360 Degrees Were Negative Ratings, Multiple Problems With The Battle, How To Break Through?

In the traditional sports industry, as a domestic sports brand, the 360 degree International Limited (01361-HK) has only been used for six years from the establishment of the brand to the listing.

Recently, however, many factors have affected the audience.

Due to slow growth in revenue, limited profitability, uncertainty in cash flow, and fake brushing orders, which had been questioned by consumers, the development of the company was hindered.

In the face of multiple obstacles, how will it break through?

A reporter from the Finance Union interviewed 316 stakeholders about how the company looked at the current problems and how to restore market confidence in the future.

360 degrees indicated that the company is now announces its 2018 full year performance and is now in a period of silence.

When Anta acquired a large number of foreign brands on a large scale, the group also concentrated on three or four tier cities, specializing in low-end markets.

360 degrees has lagged behind in enhancing brand image and brand premium.

Besides the brand, the business sector is not competitive in the current market environment, and the enormous pressure of the channel is also a problem to be considered.

The fourth quarter of 2018, which was released in 31st degree, announced that the quarter's performance was less than expected.

According to the announcement, the retail sales of the main brand of the brand were flat compared with the same period in 2017, while the children's wear brands had a low double-digit percentage increase.

Flat and low growth, the performance was the lowest growth rate in the past four years.

In the latest earnings warning bulletin, 360 degrees said that the reduction in supplementary orders was due to the relatively conservative consumption desire of the Chinese people for non Essentials (such as the group's products).

However, contrary to the 31st degree view, the industry data released by the National Bureau of statistics in January showed that the total output and added value of sports goods and related products accounted for the largest proportion in the whole internal structure of sports, which were 1 trillion and 350 billion 920 million yuan and 326 billion 460 million yuan respectively, with the growth rates of 12.9% and 14% respectively.

Although the data in 2018 are still unknown, the sports industry is still growing in the latest report on Industrial Enterprises above Designated Size in 2018.

The performance of competing products also confirms the growth trend of the industry.

For a long time, Anta, Lining, XTEP and 31st degree occupied the half of the domestic sporting goods industry.

However, since the second half of 2018, the distance between the 31st degree and the first three has been gradually enlarged.

XTEP announced its earnings preview in January 22nd, saying that the net profit margin of equity holders should increase by 50% - 60% compared with 2017, which is in sharp contrast to the 360 degree earnings warning notice.

As of February 25th, XTEP's current stock market value was HK $11 billion 441 million, and Anta sports and Lining's market capitalization were 116 billion 525 million yuan and 23 billion 17 million yuan respectively.

As the fourth place, the market value has dropped to 3 billion 225 million yuan.

In addition, how to reshape the brand is also a matter of concern.

If the financial situation is poor, it is one of the results of the 31st degree.

So for the whole 360 degree, the biggest difficulties are the difficulties in brand pformation and fake management.

Since the second half of 2018, the brand remodeling plan has been launched.

The company's argument is to better meet the changing needs of target consumers.

Changing the low price and low end impression is the main reason why we want to rebuild the brand gradually.

But from the layout of the store, we can see that most of the layout is located in the three or four line or below cities in the future. It is very difficult to change the brand positioning in the short term in one or two years.

It is understood that the current layout of the 31st degree in the domestic layout of the three or four line cities, more than 65% of the stores are located in the three line or below cities, only 8.9% of them are located in the first tier cities.

Brand adjustment takes time, but the reputation of the 361 brand has begun to be ignored by the market, especially in a number of media.

In 2018, double eleven, many consumers who bought a 360 degree product said they were told that they were out of stock after ordering, they were deceived and sold.

According to the 31st degree announced, Tmall flagship store's single store sales exceeded 100 million yuan, but no matter sports outdoor TOP10 brand ranking or shoes brand TOP10 ranking, there was no 360 degree figure.

And the layout of erroneous strategy is more wrong than wrong.

In the past two years, both sales and profits have continued to run, with a net profit of 335 million yuan, up 5.3% from the 318 million 200 thousand yuan in the first half of 2017.

Public information shows that in 2017, the gross domestic product rate of the four major sports brands was 45.6%, and Anta and Lining were above average. XTEP also earned 20.9% in the first half of the year.

In the past five years, the core of the huge gap between Anta and Lining was the strategic error of 31st.

According to the sales channel of 360 degree, the company is still in the traditional distribution and sales mode, which is not in line with the current market environment, and will also face cost pressures.

According to the financial report, the 360 degree group is a large distribution network composed of about 7000 retail stores managed by 31 exclusive distributors and nearly 1600 licensed retailers.

About 67.1% of the stores are located in three or less cities in China, while 8.9% and 24% stores are located in China's first and second tier cities.

Early campaign brands were developed through provincial agents, regional agents, city agents and distributors. Their main business ideas came from wholesale.

But when the market is saturated, the disadvantages of distribution wholesale mode are beginning to show.

Nike and Adidas went flat through the channel to go to the middle tier, increasing gross margin and quick response capability.

With the decline of market share, declining profitability and the problem of brand influence, what is the future of the 31st degree?