Net Profit Plunged 33.5%! 200 Stores A Year, 361 Degrees?

The four brands of Anta, Lining, 361 degree and XTEP have always had the four major sports brands in China, occupying half of the domestic sporting goods industry.

But now that the situation has changed, the four major sports brands of the Chinese mainland have already gone through the same period of progress.

Not long ago, the Hong Kong stock listed company released the 2018 performance report. According to the results of the report, the annual operating income of 361 degrees was only 0.6% yuan to 5 billion 187 million yuan, and the operating profit decreased by 20.8% to 782 million yuan, while the net profit fell 33.5% to 304 million yuan.

According to the results of the remaining three reports, Anta's revenue in 2018 was 24 billion 100 million yuan, up 44.4% over the same period last year. Lining's revenue in 2018 was 10 billion 511 million yuan, up 18.5% over the same period last year. XTEP's revenue in 2018 was 6 billion 383 million yuan, up 25% over the same period last year. Comparison data is not hard to find, the whole 2018 year, revenue stagnation, net profit fell 33.5% of 361 degrees has become the four largest local sports brand in the only left behind.

What's wrong with the "361 degree" love word "one hundred and thirty one?"

One

The founder of the 361 degree is Ding Jiantong, an ordinary farmer in Jinjiang, Fujian. In 1983, Ding Jiantong borrowed 2000 yuan from his relatives and built a shoemaking workshop in his living room. Because it was made by hand, Ding Jiantong only made 5 pairs of shoes every day at the beginning. With the shoe business getting better and better, with the help of the kids, Ding Jian Tong's shoe making factory is getting bigger and bigger.

In 1900, Lining, the sports name "Lining", was created by the "Prince of gymnastics". Perhaps it was inspired by "Lining". In 1994, Ding Jiantong also registered a trademark called "Buick" and changed the company into "Buick shoe industry". Through the relationship, Ding Jiantong also found the coach of the national badminton team Li Yongbo to speak for him.

But it didn't last long. After a while, Buick motor entered the Chinese market, and Ding's Buick shoes were called for change. In 2003, Ding Jiantong officially renamed the "Buick shoe industry" to "361 degrees"!

What Ding Jiantong did not expect was that the brand name changed not only did not affect the sales of shoes, but was more popular with consumers, sales rose straight, and the first year's performance increased by 60%.

At this time, Ding Jiantong who chose to give up the opportunity to give up the chance to the young man in the rush of the current gave Ding Jiantong the son and son-in-law in 2008. Under their leadership, 361 degrees to the development path of modern enterprises, began to develop to the three or four line market, and soon became a famous sports brand in China.

At that time, 361 degrees began to open the country in the speed of opening 3 new stores every day. By March 2009, nearly 6000 stores had been sold. In 2009, 361 degrees were successfully listed in Hongkong, and successfully squeezed into the top three sales of domestic sports shoes.

Two

Speaking of the prosperity of China's local sports brands, it must be said that most of them relied on the golden age of the 2008 Beijing Olympic Games.

At that time, almost all sports brands promoted the demand of the whole market through the way of wholesale sales, thus spawning huge consumption enthusiasm.

As a result, the production end of the brand will flourish, and the sales side will be unimpeded. It will give people a false impression that they can make money just by opening a store, but no one can see any of the disadvantages behind it. It was not until 2011 that the crisis of the whole sports brand industry broke out.

With the gradual disappearance of the Beijing Olympic Games dividends, the market's enthusiasm for the consumption of sports brands began to slow down, and the crisis of sales volume of many sports brands suffered a sharp decline.

And most of the sports brand used wholesale sales mode at this time has become a "chicken ribs", resulting in a large number of products unmarketable, stock seriously urgent. Finally, in this inventory crisis, none of the four top brands in China can be single. For example, the then domestic boss Lining fell into a closed shop trend and opened a three year loss pattern.

Although 361 degrees also suffered a heavy setback in this crisis, fortunately, the layout of children's clothing in 361 degree performed well, helping 361 degrees to bring a precious cash flow to withstand the crisis. It was not until 2014 that 361 degrees regain the growth pattern and successfully went out of the crisis.

In 2017, 361 degrees also surpassed XTEP by 5 billion 158 million, becoming the top three of Chinese sports brand.

Three

Although the weak advantage of 361 degrees in 2017 exceeded that of XTEP as the top three of China's sports brand, the gap between the two and Anta and Lining is also getting farther and farther away.

With the growth of young consumers, the upgrading of brand consumption has become the key to spanformation. In pursuit of more personalized and quality products and brands, 361 degrees and XTEP can not avoid the embarrassment of "Hangzhou guys wearing XTEP blind dates".

But at this point, Anta and Lining have done pretty well. In recent years, Anta has not only acquired high-end brands such as FILA and DESCENTE, but also has promoted its own brand image, and has been doing well in strategy and rhythm. However, "Lining" relied on the "national tide" craze to create "China Lining" and other flag brands, and opened a new era of "national tide" and "billion market".

In contrast, 361 degrees of "local flavor" naturally lost one mainstream consumer. In order to change this phenomenon, 361 degree has also made great efforts to put all the weight on advertising marketing. In recent years, 361 degrees not only sponsored the national swimming team and Sun Yang, but also invited Tan Weiwei and other fashion stars to endorse it. It is reported that there are 14 people in the 361 position of the celebrity spokesperson.

In addition, 361 degrees continue to sponsor various sports events. In 2018, 361 degrees also succeeded in sponsoring the competition team, becoming the first domestic sports brand to sponsor competition in China.

According to reports, the advertising expenditure of 361 degrees spent 557 million yuan in 2018, while the annual revenue was 5 billion 185 million. That is to say, the investment of 361 degrees in advertising accounts for 10.7% of total revenue.

But even so, 361 degrees still failed to penetrate the first tier market. The reason is very simple. 361 degrees really did a lot of homework in marketing, but also invested a lot of money, but the key is 361 degrees still can not find their own crowd positioning. Although the 361 degree has been sponsoring high-end sports events and inviting many celebrity endorsements, it actually does not match the brand's true positioning.

It is understood that the current layout of 361 degrees in China is still dominated by three or four line cities, with more than 65% of the stores located below three lines, while only 8.9% of them are located in the first tier cities. In other words, although 361 degrees have been doing high-end marketing in recent years, the actual consumers who buy 361 degrees are still the three or four tier cities, so the matching effect is not good enough. Therefore, if we want to really touch the users of the first tier cities, we need to work hard on brand positioning and R & D at 361 degree.

In 2019, the war of domestic sporting goods industry will continue to blaze. If 361 degrees can not come up with effective measures in brand positioning, channel spanformation and technology research and development, the future is bound to lose competitiveness, and the farther away it is from rivals.

If business competition is so fierce today, it will be possible to lose everything if it is careless. Only by continuous progress and self cognition can we remain invincible forever.