Double Star Shoe Industry Channel Mutiny Highlights The Decline Of Agency System

Looking at the first and second tier sportswear brands in China, few enterprises regard the agency system as the mainstream of their channel policies. Although many enterprises have not completely abandoned the dual star competition, though they are in a hubbub, they can not arouse much splash in the sports apparel industry.

An unnamed source told the first financial daily: "such a fierce competition between the two stars is normal."

In his view, the reason is very simple, "double star channel has always been the agent system, and agent system is easy to have this problem."

In the eyes of most famous sportswear brands in China, early acting production as the main channel is regarded as a synonym for lagging behind.

Therefore, even if the channel competition is fierce, it is difficult to resonate with the industry.

The change of channel mode has always expressed regret for the current development trend of Qingdao Binxing (000599.SZ), and Yang Dayun, President of Greater China, UTA Fashion Management Group, has always expressed regret.

Qingdao double star is earlier than Lining (02331.HK), or even one of the earliest sportswear brands in China, but its influence in the market is already in the ten place.

"It has too many interests."

Yang Dayun believes that this is one of the reasons why the sportswear business is not beautiful.

His comments on Double Star channels are "relatively backward".

The channel level of sports apparel industry is at the forefront of the domestic garment industry.

In 2005, sales of Nike, Adidas, Lining, Anta, Reebok and other five brands accounted for about 40% of China's sports apparel market, and Nike, Adidas and other brands had already entered the specialized sporting goods retail channel. This channel mode has been similar to the international fashion channel model, and the traditional agents are deteriorating rather than the essential link between the enterprise and the terminal.

Of course, this is just one way of international brand channel, and it is not the choice of most domestic brands.

At present, there are four ways of sports apparel enterprises in China: "headquarters - Branch - terminal", "headquarters - agents - terminal", "headquarters - direct camp terminal", "agent wholesale terminal".

"We adopt the first three channels."

Seven wolves (love stock, quotes, information) Sporting Goods Co., Ltd. (hereinafter referred to as "seven wolves sports") assistant LAN, told reporters.

In 2005, when the seven wolves entered the sportswear market, the movement of the seven wolves was "seeking quantity but not quality".

Compared with the "headquarters agent terminal alliance" channel mode, enterprises have stronger control over the two modes of "headquarters branch company terminal join" and "headquarters direct terminal terminal".

"Agents have their own companies, many systems and enterprises may not be unified."

Mr. Lan said.

At the same time, conflicts of interest between agents and enterprises are obvious. Channel control is painful for enterprises adopting agency system.

As the market has taken a firm foothold, the seven wolves campaign has started intensive farming. It has used local agents to form a branch to strengthen the channel control rights. In the seven wolf sports market, there are only two or three agents in the regional market. Under its more than 1000 terminal stores, there are only about 100 shops controlled by agents.

On the contrary, Qingdao double star has been the mainstream of its channel policy in many years of operation.

Now the "Star" group was formerly a Southwest operation company under the double star group. After restructuring, it became a regional agent for the two star products. The two star group does not own the shares of the Chengdu company and its subordinate companies after restructuring.

This approach is extremely dangerous, almost equal to letting most channels and terminals drift away from their direct control.

Looking at the first and second tier sportswear brands in China, few enterprises regard the agency system as the mainstream of their channel policies, though many enterprises have not completely abandoned it.

The friction between enterprises and channels is very common in the industry.

"I went to some markets in Fujian recently."

Mr. LAN told reporters that he often had to go out to the market. One of the purposes of this trip to Fujian was to expand new stores, and the other was to resolve communication barriers with terminals.

Yang told reporters that the friction between enterprises and agents or terminals is very frequent. The amount of discount, authorized area, inventory digestion, business philosophy and so on can cause disputes between enterprises and channels.

Mr. LAN did not feel anything abnormal. "The angle of the station is different. The problem will be different."

The whole industry is facing this kind of problem.

In the process of resolving contradictions, despite the changing circumstances, there are only two ways to go in the end: continue to run in; the interests vary too much; one takes two shots.

In the process of fighting between enterprises and channels, there is only one ultimate rule: when the brand is strong, the channel can be subdue; when the channel is strong, the brand can be subdue.

"Too much power is too much to worry about." after all, manufacturers consider the whole market.

An industry spokesman, who declined to be named, told reporters.

When the channels are strong, they will have more bargaining power. Therefore, when enterprises adopt the agent system, we must consider the checks and balances with the agents.

In the liquor making industry, when facing an increasingly powerful general agent, enterprises often choose to "cut the vassal", such as reducing their agency area.

But Qingdao's twin stars do not seem to consider how to balance agents.

The star group's predecessor, Chengdu Binxing, owns nearly 2000 stores in the southwest, while Qingdao has 4000 stores in the whole country. The Chengdu double star production and management team reaches 20 thousand people, and the market share also occupies half of Qingdao's double star. Chengdu binaries also share Ji'nan shares, plus Ji'nan's double Star controlled 5 cities in Western Shandong, Hebei and Henan stores, which actually control more than 70% sales network.

Enterprises and agents are interest groups. Enterprises need to let agents grow and grow, because small and weak agents are not very helpful to them, but if they do not consider their checks and balances, the growth of agents is not good for enterprises.

It is unrealistic to rely on personal charm, prestige or the gratitude of an agent to balance the idea of an agent, especially when the behavior of an enterprise infringes upon the significant interests of the agent.