Exploring The Self Salvation Of The Jinjiang Department Behind PEAK's "Going To Sea"

Under the pressure of industry adjustment and channel inventory, including Anta sports (02020.HK), XTEP International (01368.HK) and 31st degree (01361.HK) performance is still declining. In 2013, PEAK sports (01968.HK) earned 532 million yuan in overseas market, accounted for 20.4% of sales, and accounted for 20% of overseas business sales, which means PEAK had achieved internationalization of channels. While exploring the development of many brands such as children's wear, last year, brands increased their overseas expansion and set out long-term development plans.

Find a way out again

In 2010, at the invitation of NBA, Xu Jingnan, chairman of PEAK's board of directors, was preparing for his first trip to the US. The embassy visa officer asked Xu Jingnan why he was abroad. He said he was a NBA sponsor and went to see NBA. If the visa officer throws a passport without saying anything, he throws a sentence. "NBA, you need to sponsor if you have money?"

PEAK's experience of going to sea represents the embarrassment of the internationalization of domestic sports brands. "Lining can't do well, can you do it well? What a great skill for a scooter!" Xu Jingnan did not deny his origins.

"In 2011, I found that the domestic market was a little saturated, and the intensity of overseas markets was intensified." Xu Jingnan told reporters that now we mention "within the scope of protection, outside the promotion of internal", 5 years ago we dare not mention this, and now we can interact with the whole world.

In March 12th, the 2013 annual report released by PEAK showed that its operating income was 2 billion 613 million yuan, down 10% from the same period last year. Among them, China's market revenue was 2 billion 80 million yuan, accounting for 79.6% of total revenue, down 17.3% from the same period last year. Overseas market revenue was 532 million yuan, accounting for 20.4% of total revenue, an increase of 37.2% over the same period last year.

According to the usual "internationalization" standard, the contribution of overseas market to the company's business has reached 20% standard, PEAK has already realized the internationalization of channels. Even if the internationalisation was in the front of Lining (02331.HK), overseas sales accounted for only 2.2% in 2012.

"20% is not a sign, but 50% is a sign." Xu Zhihua, chief executive of PEAK, told reporters that according to his original plan, the 20% target was achieved in 2016.

From the overseas market division, the Asian market grew by 89.2% and the European market increased by 89.6%. In 2011 and 2012, PEAK's overseas market sales accounted for 9.9% and 13.4% respectively.

With the end of the industry adjustment and the opening up of the overseas blank market, Xu Jingnan is optimistic that the company will maintain its two digit growth in the next 10 years, and "there will be a great improvement in the 3-5 years."

Industry adjustment or touch bottom

On the one hand is the continued decline in performance, on the other hand is the "Jinjiang Department" before the self redemption, including children's clothing and other categories of development, improve performance.

The 31st annual report shows that in 2013, the company's revenue decreased by 27.6% to 3 billion 583 million yuan, and net profit fell to 211 million yuan, down 70.1% compared with the same period last year. It is the most serious decline in the "Jinjiang Department".

Anta sports turnover and net profit in 2013 were 7 billion 281 million yuan, 1 billion 315 million yuan, down 4.5%, 3.2%, showing Anta's leading position in the "Jinjiang Department".

XTEP international achieved revenue and net profit of 4 billion 340 million yuan and 606 million yuan in 2013, down 21.7% and 25.2% respectively.

The major brands continue to cope with excess inventory, which is also the main reason for the decline in performance. 331 degrees indicated that the company received a large reduction last year. In the second half of the year, impairment losses were recorded for overdue accounts receivable, and the increase in production costs and other factors all affected the business performance.

From the change in the number of stores clothing The total number of retail outlets decreased from 783 to 7299, and the total number of children's wear retail outlets increased from 1590 to 1858. Children's products account for 11.7% of total revenue.

The contrast between the retail sales of children's clothing and retail sales of children's clothing reflects the current low quality of sports brand and the potential of children's clothing market.

In 2013, Anta children's wear range increased from 833 to 881. Anta said that it is suitable for market positioning, and the growth of children's sporting goods series, FILA brand products and e-commerce sales has great potential.

XTEP continues to expand the sales network of children. It is estimated that there will be about 350 sales outlets in the two to four lines in China before the end of 2014. The annual report shows that the income of XTEP's other products increased by about 114.9% to 162 million 800 thousand yuan, mainly due to the increase in sales of XTEP's children's products and e-commerce sales.

The growth of orders from the market, or suggesting that the industry adjustment may have bottomed out, has gradually entered the recovery channel. Since the fourth quarter of last year, Anta's Anta orders have increased. XTEP's orders for the first two quarters of this year have been reduced, but with the offset offset, the annual orders are flat or increasing.

However, Anta CEO Ding Shizhong said that China's sporting goods industry still had problems of overstock and sharp price reduction, which brought instability to China's sporting goods industry in the short term.

　　 The second wave of internationalization

It is worth noting that there has been a wave of overseas expansion since last year.

In 2013, Anta opened its first flagship store in the Middle East in Dubai, the United Arab Emirates. Overseas retailers have set up Anta stores and counters in Southeast Asia, Eastern Europe and the Middle East market. Last year, XTEP's overseas retail outlets amounted to 200, doubling its number in the previous year. In Taiwan, China opened a branch office to operate overseas businesses. The target market includes the United States, South America, Southeast Asia and Europe, and plans to quickly occupy overseas markets in the form of buyout or product agents.

Actually, the way PEAK internationalized today is very similar to Lining's internationalization. For example, "first brand internationalization, then market internationalization" and the establishment of an American branch. Only PEAK's pace is more steady and steady: adhering to the basketball specialization image and the focus event endorsement mode will directly bring about the growth of overseas market.

"Lining's internationalization goal is very clear, but internal control management is not done well, not international failure." Xu Jingnan commented.

Even if PEAK wants to promote the integration of global resources, it will take a few years for a truly internationalized company, for example, in the international arena. brand PEAK has little experience in promoting experience and supporting legal and policy personnel.

The key way to consult CEO Zhang Qing believes that when the national soft power has not yet been fully upgraded, the internationalization of China's consumer brand channels is not easy, and the lack of DNA in Chinese sports brand and lack of cultural accumulation.