First, "Break" Or "Become" Or Become The Path Of The Industry Downturn.

The pformation of sporting goods companies is still a long way to go.

According to the 2014 Chinese sporting goods business, several listed companies are happy and worried.

Although Li Ning Co has achieved 8% growth in revenue, it still loses 586 million yuan.

Anta and PEAK realized their two digit growth in revenue and net profit, showing the momentum of recovery.

In terms of net profit growth, the market grew by 34.64% faster than the same period in 2013.

Has the domestic sporting goods industry ushered in a significant turnaround after experiencing a downturn? What is the key to the pformation of many enterprises still in a low ebb?

To this end, the reporter participated in the "2014 China family business heritage theme forum" sponsored by family business magazine in November 30th, and interviewed PEAK sports director Xu Jingnan.

Reporter: what do you think is the biggest problem in the sporting goods industry?

Xu Jingnan: in China

In this market, it is unreasonable to say that the demand for sporting goods is decreasing. The key problem is that everyone is dealing with inventory, and prices are falling randomly, resulting in disorder and confusion in the market.

We have a population of 1 billion 300 million, such a market potential, how many billions of products can be sold? Our 10 brands do not add up to a Nike, even if a brand achieves 5 billion yuan, the 10 add up to only 50 billion yuan, mainly because we are chaotic and have no order.

The operation of many brands has problems and prices have not been upheld.

Reporter: according to the semi annual report released by PEAK sports in 2014, the turnover of the company increased by 10.1% in the first half to 1 billion 291 million yuan, and the shareholders should account for 34.6% of the profits in the current period, which is 121 million yuan. PEAK seems to be out of the recession of the sporting goods market.

What experience does PEAK have in the face of the sporting goods crisis?

Xu Jingnan: we should say that we should be more timely. In the second half of 2011, we found that the problem began to be adjusted immediately.

We achieved 4 billion 600 million yuan in sales at that time, but we made a decisive adjustment, adjusted in 2012, continued to adjust in 2013, adjusted for two years, and sales fell to 2 billion 800 million yuan.

In the process, our measures include cutting down some shops, turning off some capacity, giving profits to dealers, and lowering gross profits.

There are also strategic adjustments, such as increasing the internationalization process and avoiding the chaos of domestic competition.

In 2014, we began to see a big increase in export sales, and there was also a healthy return inside the enterprise. If we hadn't made such an active adjustment at that time, there would not be any increase in 2014.

Reporter: where are the difficulties in adjusting the industry downturn?

Xu Jingnan: there are very few fundamental adjustments like ours.

Many people get bogged down in the mire but do not want to face reality.

The most valuable thing for a man is to reflect on himself, to sum up himself, and to adjust himself.

The difference between us and other enterprises is that we can take the initiative to adjust.

Of course, it is difficult to adjust. Some of you will be reluctant to tune in. You need to cut off some stores and you will surely offend vested interests.

Adjustment is indeed very difficult.

For Lining, it was in 2012, but it was difficult to tune in.

His three return, return to basketball, return to the domestic market, return to the Lining brand, I think the direction is right.

But I think Lining should cut down the high cost projects, keep the advantage resources and keep the advantages.

But it turned out not to be the case. In fact, Lining kept the high loss Direct stores. He had two advantages, one was the client, the other was the national resources, which was his best quality.

Enterprise resources are limited, not unlimited.

How do you fight when the bullets are gone?

Reporter: when do you think the market will recover?

Xu Jingnan: in the future, I think there will be a strong recovery in the second half of next year.

Now I see a few good points at the level of national policy.

One is the country's comprehensive deepening reform. Private enterprises are the main body of marketization. This policy is obviously good for us.

The other is to rule the country according to law.

Ruling the country according to law will have a great impact on the industry. If it can be implemented, the advertising of garment enterprises will not exaggerate and will not mislead consumers, but the investment of sports goods companies before advertising is disordered.

There is also a disorderly competition in the electricity business.

The Internet Conference proposes interconnection and mutual governance, mainly dealing with false things, that is, reform, making the market more orderly.

The third is to increase the scale of sports industry, which is also good for the sporting goods industry.

Reporter: in the first paragraph, when the Li Ning Co crisis was most serious, some media reported that you proposed to restructure with Lining?

Xu Jingnan: at that time, we suggested that we should cooperate with Lining, which is a suggestion.

At that time, it would be nice if we merged.

Because our two strategic objectives are the same, we all want to be an international brand of Chinese, and more importantly, the two enterprises are united in complementary advantages.

Takeovers are big to eat and small. Recombination is complementary to each other. There is no question of who will eat.

Lining is a part of money, and he can tide over difficulties, but he will spend all his money.

For Li Ning Co, the most important thing is to cut the loss.

It is very difficult to cut down.

For example, if you want to cut a store, the vested interests of this shop will be unhappy.

He will tell you, do not cut down, this shop is image, once we cut off, we have no image, people will think we can not, as a decision maker, do you still have the courage to cut it?

For us, the development experience of Li Ning Co is a textbook which needs us and other sporting goods companies to study well and deeply.

Going abroad is still a long-term policy.

Reporter: what do you think of the division of domestic sporting goods manufacturers?

Xu Jingnan: of course, the first army is a listed company.

In the past, Lining took up the height of the brand and took the first place in the sales. The gap between the company and the latter was far away. Now it is not the case.

Further down, if I rank in line with the brand height, I think PEAK is the first and PEAK has gained some success in shaping the international brand.

If Anta's sales are likely to take precedence according to the sales row, its outlets will be better.

But in my opinion, for sporting goods companies, the strength of listed companies can be quite different, because the financial cost of listed companies is relatively low, and the days of enterprises without listing will be difficult.

Reporter: after experiencing the low level of the sporting goods industry, is the gap between us and those big competitors abroad bigger?

Xu Jingnan: compared with the first line brands abroad, if we compare with the quality of products, we will not be inferior to them.

In China's market, if the impact on consumers, our domestic brands are rising, international brands are not growing as fast as we are, and we are gradually narrowing the gap with the first brand.

Let me give you an example. Some international brands of second camps in the past, such as FIFA, kappa, CONVERSE (Converse) and so on, now look at their influence in China.

It is very difficult for foreign second-line brands to enter the country again.

If there is no shop or two promotion, how can these second-line brands come in? If we compare the quality of patterns and products, we will not be inferior to them.

Reporter: in the low market of sports goods in China, many enterprises are retraction. After two years of adjustment, you start to promote overseas. What do you think is the importance of overseas market?

Xu Jingnan: no matter what products, going out is important. Now important, the future is still important.

Because of overcapacity in China, there are only two ways to solve the problem: one is to cut production, the other is to open up new markets abroad.

Where is the digestion capacity? It's abroad.

Abroad, the two or three line market is everywhere now.

These two or three line markets have been monopolized by Europe and the United States in the past, but now our country is strong enough to provide a guarantee for us to go out. We have to win a piece of cake from the European and American brands.

Reporter: what is the proportion of PEAK's overseas sales now? What kind of international sponsorship and promotion do you have?

Xu Jingnan: the strength of Chinese sporting goods enterprises is improving. How many enterprises are sponsoring the Olympic Games?

The media said that Chinese enterprises were waking up and going out, which made sense.

In the world cup, PEAK's advertising accounted for 1/4, and our products were used by our referee's shoes.

We sponsor four teams in Iran, New Zealand, Australia and Serbia.

Serbia took second place to compete with the United States for the championship.

Now the Olympic Committee of 7 countries is cooperating with us.

In 2012, we took 7 bronze, 5 silver, 7 gold medals and 19 medals in London.

Athletes used to compete for gold medals, but now they are fighting for this position.

Our products sold well in the Middle East, and now they sell well in Europe and America. This is mainly through the European Championships, and in Southeast Asia through Asian Championships.

Products to sell well in one place need three elements: brand influence, dealer's organizational capability and product adaptability.

You can't hire a good dealer without brand influence, so you need to make a brand first.

To attract investment, we must cooperate with distributors.

Our core is the domestic market. Our overseas sales account for more than 20% of the total sales.

We are more efficient and human than international brands.

Reporter: how do we compete with international brands such as Nike and Adidas?

Xu Jingnan: many people ask whether we can compete with Adidas and so on internationally. We can do all that they can, and we can do what they can't do. We have the advantage that they do not have.

We are more efficient than ADI and Nike.

We spend three hundred million yuan a year on advertising, with three hundred million yuan, we can achieve greater brand growth.

And these first-line brands use billions of dollars to advertise. Who is more efficient in brand promotion? We use small amounts of money to do great things.

The two important aspects of enterprise comparison are efficiency and cost.

Chinese enterprises will talk more about EQ, that is, Chinese people talk about friendship in their business dealership. We are talking with dealers, making friends, and the big brands in the international market are not very sensitive. They are more subordinate to dealers.

We now have branch offices in the United States, and other agencies are agents.

For example, we use agency system in Europe and set up shop by agents. We now have hundreds of stores in the world.

Interviewer: how do you learn the strengths of international brands?

Xu Jingnan: for their good places, we have to keep learning.

To sum up in a sentence, we must learn from it, approach it, learn it again, so as to approach it.

These are Adidas and Nike.

It's very successful in making brand.