Local Sports Brand: Is The Domino Effect Coming?

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Just after the Spring Festival, Li Ning Co announced the layoffs to reduce staff costs. The exact number of people has not yet been determined.

According to Li Ning Co's performance forecast, group revenue in 2011 is expected to decline by 6%-7% compared with 2010.

In addition, PEAK, XTEP, 360 degrees, Anta and other domestic sports brands are also facing similar problems.

Reporters learned from Anta, which once surpassed Lining's turnover, that the rising cost and the backlog of sales channels further exacerbated the competition in the domestic sporting goods retail market. The group is expected to face some pressure in the future.

From the expansion track of the domestic sports brand, we can find that with the help of the east wind of the Beijing Olympic Games and a wave of listing in Hong Kong, sufficient capital is even more powerful for enterprises.

According to the statistical analysis of Tan Ke, a Dongxing apparel and apparel industry analyst, the number of new stores in mainland China's sports brand enterprises listed in -2009 in 2007 totaled nearly 2, and the number of terminals increased by nearly 2 times at the end of 2009 compared with the end of 2006.

However, behind the crazy expansion, there are many problems, such as scale growth decline, high market concentration, high inventory and so on. This explains why a number of listed companies have lowered their sales expectations in 2012, and even reduced costs through layoffs.

Li Guangdou, a brand strategy expert, said that the competition of local sports brands changed in 2011, and Anta surpassed Lining in its business income.

"At present, the predicament faced by local brands is that" before they have strong enemies, then there are soldiers pursuing them. "In the case of severe homogenization of products, local brands did not grow well after the Beijing Olympic Games.

What is the way out for domestic sports brands?

According to the industry analysis, sports brand enterprises are facing not only the homogenization competition pressure of the same industry, but also the extrusion of the leisure industry market.

On the one hand, a large number of low-cost local brands, which have the ability to quickly make up and pfer goods, blossom everywhere. On the other hand, ZARA, UNIQLO and other foreign brands bring forth new ideas, all of which create pressure on the local sporting goods industry.

"The Li Ning Co announced that it was only the first Domino to start layoffs, and the layoffs of other sports brands will start."

Shao Ligang, chief consultant of a clothing consultancy company in China, told reporters that 2012 is bound to be a very difficult year for domestic sports brands. Since 2008, the "bomb" planted in the market of sports brand crazy expansion will be detonated one by one, and the cold spring of the sports brand is coming.

The industry generally believes that after the crazy expansion of the local sports brand is now facing a new cycle.

The two giants, Nike and Adidas, which are high premium brands, firmly control the high-end market of domestic sports brands. How to deal with the tendency of "brand foreign consumption" by local brands and break through in the white hot competition pattern is a proposition for enterprises to think about.