A Big Drop In Performance, Can The 360 Degree Ride Through The Throes Of Pition?

A domestic sports brand, once occupying the dominant position in the domestic industry, began a consumption revolution and pformation in 2012, leaving the gap between domestic brands and international giants, and the distance between the leading brands of the state.

Today, Nike and Adi have always taken the lead in the domestic sports brand market. Anta has become the leader of domestic sporting goods companies in the domestic sports brand, while the gap between Lining, 31st degree (01361 - HK), XTEP and Anta is increasing.

In February 14th, it issued a profit warning for fiscal year 2018, which is expected to drop sharply compared with the end of 2017.

For the performance of the financial year in the past fiscal year, it is also very fascinating. The performance in the first half of the year is gratifying, and there has been a sharp decline in the second half of the year.

It is reported that 31st degree hopes to meet the Hong Kong Stock Exchange listing 10th anniversary, through brand remodeling and strategic adjustment to cope with the increasingly fierce competition of domestic sports brands, and sprint billions of revenue targets.

According to the 31st interim report, as of June 30, 2018, the company achieved operating income of 3 billion 16 million yuan (unit the same below), an increase of 7.8% over the same period last year, operating profit of 630 million 600 thousand yuan, an increase of 0.2% over the same period last year, and the profit attributable to equity holders increased from 318 million yuan in the same period last year to 335 million yuan, an increase of 5.3% over the same period last year.

Through the first half of the company's operating data, we can see that the performance of the 31st is quite bright. In the third quarter, the retail sales of main brand products (calculated in retail value) in the company in the three quarter were higher than that in the same period in 2017 (that is, the growth rate in the middle area of the percentage per unit); the retail sales of children's clothing brand products in the three quarter of 2018 (at retail value) had a double-digit percentage increase compared with the same period in 2017 (that is, the slower growth rate in the double digit percentage).

The retail sales of the main brand products in the fourth quarter of 2018 (at retail value) were flat compared with the same period in 2017.

The retail sales of 360 children's brand products in the fourth quarter of 2018 (at retail value) increased by a double digit percentage over the same period in 2017.

In the second half of 2018, the growth rate of sales of core products in the second half of last year was the worst in the past four years.

As a result of the 31st commitment to the brand remolding plan, the overall reduction of orders in 2018, and the continued depreciation of the RMB against the US dollar in 2018, resulted in a loss of exchange. In addition, the advertising business and publicity expenses increased, and the 360 degree e-commerce business had a sharp decline in 2018.

In the second half of the year, a 360% net profit loss also indicated in the announcement that the group expected to lose money in the second half of 2018.

Among them, the consumption intention of the Chinese mainland for non Essentials (such as the group's products) is relatively conservative, so that the replenishment orders are reduced; the group implements logistics management optimization plan within the year and rearranges the delivery schedule.

In addition to the high-end sports brands with the brand competitiveness of ADI and Nike, Anta is the leading brand in the four major local sports brands, and its overall performance and product performance price ratio are even higher.

By contrast, 361 needs more efforts on brand positioning and so on.

From the 31st degree launch in Shanghai, the first series of "broken shell" products of M1 degree RO, which are co operating with STAPLE DESIGN, a famous design studio in New York, show that the slogans, designs, visual effects and ways of communication with different past qualities show the determination to rebuild their brand image.

Can reinventing brand really promote the smooth pformation of the 31st degree and realize the ten billion marketing plan?

By issuing a profit warning at 31st degree, we can see that reshaping the brand image is one of the reasons leading to a decline in net profit.

According to the financial community, finding the right relationship between product positioning and target consumer groups is the top priority for its pformation.

From the perspective of development strategy, it has been sponsoring all kinds of sports events in the 15 years since the establishment of the 361 degree term. It first became a senior partner of the Guangzhou Asian Games and a senior partner of the Asian Olympic Games in 2010. Then it was a senior partner of the Shenzhen World University Games in 2011 and a senior partner of the 2012 Asian Beach Games.

From 361 degrees in 2014 to the international market, it has become a senior partner of the Inchon Asian Games and a senior partner of the 2014 World Youth Olympic Games. In 2016, it became the official partner of Rio Olympic Games and the official partner of Jakarta Asian Games this year.

Previously, Wang Lei, general manager of the 361 degree brand business management center, once said, "our target consumers are young people who love sports at the age of 16-28, but our actual consumers are low-income groups in the three or four line cities".

In this way, the 361 degree sponsorship of high-end sports events is not consistent with the actual positioning of the brand, and sponsorship of brand sports events also does not bring substantial help to its revenue and profit growth, but rather a big expenditure.

In short, the real consumer group can not be found at 360 degrees, so that it can clarify its own business capabilities and make a good brand strategy plan.