Local Sports Industry Has To Open Knockout Because Of Inventory Crisis.

With the end of the "marketing war" of London Olympic Games, sports brand has also unveiled its achievements in the first half of this year.

However, because of the high inventory and the large discount of products, the profits of many sports brands have been seriously affected. In addition, some brands have voluntarily reduced the volume of shipments to distributors, while adjusting the store structure and closing some stores, resulting in a decline in revenue.

Analysis of the industry, "local sports brand retailers inventory crisis has not yet bottomed out, in the industry adjustment process, there will be some enterprises were eliminated."

Marketing costs have been reduced.

Although this year is in the Olympic cycle, but from the first half of the year, the domestic sports brand input in advertising, marketing costs have not "triumphantly advance".

It is understood that

The advertising expenses of XTEP, PEAK and China have decreased.

Among them, Anta's advertising expenses accounted for 10.4% of sales revenue and 2.2% of the same period. The advertising and promotion expenses of XTEP also decreased by 297 million 900 thousand yuan, accounting for about 11.4% of the group's total revenue, compared with 303 million 100 thousand yuan and 11.8% in 2011. The advertising cost of China's trend dropped by more than 100 million yuan to 90 million yuan, while PEAK's sales and distribution expenses also decreased by 25.8% to 227 million yuan, mainly due to the decrease of advertising and promotion activities. The cost of advertising and promotion of Anta was also reduced by 297 million 900 thousand yuan.

According to the analysis of the industry, although many sports brands were outstanding in London Olympic Games, they sponsored more than ten Olympic delegations, but based on the pressure of funds, enterprises still cut down a lot of marketing expenses.

However, some brands have increased their marketing input this year.

The half year report showed that the advertising and publicity expenses increased from 6.8% to 13.5%.

The advertising expenses mentioned are mainly used for the Haiyang 2012 Asian Beach Games, the Nanjing Youth Olympic Games in 2014, and the sponsorship fees for the star athletes.

Terminal market enters shuffle period

"Early industry competition is over, some enterprises may get out faster during the adjustment period, and the concentration of brands will be higher and higher. Some brands will do too much, some shops too much, and they will go through the inventory digestion period.

The industry adjustment will take two years to complete and there will still be many opportunities for powerful brand enterprises.

Prior to receiving media interviews, Ding Shizhong, chairman and CEO of Anta's board of directors, said that after nearly twenty years of rapid growth of local sports brands, it has entered the adjustment period. "Within five years, there may be many survival, but there are five families who can live well."

Insiders pointed out that "from the earnings data, the pressure of local sports brand growth is very large, and the reshuffle of the terminal market has started in the number of Brand Company stores."

Lining, China trend, PEAK and others have begun to reduce the number of terminal stores voluntarily and close some of the loss stores to optimize the entire retail network.

Among them, Lining closed 1200 stores in the first half of the year, PEAK closed 747 retail outlets, and China closed 569 stores.

In addition, in order to cope with the high inventory still exists, Anta and XTEP have begun to reduce the order volume of dealers and adopt a more flexible repair system in the further reduction of wholesale discounts.

In fact, local

We should not only compete in the elimination tournament, but also resist foreign invasion.

Adidas's public figures show that Adidas's global sales reached 7 billion 341 million euros in the first half of 2012, an increase of 11% over the same period last year, with net profit of 455 million euros, an increase of 30% over the same period last year.

At the same time, Adidas also raised its annual net profit forecast. It is estimated that net profit will increase from 15% to 17%.

Enterprises turn to endogenous growth

A report from Dongxing Securities pointed out that

The domestic sports apparel industry is in the second half of the mature period.

Sports brand as a typical functional and occasion brand clothing, its target market is relatively small, such as leisure and other consumer goods. After experiencing the Enlightenment period of the 90s of last century, the growth period from 2000 to 2007 and the first half of the mature period from 2008 to now, the current market has shown obvious signs of growth fatigue. The era of "easy money making" has been over for several years.

This also means that with the growth of the market scale and the stability of the industry competition pattern, the sports brand must start from the rapid expansion of the marketing network, increase the number of stores to enhance the extension stage of the performance, and pform into the stage of comprehensively enhancing the endogenous growth potential of enterprises by relying on improving enterprise management, improving technology and product innovation ability.

It is understood that the local sports brands are facing difficulties at this stage, and foreign brands have also experienced it.

Statistics show that after experiencing the rapid growth of ten years from 1972 to 1982, Nike's performance in 1983 to 1985 has dropped sharply, and its share price has dropped to about 0.3 dollars at the end of 1984.

Later, after the turning point of the late 80s of last century, Nike regained the first place in the US market at the end of 1989, and embarked on the stage of sustained and rapid growth.

The key to success in reversing the crisis is undoubtedly related to "being good at catching up with the latest trends and trends in the market, reflecting and adjusting existing strategies in a timely manner, and constantly strengthening their own R & D and marketing capabilities", which are worthy of reference from local sporting goods companies.