The Nirvana Metamorphosis Of Cave Shoes Crocs

From April, Shanghai Zhengda square

The flagship store has ushered in a group of new members, Crocs casual wear. They are light, waterproof and colorful, and can be folded into a small bag, which fully accords with the characteristics of Crocs's leisure, comfort and fun.

Crocs was founded in 2002 because "

Overnight.

This pair of shoes that are teasing "ugly shoes" not only overturn the definition of beauty in the fashion industry, but also sold 100 million pairs in 7 years, and raised 200 million dollars in 2006, which is also the largest IPO in shoe industry.

Crocs, which is nourishing by the capital market, has embarked on the road of diversification like other enterprises. The product category of Crocs has gradually expanded from the first pair of "ugly shoes" to cloth shoes, leather shoes, high-heeled shoes, and even clothing and accessories.

Last year, Crocs sales exceeded $1 billion, which took 22 years to achieve Nike.

For Crocs, the performance of US $1 billion is not only a miracle, but also a metamorphosis of how Phoenix is nirvana.

Redemption

In 2002, Crocs launched the first Beach antiskid and non decolorizing outdoor sports shoes. The plastic shoes with round head and vents and breathable holes were the "ugly shoes" that were famous all over the world.

Then, miraculously, "ugly shoes" became popular all over the world in the form of "all functional fashion shoes". At the same time, they were out of stock because of panic buying.

In the following years, Crocs developed smoothly and was successfully launched in the US in 2006.

The 200 million dollar financing Crocs not only expanded the sales network to more than 80 countries in the world, but also took the road of extensive expansion in 2007, successively acquiring the Jibbitz of Crocs shoe production ornaments, the shoe maker Ocean Minded and the predecessor of the Italian company Samantha Bryan (the high heel brand "You By Crocs").

In fact, the success of "ugly shoes" originates from a special resin material called Croslite. This material is the research achievement of Dow chemistry, but Dow did not value its value, but sold it to a company named

Canadian shoe making company.

Later, Crocs bought the Canada Company for $5 million, thus creating a business myth.

Just as Crocs became popular, problems began to emerge.

On the one hand, because Croslite material is very wearable, the life of a pair of "ugly shoes" can last up to ten years, which greatly reduces the desire of buyers to reconsume. On the other hand, a large number of "Shanzhai shoes" appear on the market. They not only take away the market share of Crocs, but also make the whole consumer market rapidly saturated in a short period.

"The original company's products are these big headed shoes, and the profits of the company are basically derived from these shoes. The changes in the market require us to make some changes. We can't rely on these shoes alone."

Crocs China operations director Lingjie said.

When Ling Jie joined the Crocs, it was in the troubled times of the company.

At that time, the financial tsunami swept the world, the single shoe Crocs products appeared unmarketable, inventory was overloaded, in 2007, the sweeping mergers and acquisitions also gave the enterprises a heavy burden.

Public results showed that in 2008, Crocs recorded a net loss of $185 million 100 thousand and a diluted loss of $2.24 per share. In the year, the company laid off 2000 people and its share price also dropped 76%.

"When the environment is bad, the first thing we think of is to save money and survive. In fact, we should not only swim but also know which way to swim."

Crocs China CEO Li Tun said.

Crocs needs a big change, but where does this knife move? How does it move?

Ugly shoes are ugly.

Fortunately, Crocs, after being baptized by the financial crisis, does not have the conditions of cross industry diversification objectively, so Crocs has chosen the most secure and least investment way -- the pformation of ugly shoes.

In addition to preserving the classic big hole shoes, Crocs has also developed a large number of fashionable shoes that are close to the public style with Croslite material. The frequency of new products has been improved, from dozens to tens of quarters per quarter, and now to more than 300, ugly shoes are no longer ugly.

In the process of upgrading ugly shoes, Crocs also started the product expansion article.

Take the Chinese market as an example, Crocs has launched a series of brands such as Ocean Minded, You By Crocs, Crocs Golf, Crocs Work Shoes and so on. The product category has gradually expanded from the original "ugly shoes" to canvas shoes, leather shoes, golf shoes and high-heeled shoes. Now it is expanding into the field of socks, clothing, sunglasses and accessories, and achieves full coverage from head to toe products.

The global market of Crocs is roughly divided into European, American and Asian markets. Managers in different regions can decide which fields to enter according to their specific development.

Clothing, for example, was launched in October last year in Crocs, but the Chinese market did not start selling until April this year.

Ling Jie said that the new products in the Chinese market were late because Crocs had always focused on "comfort" in China, and consumers only knew about cave shoes, but did not know Crocs, so there was no large-scale promotion of new footwear such as high-heeled shoes.

Now we all know Crocs, and diversified products are beginning to be accepted by Chinese consumers, so high heels are introduced at this point.

"If you jump from high end shoes to high heels, the customers of high-heeled shoes will not usually come to our store for consumption. This is a slow process."

At present, sales of Crocs casual cloth shoes have surpassed traditional rubber shoes and become the largest sales category of Crocs.

In April this year, Crocs launched children's clothing in 46 countries across the world through wholesale and retail channels. In May, sunglasses and accessories from King Eye will also be listed in the United States and Canada.

According to the financial report, sales of accessories and clothing products launched in the US market in 2011 accounted for 3.7% of the total turnover of the company.

Adversity leads to "

The trend of fashion has also brought joy to Crocs. Public revenue shows that in 2011, the income of Crocs rose from $789 million 700 thousand in 2010 to $1 billion in 2010, while the net profit in 2011 rose from $67 million 700 thousand last year to 112 million 800 thousand US dollars; gross profit was 536 million 400 thousand US dollars, accounting for 53.6% of sales.

Pluralism debate

In China, there has been an endless stream of trials of water diversification in recent years.

The price of pork rose sharply last year, attracting a large number of laymen to join the pig industry. Even NetEase and Wuhan Iron and steel enterprises, which were originally different from each other, came in.

At the Chengdu sugar and Wine Fair in March, Lenovo was blown out in Guizhou.

In fact, the fact that Lenovo sold wine has long been a nail in the face. In the past year, Lenovo has acquired Hunan Wuling liquor industry, Hebei Qianlong drunk liquor industry and Anhui catering industry.

Building a liquor Empire has been another heavy blow after its IT, investment, real estate and other fields.

These enterprises have different starting points for diversification, some are helpless for the main industry to slow down, others are speculative mentality, others are hedge risk needs.

For the proposition of diversification, according to Michael Porter's research, if the diversification based on the association of business units is most likely to enhance the competitive advantage of enterprises in the existing industry, or form a sustainable competitive advantage in the new industry.

That is to say, the degree of diversification is high and the success rate is high. Conversely, the low degree of correlation is easy to become the burden of enterprises.

Therefore, "Haier makes children's clothing" and "Wuhan Iron and steel pig raising" are more like these enterprises' "playing tickets".

By contrast, the diversification of Crocs is much more conservative. Even Crocs's attitude towards sub brands has been handled with great care.

As part of Crocs, the company does not specifically promote the concept of "tune brand", but only when individual products aim at different consumer groups, will it be pushed into a sub brand.

"We do not want to have no sub brands. At that time, the introduction of Ocean Minded and You by Crocs was mainly due to its complementarity with Crocs products, and the supplement of the product line. However, as a sub brand, it has a very high demand for product category and product line, and it can not be presented as an independent brand at present."

In Li Tun's view, Crocs product label is "leisure, comfort and fun". This is the DNA of Crocs brand, and the only standard of product expansion. "The products we develop will continue such DNA, which is a road we have to take."