Domestic Sports Brands Are In The Bottleneck Stage &Nbsp. Is London Olympic Games An Opportunity Or A Challenge?

In March 13th, PEAK sports announced its annual report in 2011, saying that the net profit for the year ended 2011 was 778 million yuan, down 5.4% from 822 million yuan in the same period in 2010.

Up to now, the five major sports brands in China, Anta, 31st degree, PEAK, have announced last year's performance. Lining also made a notice on 2011's performance, and XTEP's annual report has not yet been released.

Anta leads the industry

In March 12th, 31st degree released the performance report from July 1, 2011 to December 31st. According to the previous report, its turnover in 2011 was 5 billion 570 million yuan, an increase of 14% compared to 4 billion 850 million yuan in 2010's annual income, while the net profit in 2011 has reached 1 billion 133 million yuan, which is 15% higher than that in the whole year's net profit of 983 million yuan.

Prior to this, Anta also released its annual performance in 2011. In 2011, its turnover increased by 20.2% to 8 billion 900 million yuan, and gross profit increased by 18.7%, achieving a net profit of 1 billion 730 million yuan.

Lining expects income in 2011 to drop by about 6% - 7%, about 8 billion 800 million yuan, and gross margin is about 1 - 1.5 percentage points lower than that in 2010.

By analyzing and comparing the annual reports of several companies, we can find that income has risen or fallen, and the sports goods market has entered a low growth state.

Xiong Xiaokun, a light industry researcher at CIC, analyzed the overall performance of several major sports brands in China. However, it can be seen that the growth rate has slowed down, and the profit margins of various brands have been reduced. So far, the domestic sports brands still last year's development status, and their performance is not outstanding.

Since last year, domestic sports goods industry has been overstock and other issues, which has become a bottleneck for the development of the industry.

The reason why domestic sports brands are deeply in the bottleneck stage:

First of all, in recent years, the development of footwear and apparel industry in China has been expanding too fast. In addition, the overestimation of the prospects during the Beijing Olympics has led to a backlog of large inventories of retailers, affecting the development of Companies in the latter stage.

Secondly, under the domestic inflation environment, consumers have the tendency to reduce the consumption of sporting goods. For example, the top 6 sports companies listed in Hongkong have nearly 5 branches in the country, and the supply exceeds demand. The bias increases the stock pressure and directly leads to the decline of performance.

Thirdly, the degree of subdivision of domestic brand consumption is not enough. Many domestic brands are not clearly positioned, leading to a serious homogenization of the sports goods market. A clear positioning is the focus that sports companies need to pay attention to.

Finally, the sporting goods industry suffered the roller coaster market price of cotton and other raw materials in 2011.

The drop in performance falls, and the challenge of London Olympic marketing is great.

In 2012, the thirtieth Olympic Games will be held in London. At the same time, it means a new round of Olympic marketing.

Is the London Olympic Games an opportunity or a challenge for the sports shoes that are famous for sports marketing?

Although the advertising threshold of Olympic Games is getting higher and higher, but as the best marketing stage in the world, it has always been the object of big companies scrambling to enter its sponsors.

For those domestic enterprises whose legends are "midlife crisis", those enterprises that are in the process of adjustment must take a good look at whether the London Olympic Games are "fragrant meat and potatoes" or "hot potato".

Dacheng Fund Manager Ran Linghao said: "in this year's London Olympic Games publicity, domestic

Lesson: 70% enterprises without post Olympic effect

Olympic marketing is hard to grasp. It is both an opportunity and a challenge. In the past, many cases have proved that many enterprises will be outweighed by the gains and losses.

The 2008 Olympic marketing report released by the China Brand Research Institute shows that many Beijing Olympic sponsors' brand reputation has not been upgraded to the proper level and it is difficult to recover their investment.

Among them, 14 companies such as UPS, Adidas, McDonald's and Samsung have increased their brand reputation by 44.37~23.53%, and their Olympic marketing results are only slightly better than conventional marketing methods.

The effectiveness of the 30 companies is far less than that of conventional marketing.

Air China and Heng Yuan Xiang's brand reputation increased even negative.

After the closing of the Olympic Games, will the effect of the Olympic Games continue? The Chinese Brand Research Institute answered the question with a statistics.

According to statistics, after the official commercialization of the 1984 Olympic Games, up to 2004, less than 30% of the 144 Olympic cooperation partners made profits in the Olympic Games, and the profit process continued for some time as the Olympic Games ended.

But at the end of the Olympic Games or even the end of the Olympic Games, the remaining 70% of the enterprises can not see the benefits brought about by the Olympic marketing, which basically can not enjoy the impact of the post Olympic Games.

Therefore, it is a difficult challenge to enhance the brand value of the domestic shoe and clothing sports brand which is not mature in the whole industry.

Positive response to London Olympic Games

ChinaVenture Vanguard Group analyst Wan Ge told reporters that the current domestic sports apparel industry market has reached a certain degree of saturation, strong competition among enterprises, domestic sports brand enterprises mainly face two problems of high inventory and capital turnover.

"Inventory can be divided into three aspects: stock of raw materials, inventory not sold in the previous quarter, and inventory of products not listed."

Vanguard analysis said that the stock of raw materials and unlisted products may affect the turnover of enterprise capital and affect the scale of expansion.

Xiong Xiaokun, a consultant at CIC, told reporters that the sporting goods industry has made an erroneous prediction of the industry's trend and raised the price of its products, coupled with a lack of downstream consumption power, which has exacerbated its inventory pressure.

Vogg said that by adjusting the proportion of Direct stores and franchisees, it can solve the inventory problem of enterprises, and enterprises should pay attention to product comfort design and other issues.

Xiong Xiaokun believes that sports products enterprises must enhance their product competitiveness and stimulate consumer demand is the key. Domestic brands need to be clearly positioned, and the connotation of sports products should be further explored, weakening the trend of homogenization, accelerating pformation and upgrading their brand competitiveness.

This year's London Olympic Games will be a platform for brand promotion of sports goods companies in China.

At present, the brand of sporting goods is still dominated by Adidas and Nike, which mainly focus on high-end consumer market. Its dominant position is difficult to shake in the short term. The two or three line brand is mainly targeted at the low-end consumer market. Domestic brands mainly include XTEP, Anta and so on. The distinction between brands is not large, homogenization is more serious, and the competition among brands is more intense.

Benefiting from the driving factors of London Olympic Games, the sales of domestic sporting goods brands will rise in 2012, and many sports brands will take the advantage of this positive factor to complete the pformation process.