Growth Of Jinjiang Shoe Brand After Development Puzzle

For Anta, PEAK, XTEP, 361 degree, Jordan and so on Jinjiang star class shoes enterprise, the native born gene enables them to be like fish in water in the Chinese market, also lets them tread on thin ice.

In Jinjiang, walking into a shoe street is likely to arrive at a village.

In most parts of Jinjiang, the farming population is less than 10%, and over 600 thousand people exist in the shoe making industry chain, with a total output value of more than 60 billion yuan.

The once poor county level city made a fortune at an alarming rate: 14 of the 1000 list of Hurun rich list in 2011 came directly from Jinjiang, almost all related to shoes and clothing. The assets of Ding Shizhong sports [8.31 -1.31%]'s family were as high as 14 billion 500 million, XTEP's Ding Shui Bo assets reached 5 billion, and the assets of the PEAK Xu Jingnan family and the 361 Ding Wu family were 4 billion 500 million and 3 billion 100 million, respectively.

In early March, Ding Shizhong, the 42 year old Anta sports president, took part in the fifth sessions as NPC deputies.

He said that enterprises from "micro" to "small", from "small" to "big", different stages of growth have different worries.

Almost at the same time, Michael Jordan, the legendary basketball legend of the United States, brought Jordan sports to court, accusing the Jinjiang shoe company, which is waiting to be listed, used its name as a registered trademark without authorization.

"Shanzhai" and "rich side" are not a new "annoyance" in Jinjiang.

There are not only "Jordan", but also "Yao Ming", "Kobe" and "ADI king".

After the financial turmoil in 2008, the volume of foreign trade of footwear industry in Jinjiang sharply decreased, and the OEM orders of foreign brands shifted to Burma and Kampuchea. The domestic market was severely overcapacity, and the rise of labor costs and shortage of funds made many shoe factory owners unsustainable.

In two or three years, hundreds of shoe factories have been closed down in Jinjiang.

In terms of wealth alone, the assets of Ding Shizhong family, Ding Shuibo, Xu Jingnan family and Ding Wu family were 21 billion, 8 billion, 6 billion 800 million and 7 billion respectively in 2010.

"Not only is the footwear industry in Jinjiang, but the golden age of the entire manufacturing industry is over."

A more than 10 year old shoe factory boss in Jinjiang cruise sighed.

Cao Shang Road

Ding Zhihao's rich shoes and clothing company has a history of 23 years, and now more than 300 workers are of medium size in Jinjiang.

The village of Chen Dai Town, which is located in Chen Dai Town, is equivalent to a shoe wholesale market.

In addition to finished shoes, there are various shoe materials, such as insole, shoelace, shoe upper and leather, in the shop facing the street.

China's shoe industry center is in Jinjiang, and the center of Jinjiang is in Chai Tai.

Ding Zhihao introduced that at the end of the 70s, there were two small shoe factories on Chen Dai town. Most of them were partners in the village to make a living. Several scissors, several hammers and several sewing machines could start work.

Ding Jiantong, the founder of 361 degree, was the first group of shoes made by Chen Dai. He used to cultivate land, catch fish, help people raise stones to support their families, and 4 children didn't go to school. They were sent to shoe factories as apprentices.

In 1981, Ding Jian raised two thousand yuan, bought tools and raw materials, and together with 4 children, built a small family workshop in his living room, producing 5 pairs of leather shoes a day.

In the words of the local people, there are only a few hundred dollars on hand, and if they dare to start a business, even if they fall down, at least they will fight.

The songs of Southern Fujian "love to fight and win" is to describe them, but Jinjiang is also poor because of its long poverty and lack of resources.

Like Ding Jiantong, shoes manufacturers in Jinjiang almost have the same fortune.

Before and after the 90s of the last century, sports shoes entered the era of "lying and making money", especially for Nike ADI, so that locals saw the money market of sports shoes, and shoes business began to become popular.

Anta founder Ding Shizhong sells ten thousand yuan and 600 pairs of shoes borrowed from his family to Beijing.

Xu Jingnan, PEAK's boss, is planning to build a sports shoe factory with the savings saved by a scooter.

17 year old Ding Shuibo and two sworn brothers invested 500 yuan in partnership and set up shacks on a small river beside Chen Di, producing dozens of pairs of slippers everyday.

Unlike other commercial groups, there were many people living in Southern Fujian during Ming and Qing Dynasties, while Minnan people had a strong sense of native land and made it easier for them to communicate with the outside world, and the information became more open.

The boss of a local lingerie company was the first to know that a woman had to wear a bra because her sister returned home.

He asked his elder sister to take a piece of research and found that it was a good commodity. So he made 50 of them and sold them in the street.

Lv Qinghua, a professor at the Fujian business research center of Huaqiao University, believes that the commercial gene of Fu is planted abroad and sprouted in the country.

Jinjiang's first generation shoemaker entrepreneurs will surely have the smell of grass.

A copycat strategy similar to Jordan's famous trademark for sports is only the tip of the iceberg.

It is also destined that Jinjiang shoe makers need two or even three business ventures, from businessmen to entrepreneurs.

Brand itch

Ding Zhihao took over the family business when he was 15 years old.

"At that time, we read less, some people even do not even write their own names to start the factory. When making a brand, I am still a child, and the market is good, so my vision is not so far away."

The era of "lying in the making money" of the sports shoes industry is also the time when the first batch of famous brands in Jinjiang appeared.

In 1994, Ding Shizhong put up the Anta logo for the first time at the door of his own workshop, becoming the first person to eat crabs.

Then, Ding Jiantong set up Buick Shoes Co., Ltd. (after a collision with Buick automobile trademark, renamed 361 degrees).

Xu Jingnan was puzzling at the question of why Nike and Adi are so expensive and someone else bought them. He patted his thigh and decided to name his shoes "PEAK".

Around 2000, Wu Rongguang founded "Hongxing Erke", and Ding Shuibo founded the "XTEP". Ding Guoxiong integrated a collective unit affiliated to the village committee into "Jordan sports".

Jinjiang's brand strategy was later dubbed "advertising sponsorship + celebrity endorsement + Shanzhai" mode.

In 1997, Anta first landed on CCTV.

Two years later, Kong Linghui was signed as spokesperson for the image.

Later, Jordan Chan, Twins, Nicholas Tse and Battier signed a contract with Jinjiang shoe brand.

In the 2006 World Cup, 25% of CCTV5's advertising came from Jinjiang brand and was ridiculed as "Jinjiang channel".

In 1999, just started Anta signed a contract with Kong Linghui at a cost of 800 thousand, and the cost of advertising on CCTV reached 3 million.

Later, only the sponsorship of the Chinese Basketball League costs 40 million annually.

In 2005, XTEP spent 8 million as a sponsor of the ten Nanjing games. When it was just settled, it was announced that the Japanese sports brand MIZUNO had to bid for 10 million competition.

Ding Shuibo, who has just left Nanjing, returned immediately, referring the price to 15 million and spending 1 million 200 thousand on the franchise.

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"Shanzhai" is another way to open the brand.

On the commercial streets of Quanzhou, you can see a Levi's store like Shanzhai Levi 's, a Amani store in Shanzhai Armani.

"Jordan has been doing this for many years. In fact, everyone is of the same quality. It is a typical shoe manufacturer in Jinjiang. Jordan can see the shadow of a group of Jinjiang shoe companies.

As long as there are Nike, Jinjiang will have PEAK, gold lake, flying gram, Buick, Reebok has XTEP, Hongxing Erke's trademark is also changed from MIZUNO.

A local shoemaker said, "their idea is actually very simple, that is to do publicity. First, we should open up their fame."

There is a popular saying in Quanzhou: "bold ride on a dragon, ride a tiger, ride a cat on a rabbit".

XTEP, who spent 4 million 700 thousand to invite Nicholas Tse to endorse, soon set a record of selling 1 million 200 thousand pairs of single shoe products.

Anta's stores reached more than 2000 in 2004, reaching 4000 after two years.

PEAK, whose total assets are only a few hundred million, hit the advertisement at Yao Ming TOYOTA center in Houston. Sales broke 1 billion in a few years.

Even after changing the name of 361 degrees, the market share has been among the top five in the country.

Lv Qinghua believes that the famous shoe enterprises in Jinjiang can achieve great success in establishing brands. Even if there are hidden dangers of blind money smashing and Shanzhai, after all, there are several well-known shoe companies in China, and a number of excellent entrepreneurs have also emerged.

But as a low-end consumer goods, the initial visibility is easy to digest, and these enterprises are less well-known.

It is the fundamental problem that the product, the service and the image of the enterprise can not match.

"Enterprises have crossed the brand threshold, so they must not stop."

Lu said.

Capital puzzle

Like many traditional business groups in China, Fujian merchants have a tradition of inherit their father's career.

Ding Jiantong's son Ding Wu has fully taken over 361 degrees a few years ago.

In 2000, Xu Jingnan, 45, took the eldest son Xu Zhihua from HUAWEI to PEAK, and PEAK entered the TOYOTA center. It was Xu Zhihua's idea.

"There are hundreds of billions of Companies in Jinjiang, but there are few more.

They have a natural conflict with capital operation, especially for stocks and real estate.

Most people's idea is even at a loss, at least the factory machinery is still there.

A senior executive who made shoes and clothing raw materials business in Jinjiang said.

His assets are close to one billion, but he has never considered listing, because "his own capital is fully operational. Once a listed company is someone else," he said that if he bought land, he would only rent the plant.

Until 2004, Ding Shizhong, who took the lead in listing, still felt that Anta was not short of money. There was no need to bring the company into the capital market, or even resist foreign investors.

Ding Shizhong later said that the listing of Li Ning Co made him realize that if he wanted to go further, he must break the prejudices of family businesses.

In 2007, Anta listed on HKEx at HK $5.28.

Before and after the 2008 Beijing Olympic Games, Jinjiang shoe enterprises entered the capital market one after another. XTEP, 361 degree and PEAK were listed in Hongkong. Hongxing Erke and Xi De Long were listed in Singapore.

In a few years, the listed companies related to footwear industry in Jinjiang rapidly expanded to more than twenty. If not for infringement cases, Jordan sports will also be landing at Shanghai stock exchange this year.

"Sports events must have a pull for the industry, but not so big. It does not belong to the national fitness program. It should be said that the overall business trend of the industry is forcing these enterprises to finance.

Sports shoes and casual wear

By 2010, more than 7000 Anta, PEAK and 361 degree stores have been listed.

"For those of us in the industry, we don't see how many branches they have, whether they are listed companies or not. They only look at capital and performance."

Zhang Wanquan runs foundry factories in Quanzhou, and many of the big brands are his clients.

He said, "if an enterprise has the strength, the word of mouth can be seen." there are many problems in the gold chain of listed footwear companies. Some of them are unwilling to cooperate with OEM, including

"Hongxing Erke in Guangzhou nine stores, one year to run up to spend 4 to 5 million, loss 23 million, open shop first to advertise, you think just rent a day to sell how many pairs of shoes to earn back, the more the market is not good, the more forcing to open more, do not rule out the future some shoe enterprises listing is to cash in cash."

Zhang said.

In early 2011, Hongxing Erke was suspended by the Singapore stock exchange because of its financial problems. It became the first failure case of Jinjiang shoe enterprises under capital operation.

Jinjiang style turn

Ding Zhizhong complained in Beijing: "the growth of national brands and international brands compete with each other when they are in a dilemma, and the shopping mall channel is worshipping foreigners, so that the domestic shoe and clothing enterprises represented by Anta feel an unfair situation."

Xu Jingnan is calling for the importance of building an international brand and developing the international market.

Hongxing Erke of financial crisis has directly reduced the investment of physical stores and turned its attention to network sales.

Ding Shuibo moved XTEP headquarters to Xiamen, believing that it is closer to international talent and market.

In 2010,

Tan Ke, an analyst with Dongxing's textile and garment industry, believes that the convergence of Jinjiang brand positioning and operation mode has led to their respective lack of characteristics, and the ability of enterprises to differ little.

The enterprises in the early stage are familiar with the way of success of the leading enterprises, so long as they can grasp the growth opportunities of the industry, they can catch up quickly.

When the industry enters the adjustment period, the competition pattern is solidified, which makes it difficult for these brands to produce a real breakout.

From the opening workshop, brand building to listing and internationalization, Jinjiang shoe enterprises almost all completed in the same period, but the imitation between enterprises did not enhance the communication between owners.

"Basically, there is not much interaction between Jinjiang enterprises, there is neither favor nor hatred, unlike Zhejiang companies.

Jinjiang enterprises are doing their own things. They are alone in their respective positions, and no one can afford them.

A Jinjiang businessman who has been engaged in shoe industry for many years said.

Liu Mingyong, an executive who has been listed as a shoe maker in Jinjiang, said that as a family business, many bosses already have the sense of introducing foreign managers.

"But not completely, the managers' living conditions are not very optimistic. The cycle of survival is relatively short, and they can not be dealt with in the enterprise, involving the issue of authorization, trust, regional culture, and the concept of an entrepreneur."

After Ding Jiantong became an enterprise, he still kept on going to the shoe material market personally.

A shoe business owner said with great interest: "maybe only when the tide goes out, do we know who wears clothes and who is naked."