Skech Expands The Chinese Market Against The Odds: 95% Of The Shops Are Profitable.

Chen Weili, a Chinese American born in Philippines, is close to sixty days old. 8 years ago, he signed an American sports shoe Brand Company named SKECHERS.

Now he is the chief executive officer of Cage China Limited, Hongkong Cage and Southeast Asia Limited. "This company is now the second largest footwear brand in the United States after NIKE."

He proudly declared to the first financial daily that SKECHERS's share price rose to $140 from $30 a share last year.

There is no doubt that the American company, the main sports shoe company, has a strong momentum of development.

Although the domestic footwear brands continue to pass the bad news of closing stores and declining performance, Chen Weili disagrees.

He and his partners plan to open China's stores to 4000 in the next 3 years.

According to this plan, SKECHERS China needs an average of 1000 new stores a year.

Squeeze into the second tier

"That store is located in Lane Crawford on the Huaihai Road."

Li Sijia's first double SKECHERS should be more than 10 years ago.

At that time, she was quite strange to this brand, and only recognized the spokesperson "Britney Spears" Britney in the counter.

"I think the shoes of this brand are different from those of ADI and Nike.

And I always think ADI and Nike are a bit like boys. "

Li Sijia bought a pair of shoes with S logo on the basis of "reverse thinking". None of her classmates recognized this brand, which made her very proud. After that, she bought two pairs.

After 2006, as lac Crawford withdrew, the brand she was not familiar with seemed to disappear.

Fortunately, however, there are plenty of new brands coming into the market.

On October 2007, 18, Chen Weili and SKECHERS of the United States formally signed the contract.

"Before it was a company in Kunshan, but it never did the market."

Chen Weili took over the former agent's business and set up a brand-new Skech China company. "In China, my company is SKECHERS."

"Because of the same international brand, we are still compared to other international brands.

It started with CONVERSE, NEWBALANCE, PUMA, and now we've got them off.

Chen Weili made no mistake.

In the United States, the footwear Brand Company, which was born in 1992, has entered the second tier. Although it has been chased by brands such as UnderArmour, its performance is not bad at the moment.

After 8 years of development, as of July this year, SKECHERS has 1020 stores in mainland China, of which 20% are direct outlets.

"At the end of this year, there will be 1400."

Chen Weili said.

Compared to the 4000 or 5000 sports brands that are easily open, the market share is not much.

But Chen Weili is not worried.

He admitted that SKECHERS was not a fast start shop because "for the first two years, I was doing my own business."

I will only open a new store after making profits in a shop.

95% of the shops are profitable.

SKECHERS is speeding up its layout in China.

Chen Weili said that the first layout of SKECHERS in the Chinese market is the first tier cities. "We now have almost 1000 stores in the big cities such as North Shanghai.

People here are more receptive to new ideas.

"

In August this year, AOKANG International announced that it signed a strategic cooperation agreement with SKECHERS as its distributor.

An insider from AOKANG international revealed that in the next 5 years, 1000 stores will be opened in five provinces and cities in Zhejiang, Fujian, Jiangxi, Guangdong and Hunan.

In addition to AOKANG, the company started to search for large and powerful Chinese companies in China two years ago, giving them regional distribution rights.

Chen Weili said that SKECHERS has the highest performance in all sports shoes brands in China.

Unlike other brand strategy, the first financial daily noted that SKECHERS stores in China are almost exclusively 120~150 square meters.

This may be one of the successful knack of this brand.

"Domestic rents are too expensive."

Chen Weili thinks that using limited area to display products, "in fact, enough, not too much shop.

Maybe two or three big stores will be flagship stores in the future, but they will not be thousands of flat ones.

In terms of price, the positioning of SKECHERS is biased towards the middle and high end, and the price is mostly between 500~800 yuan, with shoes less than 1000 yuan.

If you walk into this shop, the salesperson will also recommend your memory cushion products.

"Maybe running shoes are not our strongest ones, but we are the first to walk shoes."

Chen Weili told reporters that the mother of one of his employees no longer wore other brand shoes since wearing the brand's walking shoes, "because it's light enough, soft enough and comfortable to wear."

In addition, SKECHERS has little discount.

"This is a strategic problem. Frequent discounts will make customers feel that the original price of your brand is not worth buying."

Although there is a difference between the price of SKECHERS and overseas (the official price difference between China and the US is around 20%), Chen Weili said that SKECHERS with 500 designers will launch hundreds of new products every year.

"I will place an order in the United States according to the needs and positioning of the Chinese market.

China and overseas sell things differently, that's the difference. "

The company is also developing its e-commerce.

"Only 10% of the products sold under the offline line are the same. I need to protect the interests of my distributors."

There are always new competitors.

Chen Weili revealed that he and his partners plan to open SKECHERS stores in China to 4000 in the three years of 2016 ~2018, and the proportion of direct outlets will drop to 10%.

In 2014, the company was on the domestic line.

For 120 million, it is expected to reach 450 million yuan in 2015.

It is revealed that online sales account for less than 30% of the total business.

"First Financial Daily" reporter learned that SKECHERS most proud of its women's shoes products, which accounted for more than 60& of its total sales volume, is also among all international sports shoes brand (women's shoes) sales ranking the best.

Market segmentation has gradually become a new growth point of competition among major sports brands.

The industry giants have noticed this. Adidas opened its first women's store in Zhengda square, Shanghai in early June this year.

At the end of last year, Nike pioneered the IAPM store in Shanghai.

According to public data, the proportion of female consumers in outdoor products increased by 3.4% in 2013, reaching 38.9%.

Brands have already smelled great business opportunities in the female sports consumption market.

In addition, it should be pointed out that those opponents that SKECHERS thought "dropped" had also returned.

NewBalance, for example, may have failed to perform well in the Chinese mainland market, but in the past two years, the company is returning to people's attention.

The new shoe ads launched by NewBalance on the social media have a high click rate, which has aroused heated debate and become the "tide shoe".

And Italy brand FILA, which is also included in Anta, is also concerned by many fans. Its number of stores exceeds 500.

"Yes.

No brand will give up the Chinese market.

Some overseas brands begin to take a detour and take several years of recovery.

When they find a chance, they always come back. "

Chen Weili thinks, yes.

The consumption power of the Chinese market is huge.

The Chen Weili family owns another company that has nearly 30 years of cooperation with RalphLauren, and next month they will bring a sub brand CHAPS of RalphLauren to China.

"When it's time to enter (China) is not too late, it depends on how you play."