Three Or Four Line Cities Become Sports Clothing Brand Competition

Insiders said that during the 3 years, Sportswear The number of sports brand shops is increasing by more than 20% per year, of which only 20%~30% shops are in the first tier cities, and more shops are located in towns and townships with two or three lines below the city level.

Not only domestic sports brand enterprises have seen the opportunity of the three or four line market, but also the international brand Adidas and Nike announced in recent years to enter the three or four line market.

　　 Cake in low market

"Three or four line cities represent the largest middle and high-end consumer market in China." Ouyang, an analyst with foresight Industry Research Institute, affirmed the first financial daily.

According to relevant statistics, three or four line cities distribute about 42% of China's population, 60% of income and 66% of the middle class. With the promotion of relocation and fixed assets investment promotion in export manufacturing industry, there will be a large number of smaller urban residents entering the middle class and the wealthy consumer class for the first ten years. The proportion of the middle and high-income families in the local population will also increase from about 14% in 2010 to more than 40% in 2020.

Ouyang's new week analysis shows that this situation is similar to what happened once in a second tier city 5~10 years ago. The rapid growth of income makes the lower level cities have a strong desire to upgrade consumption locally, but because of lower housing prices and lower living costs, the real disposable income of the middle class in small and medium-sized cities is much higher than that of the big cities.

On the other hand, due to the low cost of labor and rent, the dilution effect of channel sinking on corporate profit margin is not significant. Calculations show that, regardless of the difference in decoration costs, the typical pre tax profit margin of the three or four line cities is almost the same as that of the second tier market.

But the independent critic of the garment industry Ma Gang believes that the business and consumption of the low market are almost concentrated in one of the one or two core areas of the city.

Orient Securities research report pointed out that in the process of sinking into the low line market, the diversification and differentiation of the Chinese market will be displayed in a most incisive way. The brand will face more challenges than that of a second tier city. In other words, the low line market is really a time consuming and laborious stage.

　 The earth is not convinced, the upper and lower sides attack.

Unlike the channel strategy of developing direct outlets in a second tier city, because of the difficulties of communication costs, logistics, personnel training and resource integration, sports brand players often take the form of franchising in the process of sinking into the low line market, especially in towns and townships.

But this is obviously overestimated. brand Dealer's ability to control and control distributors.

On the Internet, there was a picture of the promotional scene of a sports brand that was widely spread. In this picture, the shop located in the western town was hung with colorful Xuan paper. It was printed on the "full court ninety percent off". The plastic model was also full of "50 yuan" and "99 yuan one set" leaflets.

This is far from the image of youth, fashion and sports taste that the brand has always emphasized.

In addition, the large scale agency in the low market makes it difficult for the brand itself to communicate directly with the franchisee, resulting in a rather slow response to the terminal retail business in the market, and it is difficult for enterprises to understand the market situation of product sales in time.

In addition to these internal factors, the industry insiders told reporters that the three or four tier cities and townships have always been the market of the two or three line sports brands in China. "Brands such as Hongxing Erke and del Hui, which are priced more than 100 yuan, are very popular. Lining and Anta, which sell at the original price, are hardly competitive."

Because of this, the major sports brands once launched a price war in the low line market. However, the practice of "killing one thousand of themselves and losing eight hundred" has not only damaged the profit margins of enterprises, but also has cast a shadow over the brand image.

Besides, the pressure also comes from the invasion of international brands.

Take Adidas as an example, as early as 2010, it formulated the "2015 way" strategy, and plans to reach 1400 domestic low level cities in 2015. At present, Adidas has opened stores in more than 900 domestic low level cities, of which only 400 have been opened last year. Nike has also announced plans to open 40 new ~50 factory stores in China this year.

Under the impact of the above multiple factors, the growth of sports brand in the low line market is frequently blocked, and the stock has reached a new high.

In the first half of 2012, Lining, Anta, 31st degree, XTEP international, PEAK (01968.HK) and China trend (03818.HK) 6 domestic sports brands had a total inventory of 3 billion 721 million yuan. In the predicament, closing the inefficient stores has become the fastest way for enterprises to break their own arms and save themselves. In 2012, the above six major sports brands closed more than 4000 stores. {page_break}

　 Breakthrough in transformation

In order to solve the problem of linking up with dealers in low - level cities, sports brands have adopted the practice of sinking control centers.

Zhang Qing, the founder of the key road, told reporters that Lining, Anta Other sports brands have recently recognized that it is necessary to take the initiative to adjust the distribution outlets and vigorously help retailers to do well in retail sales. "Closing stores is actually squeezing bubbles. On the one hand, they should close down inefficient shops, and on the other hand, start a more efficient store. This is an optimization process."

In addition, the sporting goods enterprises represented by XTEP have begun to operate directly in some key regional pilot companies. However, in view of the drawbacks of the supply chain's slow response, almost all sports brands have begun to enter the strategic transformation from wholesale to retail.

Lining, who was the first to make a response, put forward the transformation from the traditional wholesale mode to the retail mode featuring "guided orders, quick orders and quick response". Recently, the Lining Information Center, which has been outsourced to third parties, has quietly settled in the Lining (Jingmen) Industrial Park.

In the written reply to the newspaper, Anta also said that Anta has been sinking in the implementation of the organizational structure, and the headquarters is directly butting distributors and retail branches to arrange the work of the company's retail professionals and distributors to maximize the operation capacity of the terminal stores.

　　 360 degree Han Ye, director of the public relations center, told reporters that the innovation and differentiation of products and marketing will be an important factor affecting the market structure of sporting goods market. "The layout of new business points, multi brand integrated marketing and experiential marketing will be the inevitable trend of future development."

"Today's second tier market is tomorrow's three or four line market. Only by continuing to increase market sensitivity, product response speed, inventory turnover, and enhance R & D design and product added value, can enterprises obtain opportunities in the low line market." Zhang Qing thinks.