Shoe King BELLE Is In Deep Trouble And Has Become A Channel.

　 Shoe king BELLE In deep trouble

BELLE International released half yearly results, operating income of 19 billion 540 million yuan, an increase of 0.9% over the same period last year. Net profit of 1 billion 730 million, down nearly 20% compared with the same period last year, which is another sharp decline after the 38% negative growth of net profit for the first time in 2015.

The sign of decline of BELLE began in 2012. In 2012, the net profit of BELLE increased by only 2%. At that time, the net profit growth of BELLE remained at over 20% (except 2008). After that, the net profit growth rate never went up to two figures, until 2015, a sharp drop of 38%.

The growth rate of revenue has declined from 2012 to 0.9%.

BELLE was founded in 1991, and its business is mainly customized and manufactured according to the requirements of Hongkong customers. footwear The product has since been expanded to the Chinese market. Deng Yao, the founder of BELLE and BELLE international CEO Sheng peppers, are businessmen. They have a deep understanding of the footwear industry. Since the mid 90s, they have decided to build their own footwear products. brand And retail network. In the following years, BELLE's business expanded rapidly and became the leading brand of Chinese women's shoes.

BELLE's brands include Belle, Teenmix, Tata, Staccato, Basto, JipiJapa, Millies, Joy&Peace, 15MINS and Mirabell. In addition, the brands of BELLE agents include Bata, Mirabell, Basto, X. Basically, the ladies picked it up in the department store, and finally found that they bought all the products of Bai Li's. In addition to the footwear business, BELLE also acts as a sports brand such as NIKE and Adidas. This is the Gome of the shoe industry. When BELLE went public in 2007, its market value was as high as 67 billion Hong Kong dollars, which exceeded the market value of Gome 36 billion at that time.

After the listing, under the promotion of capital, BELLE accelerated its horse race enclosure and entered the shopping malls.

With the multi brand strategy, BELLE almost monopolized the sales channels of women's shoes. In the absence of other consumer scenarios, firmly controlling the department store channel gives BELLE great strength. In 2006, BELLE's revenue was only 6 billion 200 million. In 2011, BELLE's revenue reached 28 billion 900 million, and its net profit increased from 900 million in 2006 to 4 billion 200 million in 2011. Before 2011, gross margin has been rising, reflecting the advantage of pricing power brought by BELLE's monopolistic advantage.

The performance gave strong support to the stock price, and BELLE's market value was over 150 billion. A few years ago, a fund manager once said: when you study shoes, you will divide the company into two categories, one is BELLE, the other is non BELLE. It shows the market position of BELLE at that time.

At present, the market value of BELLE is less than 40 billion, even its market value when it first appeared. "Wherever women walk, there must be BELLE." Sheng Bai Chai looked at this sentence as a reality, but watched it fade away, and this was done on his hands.

Chen Yihong, a Chinese trend, once said that professional managers like "Sheng Bai Jiao" who have the business concept are hard to find. Sheng Bai Chai combined the retail traders to form a joint stock company, and through the rapid value-added of the industry over the past 10 years, we have all gained benefits through this consortium. So BELLE set up a model to control the retail end earlier.

But for BELLE, the huge retail end has become a burden.

Channels for success and channels for failure

Because the consumption scene has changed.

In China in 90s, from the demand side, the only consumer scenario is department stores or street stores. From the supply side, there is no strong brand. Under such circumstances, immediate development channels to fill the huge vacuum of demand are the most correct strategies. Businessman Deng Yao and Sheng Bai Jiao are well versed in this way.

At the beginning of the 90 generation, the mainland of China had not yet opened up retail business to foreign investors. BELLE was a Hong Kong background and could not do marketing. Deng Yao found hundreds of peppers and peppers, mobilized their family members, and made dozens of distributors, skillfully bypassed the policy restrictions and made distribution. However, Deng Yao and Sheng Bai pepper soon discovered that the control mode of this agent mode was relatively weak. In 1997, BELLE changed to the franchise mode and signed exclusive distribution arrangements with 16 distributors. In 2002, Sheng Bai Jiao organized distributors to set up Shenzhen BELLE Investment Co., Ltd., and firmly controlled the retail end.

When it comes to the secret of BELLE's success, it often does not leave its multi brand strategy. Compared with a single brand, multi brand strategy can be positioned according to the customers of different classes. The distinction between high-end brand and low-end brand is conducive to maintaining brand image. However, from the feedback of consumers, the differentiation of BELLE's brand products is very small. Therefore, the starting point of BELLE's multi brand strategy is brand rather than channel.

Before the listing, BELLE had 6 private brands and 2 agency brands in its footwear business. After listing, BELLE launched a series of acquisitions immediately, for example, 380 million bought FIE, 600 million bought Mie Li, and 1 billion 600 million bought it. The result is that BELLE has increased its layout in the domestic footwear industry, expanded its retail chain capabilities, firmly controlled the department stores, and firmly controlled the high-end market of Chinese women's footwear industry.

E-commerce has not yet developed, only the two consumer scenarios of street stores and department stores in China, this mode of distribution is invincible, because consumers can only accept these choices, what BELLE has the final say. In the 20 years from 1991 to 2011, BELLE's performance naturally took off after benefiting from the continuous improvement of China's per capita income level.

In this consumption scenario, BELLE built a deep and wide moat through the channel control. However, the impact of e-commerce is like building a bridge on this moat. This moat has become a "magic line of defense".

Online, consumers can quickly meet many brands. This time, it is no longer what brands tell consumers to buy, but consumers themselves decide what to buy. The spanparency of prices has intensified competition, and the cost performance of BELLE products has been greatly reduced.

It is obvious that BELLE's response is not sensitive and it is unfair to not find this consumption scenario. BELLE is a domestic retail brand who strongly intervened in the electricity supplier earlier. In July 2011, BELLE set up an excellent purchase network, which was once regarded as a model of vertical B2C. At the same time, it also has layout in Tmall and other electronic business platforms. However, the huge offline terminal has made BELLE hesitate in the business of electronic commerce. For a long time, BELLE's electronic business platform is only used to clean up the quarterly money.

And when BELLE hesitated in the electricity supplier, in the face of the economic downturn and the impact of the electricity supplier, another format under the line - shopping center is rising, which further absorbed the department stores' traffic and reduced random consumption. In the new format of shopping center, there are foreign brands entering, and the rise of new brands in China, BELLE has little say power.

As of February 2016, BELLE had more than 20 thousand self operated outlets in mainland China. Under the environment of continuous switching of consumer scenarios, BELLE was supposed to turn the boat around. Sheng Bai pepper said in a performance press conference that BELLE will not reverse its revenue and earnings in the next one or two years. If there is no spanformation, the group will only "die slowly".

The epitome of China's economic environment

Slowly, not only BELLE, but also Daphne, JEANSWEST, Baleno and Smith Barney were dying. Look at the performance of footwear and clothing companies in Hong Kong stock market over the past few years, which is the fall of the whole industry.

If it is only the fall of a single enterprise, the reason may be individual. If it is the collective fall of the whole industry, it must be stamped on the background of the economic environment. The clothing and footwear industry represented by BELLE is actually a microcosm of China's economic environment. In the first 20 years of BELLE, China's economy has risen at the speed of world attention, and since 2011, China's economic slowdown has been an indisputable fact. This is not slowed down by the impact of the economic cycle, but slowed down by the constraints of economic development. This slowdown is long and difficult to reverse.

However, the change of China's economic growth rate has not fully explained the fall of such enterprises represented by BELLE. Many voices accuse BELLE of lacking innovation, just as many voices accuse China of lacking independent innovation.

But there is no refutable fact that even if China lacks innovation, even if BELLE lacks innovation, they have achieved great success.

Clothing and footwear brands like BELLE started their business in China in 80s or 90s and synchronized with China's development. At that time, the supply of China was severely lacking, and the demand of consumers' personality had not yet been aroused. In this context, channel is the core competitiveness of the brand. The most effective way is to copy, not innovate, and quickly distribute goods. So, no matter how the commentators today accused BELLE of its lack of brand innovation and product homogeneity, this strategy is the most likely and easiest path for BELLE to succeed in the first 20 years of BELLE.

Copying this strategy is also the most likely and easiest way to achieve rapid economic development in China at that time.

The growth of China's economy has brought a very hot word today -- the escalation of consumption and the upgrading of consumption. The deeper meaning is that the era of replication has passed. Whether people or enterprises or countries, it is easy to rely on the path. Therefore, from copying to independent innovation is bound to be a very painful process. But enterprises that do not walk on the path of independent innovation will only die slowly, which is also true for the country.

epilogue

Every age has its own gameplay in every era. In the past China, replication is the most effective way to play, and so is China. Therefore, BELLE's initial choice is right.