The International Brand Attacks The Two Or Three Line Market, The Local Sportswear Brand Is Facing The Survival Of The Fittest.

When the Lantern Festival started on Friday, the "old street" in East Gate of Shenzhen was bustling. The sporting goods shop in the pedestrian area began to cry for help. Despite the dazzling shop signs such as Anta, PEAK and PEAK,

The shop assistants shouted "buy one get one", and it seemed impossible to stop the shopping crowd.

The cold shops in front of the shop are just like the bustling crowd outside, just like the plight of China's sports industry -- intensive competition in shops, and a discounted discount war. After four years of rapid expansion through the Olympic Games in Beijing, China's local sports brands are suffering from excessive expansion.

But that's not the trouble. With international brands such as Nike,

If we want to rush into the two or three line cities that mainland brands are best at, the competition for mainland brands to stay strong and weak will also start. It is expected that small and medium-sized brands will face greater challenges.

Li Hongxian, an analyst at Beijing, pointed out that the local brand income 60-70% comes from two or three line cities and the product is in the middle price. As the two or three line city consumable, Nike and ADIS set up more storefront and medium price products to make local brands less easy to digest inventory, especially small and medium brands with weak product innovation ability.

"If the price is almost the same, international brands must be more attractive," Li Hongxian said. "Now there are more local brands. The entry of high-end brands will accelerate the process of survival of the fittest, and the degree of brand concentration will be higher and higher.

"

She expects that in the elimination campaign of the local sports brand, the current 1 or 20 brands will be concentrated to five to six.

Zhou Xiucheng, a researcher at the Hong Kong rich group, said: "obviously, the market share of local brands is losing, and foreign brands are increasing. Consumers' purchasing power is enhanced, giving local brands a head-on blow.

"

In 2011, Nike accounted for 10.50% of China's market share, ranking first in terms of turnover, according to Research In China, a consultancy, followed by Adidas, Lining and Anta.

Market size and market share of sports brand in China

* demand for integration is gradually emerging.

The theme of the Beijing Olympic Games in 2008 and the promotional activities after a wave of events led Chinese local brands to grow rapidly in the five rings. However, over expansion of distribution networks, high homogeneity of products and tight macroeconomic environment made the sports brand industry grow weaker in early 2011, but in the middle of last year, Lining, the industry leader, took the lead in cleaning up stocks and made the industry problems on the table.

"Before and after the Beijing Olympics, the expansion is too fast," said an industry insider who declined to be named. "We are competing to open stores. The brand is constantly plugs goods to distributors, creating beautiful business growth figures.

"

He pointed out that since last year's macroeconomic regulation and control has made some distributors tight, forcing brands to ease the pressure of distributors by repurchasing or extending the days of accounts receivable, which has caused some small and medium businesses to face financial challenges.

The annual market share of the sixth largest market in March showed that the annual accounts receivable increased by more than 80% over the same period last year, making the market unexpected. The company immediately announced the issuance of convertible bonds of 150 million dollars to raise the "development and working capital" of the company, and the share price went down all the way. At the close of Friday, the value of the shares fell to HK $1.73, and the share price fell more than 40% so far this year.

According to market analysts, China's sports industry expanded by over 30% in the 2007 and 2008 years, and has slowed to about 16%. in 2011. Retailers continue to clean up their inventory. Some analysts have estimated that the overall industry may only grow in unit size this year.

Zhou Xiucheng of Hui Fu believes that the integration of distribution networks, including slowing down the opening of new stores and closing inefficient branches, is the first step in the industry consolidation, followed by the integration of brands.

"Small and medium sized brands may become targets of acquisitions," he said. "Listed companies generally have better financial capabilities. If they are complementary in overall efficiency, product mix or geographical location, they will consider acquiring smaller networks or brands.

"

In an interview with Reuters, Ding Shuibo, President of XTEP international, with a large "X" as a brand symbol, also said, "with the development of the industry, big fish eat small fish, the long-term development must be like this." however, he expects that there will be no big brand consolidation in three years.

At the same time, agents such as Nike.

BELLE international has planned to buy a Big Step which sells mainly Nike, Adidas and other sports brand products in the mainland for 880 million yuan.

According to the annual report, China's top five local brands reached 39116 in 2011, up 39% from 28202 in 2008.

* inventory is still not optimistic in the first half of next year.

PEAK sports in a store in Shenzhen is covered with "29-69 yuan" promotional cloth. Young salesmen are struggling to introduce a discount sportswear to visitors. "This is only 59 yuan (RMB), which turned out to be 138 yuan.

"

This is equivalent to 43% of the original price, although the discount seems to be more favorable than that of Anta's "buy one get one", but it doesn't seem to attract more attention.

At the end of the first half of the year, he asked the salesperson which season's sportswear it was, and he replied, "this is last year... This year's new product will come out in a week or 6.

"

Haitong Securities analyst Wang Jingwen said that the current local brand inventory war has not been eased. "The ratio of inventory to sales ratio (stock to sale ratio) is three to four months normal. We went to see Lining in nine months, which is to clear the inventory a year ago.

"

Although XTEP President Ding Shuibo is optimistic, inventory problems are expected to be resolved by the end of the year. However, analysts and industry figures believe that the situation is not optimistic until the first half of next year.

JP Morgan analyst Yang Lei said in the report, "in the next 6 to 12 months, the industry still has to face the severe challenge of cleaning up inventory. According to the experience of international brands in 2008/09, it took 12-18 months for them to return to normal levels.

"

Wang Jingwen believes that before the inventory of big brands such as Lining and China moves (3818.HK: quotes), "other brands can't get rid of such a mess.

"

Two weeks ago, the Lining announcement was weak in the four quarter, the total double-digit percentage decline in total orders and the significant increase in the cost of promotion in the next few years. The net profit in the first half of 2012 and in the whole year will decline considerably.

* London Olympic participation is not enough.

Last month, Lining, the gymnast prince, finished the Olympic flame in Athens's pennunnac stadium, wearing a white sportswear. It indicates that the 2012 London Olympic Games will be in the countdown. However, compared to the 2008 Olympic Games in Beijing, the Chinese sports industry has brought about rapid growth.

Umang Pabaru, director of business development at greater China, Nelson, a market research firm, told Reuters that London's time lag with Beijing and its home effects are no longer enough. Local consumers' attention to London July will not be comparable to that of Beijing's Nielsen.

"The Beijing Olympic Games are held at home, and the sense of participation is different from that of London Olympic Games.

"He said through the phone.

People including Lining and Yu Yuan industries, who help Nike OEM, also say that London Olympic Games can hardly bring great stimulation to sporting goods.

According to Research In China, the market for sporting goods in China last year was 124 billion 700 million yuan, up 35% from 16.32% in the previous year, 2007 and 2008.

However, analysts also believe that the Chinese market is still large, and there is no need to be too pessimistic about the industry. In the face of more challenges, local brands need to strengthen R & D and innovation capabilities or focus on the development of special sports products.

A recent study by China Market Research (CMR), a Shanghai based consultancy, shows that Chinese consumers believe that local brands are relatively weak in terms of design, R & D and technology.

CMR senior analyst James Roy said, "there is still room for local brands, because not all people can afford international brands. They want to compete for who can provide better value, better style, better technology, and products for specific projects.

"

When asked about how to cope with the challenges of international brands and big cities, Lining CEO Zhang Zhiyong said, "in the short term, we will attach great importance to Lining's mainstream market and accumulate their status first in places where they do not compete. In the long run, they are still seeking their own brand positioning and innovation.

"