China'S Footwear Chain Monopoly Goes To The Turning Point

2008 is a very unusual year for China's footwear industry. With the listing and financing of some enterprises, the implementation of merger plans, the intensification of anti-dumping and the increase of labor costs in the new labor contract law, the advantages of low cost manufacturing in China's footwear industry are no longer in existence, and the profit margins of retail terminals are getting smaller and smaller. At the same time, China's footwear industry chain monopoly mode has also quietly gone through 20 years, the mode has developed matured, but the enterprises are "struggling to cope" in the price war, promotion war and advertising war. "Sales increase, profits decrease!" In the face of global competition, the shoe industry's retail mode seems to have come to a new turning point. At this point, the brand new concept of "shoe industry supermarket" has sprung up in the industry. Big brands such as red dragonfly and AOKANG are trying to sell supermarket in water. Does this mean that the industry channel is coming? Chain monopolization has come to the turning point for a long time. "Channel is king" and "winning the battle terminal" are familiar with the shoe industry marketers. In the 90s of last century, marketing agents such as franchised agents and chain monopolies rose rapidly and quickly became the weapon of the shoe industry. But recently, an increasing number of shoe marketing insiders feel that "the advantage of chain monopolization is no longer there." In the domestic market, Wenzhou shoes can best represent the overall appearance of China's footwear industry. In November 1998, AOKANG founded the first shoe store in Wenzhou. Since then, "Monopoly chain" has been popular in the footwear industry of Wenzhou. Some large and medium-sized shoe companies have followed suit. At that time, the number of shoe stores opened at the end of the store has become a standard to measure its brand strength. In 2001, the shoe store of Wenzhou reached 3 at its peak. However, more and more franchised stores, the effectiveness of enterprises is not necessarily proportional to the number of stores. In fact, because of the simplification and reproducible nature of chain franchised products, not only many big brands have shifted from shopping malls to chain stores, but even three or four line brands have launched chain stores. As a result, the shoe industry is also facing the problem of homogenization of products and the increasingly smaller differentiation between products and products, between brands and brands, and increasingly becoming a sales channel. According to market researchers, a large shoe manufacturer in Wenzhou has closed 1/3 of its stores in 2003. Some of the more successful brand stores have begun selling some kinds of miscellaneous leather shoes to maintain their livelihoods. Now this trend is becoming more and more intense. In addition to facing reality, enterprises have to start exploring new ways to transform channels. Shoe industry supermarket quietly sprung up in 2007. AOKANG group opened in the largest shoe store in Heze, Shandong, with an area of 2300 square meters, and business has been booming. In February 23rd this year, the largest footwear store in Wenzhou, AOKANG limingpin space shoe store, was launched. Its business area is more than 1000 square meters. AOKANG, Kanglong, beautiful beauty, red Firebird, wanwade 5 footwear brand products and AOKANG leather products all appear in the same store. If AOKANG's shoe industry supermarket is characterized by absorbing only its own big brands including GEOX, then the "supermarket flavor" of the "Hui Lima" shoe supermarket launched by the red dragonfly is even stronger. "Hui Lima" focuses on building the brand property rights of "Hui Lima". It absorbs several brands of red dragonfly, "hot", "Jie road" and "Red Dragonfly shoes", while absorbing the Red Dragonfly's own brand names. It also takes the whole industry to absorb the brand names of high-end and well-known brands, and integrates the market of other medium-sized brand shoes enterprises at the same time. 。 Obviously, this is not the concept of franchised stores, but rather a multi brand "supermarket" form. As a matter of fact, the rise of shoe industry supermarkets has attracted the attention of the industry. The 100 letter shoe industry in Tianjin has been eating all the brand shoes at that time. If it is not because of poor internal management, the hundred letters will surely be the biggest "oligarch" in the shoe sales market. Following the hundred letters, the prince shoe city of Hubei emerged in the Hubei market, and its sales ability is second to none. Another 3 supermarket, which is controlled by Li Xiuye of Wenzhou, has a total sales volume of 50 million yuan a year. Not only does it sell brand leather shoes such as rich birds, red dragonflies and elkang, but also other sports shoes and casual shoes. It is said that Kim Po Chun has also set the rules of the game: the brand shoes that go into the gold market in the local market are not allowed to appear on other shoe store counters. This is clearly the result of agents' joint control of terminals and the realization of "monopoly". "Now the competition is standardized management, terminal control and integration of resources." Wang Zhentao, chairman of AOKANG group, said. In the past, the general shoe and clothing store could open to more than 400 square meters, even if it was a large store. Why is the "big shop" coming up now? This is closely related to the duplicating mode of chain monopolization, which ultimately leads to confusion in the market. "WAL-MART's" shop has a higher demand for capital strength and abundant product lines. Small businesses generally have difficulty in following the trend and have strong competitive advantages. Moreover, the product circulation can be compressed to the maximum extent, and it is easy to build a brand line. AOKANG test water "1+N" no doubt, all kinds of bottlenecks intersect, transformation is imperative. Some experts say: the next few years will be a critical period for China's footwear industry. If it fails to transform smoothly, it will be ruthlessly eliminated by the market. So, big brands have tried the water shoe industry supermarket, does it mean that the franchised store should withdraw from the historical stage of shoe sales main channel? The answer is No. The decrease in the number of stores does not necessarily mean the decline, but the result of survival of the fittest. In March 20, 2008, AOKANG group held the "Pan Pearl River Delta regional large-scale investment fair" in Dongguan, Guangdong. This investment fair indicates that it is stepping up the pace of transformation of marketing mode. For the change of marketing mode, Wang Zhenquan, vice president of AOKANG group, summed up two models: "1+N" mode and "zero risk" agency mode. The meaning of "1+N" means that "1" stands for flagship space or single brand flagship store, and "N" stands for multiple stores. And "zero risk" agency is to adopt the way of "bottom guarantee plus business commission" to ensure that the agent does not take any risks. Agents are mainly responsible for store leasing and maintenance of local public relations, and the rest are responsible for the completion and cost bearing of enterprises. It can be seen that stores still occupy an important position in the terminal sales channels of footwear industry. The three major channels are experts in their respective experts. At present, the competition in the shoe market tends to compete in the channel, and the competition in the channel is more and more represented by terminal competition. Franchised stores, shopping malls and shoe industry supermarkets have become the three main channel modes for the terminal distribution of footwear industry. From the development process, the three have their own strengths and weaknesses. The advantage of the store is that it guarantees the brand image of the shoe companies, and returns quickly, and the information feedback is timely and effective. Its disadvantage is that the brand and product are single, but its selectivity is poor. The advantage of the mall lies in its low input cost and high reliance on consumers. Its disadvantages are high price, lack of brand image, slow return of capital, certain risks and high requirements for the management of enterprises. The advantage of shoe industry supermarket lies in its abundant products, low unit cost, large selection of funds and quick return of capital. The drawback is that the brand image of the shoe industry has been weakened. It can be said that stores and shopping malls are still the most important selling forms of footwear industry, while shoe industry supermarkets are based on the variety of shopping malls and specialty stores. In the short term, there will be a tripartite confrontation in the production and marketing channels of the footwear terminal market. The constantly changing marketing environment of shoe enterprises requires the operators of enterprises to make corresponding adjustments. Whoever can be forward-looking, timely reform traditional distribution channels, and explore new paths in reform, will undoubtedly have bigger winning chips in the fierce competition in the future. " Insiders concluded.