Chinese Footwear Industry: Control The Terminal To Survive

After buying 380 million yuan in August and buying 600 million yuan in October, BELLE group recently launched two rounds of investment to invest about 2 billion 200 million yuan in Jiangsu's famous shoe brand, Fila.

This is also the third industry mergers and acquisitions since BELLE International launched in May this year.

Prior to that, Sanger had the title of the king of men's shoes. Decades of painstaking brands changed the flag, and all the channels and assets of Sanger were BELLE, and BELLE, known as the name of women's shoes, finally completed the combination of two swords.

Through this acquisition, BELLE not only increased the layout of the domestic footwear industry, but also became the leader of domestic men's shoes.

At the same time, the calm surface of China's footwear market began to flow.

Insiders predict that BELLE's ambition should not only be the king of women's shoes, but also the king of shoe industry.

This will push shoe industry resources to the dominant enterprises.

The domestic shoe industry will achieve a large-scale reshuffle in 3 to 5 years.

In May 23rd this year, the Belle International Holdings Ltd launched its listing in Hongkong in May 23rd.

This day, according to the closing price of the day, its total market value reached HK $67 billion, far exceeding the Gome value of HK $38 billion, and became the mainland's retail market capitalization of HKEx in one fell swoop.

Since 1981, the founder and chairman of BELLE international Deng Yao founded Li Hua Shoes Co., Ltd. in Shenzhen, BELLE has developed from footwear manufacturing, and from the retail channel, and gradually expanded to many brands. In the 16 years since its coming, BELLE has got rid of the plight of Chinese traditional manufacturing industry and has become the representative of new manufacturing.

In fact, at the beginning of entrepreneurship, BELLE chairman Deng Yao and CEO Sheng Bai pepper had a strong sense of brand.

They believe that leather shoes must sell well at a good price.

This brand awareness runs through the whole development process of BELLE, making it intentionally break away from OEM's manufacturing route from the very beginning and lay a high starting point with its brand.

In 2000, BELLE began to develop multi brand strategy, and then launched more and more brands.

At present, BELLE international has 2 licensed brands: BELLE, Teenmix, Staccato, other 6 brands, such as TATA, Jipijapa, and Bata.

In addition, BELLE international is also a distributor of Nike, Adidas, Reebok, Puma, Kappa, Mizuno, Levis and other sports casual wear brands.

According to statistics compiled by China industry and enterprise information publishing center (CIIIC), BELLE has become the number one brand in China's women's wear shoes for 10 consecutive years in terms of sales revenue.

In last year's sales of the top 10 Chinese women's shoes, BELLE, BELLE, Teenmix, Staccato and so on, occupied 4 seats, of which BELLE ranked first.

May 23rd is also a watershed. It has changed the history of China's footwear industry.

Wang Zhentao, President of AOKANG group, said to everyone.

The listing of BELLE international in HKEx has stimulated the nerves of almost all shoe companies in China.

Wenzhou's shoe industry has never been on the market and has become stubborn. Wang Zhentao will soon contact 5 of his more than 20 investment banks.

Qian Jinbo, chairman of the Red Dragonfly Group Limited company in Wenzhou, said BELLE is the learning object of red dragonfly.

In September of this year, the Limited by Share Ltd of the dragonfly started listing.

In BELLE's home town of Guangdong, Foshan footwear Limited by Share Ltd on Saturday won Lenovo's venture capital investment in March this year, and is also ready to go public next year.

As the largest footwear producer and exporter in the world, there are more than 20 thousand shoe making enterprises in China. Shoes account for more than 60% of the world's total output. Last year, we produced about 10000000000 pairs of shoes and 7 billion 800 million pairs of export shoes.

Behind such a large capacity, it is a product with lower grade and lower unit price.

Footwear companies represented by brands such as AOKANG, red dragonfly and Foshan Saturday started building brand as early as the 90s of last century. Now they are facing a climbing period.

It means that BELLE will have a market share of more than 20% after the big acquisition of San da.

And BELLE's big acquisitions and rapid development come from its huge capital after its capital operation.

As early as 2005, BELLE introduced two fund companies of Morgan Stanley and CDHRetailLimited of CDH investment as strategic investors.

After these capital injection, BELLE has gained a fast rising channel.

In fact, the acquisition of San Da also considered increasing efforts to expand the men's shoes, our men's shoes on the FATO brand, and 50% of the men's shoes.

BELLE relevant responsible person told reporters.

BELLE international has BELLE, Teenmix, Staccato and other 8 footwear brand chain stores, Nike and Adidas are the largest sports shoe distributors in China.

According to public information, at present, BELLE international has more than 2800 female shoe shops and more than 1000 sports shoes chain stores in 150 cities in the mainland, and has set up 35 retail stores in Hongkong, Macao and the United States.

Whether it's BELLE's listing or frequent acquisitions, it's easy for insiders to see that BELLE's sword is actually a channel.

According to industry analysts, BELLE international has been hoping to expand its product line, and it takes a long time to start from scratch. BELLE International hopes to achieve its goal through faster acquisitions.

Experts believe that from the nature of BELLE's acquisition of international assets, its strategy should be based on three considerations.

First, the acquisition of BELLE international is more and more centered on retail strategy.

In some shopping malls, BELLE international sporting goods retail has started sports layer sales, that is, when the new mall opens, it can take a floor to make sporting goods, and if women shoes reach a certain quantity, it can also be carried out in this way.

Second, the BELLE International Men's shoes for deep ploughing women's shoes are few and look forward to entering the men's shoes market through acquisitions.

Third, BELLE International hopes to use the production base of Hubei in Shenzhen. BELLE international, which has 3 production bases in China, hopes to expand its production base to the mainland.

AOKANG built a shoe base in Chongqing, attracting many footwear enterprises to enter.

BELLE international chose to have more cost advantages in manpower and power resources near the Three Gorges.

Self run and department stores are the key words of BELLE channel.

Self operated outlets can bring back things that consumers are dissatisfied with.

And stationed in department stores, BELLE has brought an endless stream of people.

Statistics show that by the year December 31, 2006, BELLE's sales in department stores accounted for 74.3% of total sales.

The channels that blossom everywhere also bring a new profit growth point for BELLE.

In 2006, BELLE became the largest agent of Nike and Adidas in China.

In addition, BELLE also represented Lining, Reebok, Kappa and other sports leisure brands.

None of these sports and leisure brands are BELLE outlets.

The coming of the era of integration represents the failure of China's footwear industry to represent the era of China's footwear industry. A group of traditional family enterprises are being replaced by new capital operation enterprises. Now the pattern has evolved from the separation of the male and the female to the BELLE.

A senior rival in the past said with great emotion.

In the past, we did not have much difference from BELLE. Now we are far behind.

Wenzhou local shoe enterprise chief said.

He believes that after the listing, BELLE not only has sufficient cash flow, but also through the process of quality asset restructuring before listing, the management of enterprises has been standardized to a great extent, and more importantly, BELLE has also stood on the international stage.

It is worth mentioning that, starting with BELLE, China's shoe industry pattern is also divided into two schools, one is the family enterprise represented by Kangnai, Sanger and AOKANG. These enterprises have prospered since the end of the last century in 80s with strong family resources and improved channels, while the other group was a capital operated enterprise led by BELLE, 1000 Baidu, Daphne and so on.

A Wenzhou shoe company official told reporters that the decline of the old style enterprises is not only one of the companies, but also many enterprises like the company.

When it is not strong enough, it has invested in clothing and power generation industries to widen its fronts.

In addition, new product development and production and marketing disconnect, almost no design team, and sales have been using the last century, the supply and marketing personnel in 80s.

This caused the domestic market to be divided into food, and the foreign market could not open up the situation. The decline was sooner or later.

On the other hand, BELLE said it was not clear whether the company would continue to take over before the end of the year.

In 2008, the company plans to integrate Fila, Mie Li, and its inferior footwear assets and brands into BELLE management mode.

At the same time, BELLE's boom has brought a lot of impact to many Wenzhou shoe companies, which are known as shoes.

At present, BELLE international owns 8 footwear brands, such as BELLE, Teenmix, Staccato, real beauty, and so on. It has acquired 3 famous brands, and the famous brand has reached 12.

This has brought unprecedented shock to Wenzhou shoe enterprises, and the brunt of its impact is AOKANG, Kangnai, red dragonfly and other well-known shoe enterprises.

How to pack up the tiger in Wenzhou shoe industry will cause Wenzhou shoe industry to ponder.

However, everything has two sides. The listing of BELLE's shoe carrier and the acquisition of Sunda brings Wenzhou shoe enterprises not only a tough competition environment, but also a hope. Wenzhou shoe bosses have realized that only by making use of the capital operation of the listing society can enterprises grow and strengthen, so that they can continue to survive in the market.

It is understood that due to the impact of BELLE, AOKANG accelerated the pace of listing, its listing advanced to 2008.

AOKANG plans to officially list in Hongkong on August 8, 2008 when the company was founded 20th anniversary.

Several other shoe companies in Wenzhou are also actively seeking listing.

BELLE already has a mature model, and BELLE's integration of acquisition brands can be completed in 2 to 3 years.

Experts said that the era of footwear integration has arrived. For many shoe enterprises, the most important thing now is to integrate with capital, jump out of channel marketing to do chain business, and control the terminal is the best choice to survive.