal start.

Time goes back to 2005.

At that time, though sales in Beijing were rising steadily, Chen Yihong and Qin Dazhong were worried.

It turned out that at the time when the Lining group set up the Beijing trend, it only wanted to contribute more profits to the Lining group by acting as an international brand.

Since only 5 years of authorized contracts were signed, the short duration of the agency gave Lining a difficult problem: to make more profits for the company and to make KAPPA bigger, he needed to invest resources. But once he is bigger, if Italy reclaims the brand agent and independently develops the Chinese market, it will be equal to helping his opponent to "get married".

This worry and loss mentality led to a very confused trend in Beijing.

Sure enough, when talking about the issue of renewal with the BasicNet group, the parent company of KAPPA brand, BasicNet had a serious disagreement with Li Ning Co, the major shareholder of Beijing.

Perhaps it is because KAPPA is developing too well in China. Maybe BasicNet thinks Lining is a potential competitor. BasicNet was not willing to renew her contract with Lining after the contract expired.

In 2005, the Li Ning Co withdrew in anger. Chen Yihong and his wife, holding 93% of Shanghai's Titan Corp, bought 44 million 814 thousand of's total 80% stake in Beijing and took full control of the trend.

After the tie up of the cooperation system and mode, Beijing moved towards light and fast forward.

At this time, the new sporting goods Kingdom created by Chen Yihong soon attracted the attention of the capital market.

In March 2006, Morgan Stanley, a famous investment bank, invested 38 million US dollars in Beijing's trend, accounting for 20% of the shares.

With the backing of capital, Beijing has acquired the brand ownership and permanent management rights of KAPPA in mainland China and Macao through its subsidiary Singapore company at the cost of tens of millions of euros, from the BasicNet group of Italy listed company.

The trend of Beijing is also pformed into China trend (Group) Limited.

At this point, KAPPA's worldwide sales revenue is around five hundred million, six hundred million euros.

"At that time, BasicNet group just fell into a financial crisis and was short of cash, so we had the opportunity to buy this resource."

Qin Dazhong had a hint of fluke in his tone.

Although it is only a coincidence, it is a good opportunity for Beijing to move forward, so that Beijing moves out of the way different from other agents.

Chen Yihong and Qin Dazhong, who have witnessed Lining's listing, have been deeply impressed by the charisma of the capital market.

With the impetus of Morgan Stanley, China's trend was listed on the main board of Hongkong stock exchange in October 10th.

The agreement on "betting" signed with Morgan Stanley before going public has made Chinese trend more profitable to pursue profits.

According to China's trend sponsor report, China's next year's profit target is US $49 million 700 thousand.

If it fails to achieve this goal, the group's main shareholders should pfer the issued share capital to more than 20% at the symbolic cost of $1.

If the target is 15% lower than the target, the main shareholder will pfer the 17.6% stake to the grand market as at June 29th. On the contrary, the profit of the group will exceed 55 million 900 thousand dollars. The company will pfer 1% of the issued share capital to the other party.

According to the trend of China's current development, this goal should be easy to accomplish.

Similarly, China's 40 billion sports and fashion market, unique mode of movement, Lining's top management team, and the addition of Morgan Stanley's capital have given China a strong allure in the capital market.

This time, China will sell 1 billion 375 million shares to the global market, accounting for 25% of its total share capital, and raise about HK $5 billion 500 million in one move.

In the first day closing price of 5.43 yuan, its total market value reached HK $29 billion 870 million, and 53.32% of Chen Yihong's personal wealth reached HK $13 billion 900 million.

In October 18th, after the exercise of over allotment rights in China, the total share capital increased from 5 billion 500 million shares to 5 billion 677 million 150 thousand shares.

After selling 29 million 100 thousand shares, Morgan Stanley still accounts for 11.29% of its total share capital.

Rough calculation, Da Mo is here.