Facing The Competition From Boston, How Should Canadian Goose Go Next?

With the accelerated pace of internationalization, especially in the Chinese market, Canada goose's revenue continues to grow. However, in recent years, Chinese manufacturing has begun to rise, and Chinese consumers no longer believe in international brands. Instead, they begin to favor domestic brands. In the face of the threat of competition from Chinese brands, how should Canada goose go next?

In the second quarter of September 29th, Canada's goose income rose 27.7% to $294 million, up from analysts' expectations of $267 million 300 thousand, gross margin of 54.6%, and net profit rose 21.4% to 49 million 900 thousand yuan over the same period, which also exceeded analysts' expectations.

Thanks to the increase in orders for overcoats and jackets in department stores, Canadian geese wholesale business revenue rose 22.2% to 219 million 800 thousand Canadian dollars, and retail and online business income rose 47% to 74 million 200 thousand yuan a year.

The results showed that Canadian goose sales growth was particularly strong in Asia, and sales in Asia increased from 26 million 600 thousand Canadian dollars to 48 million 900 thousand Canadian dollars, up 83.3% over the same period last year. Sales in the US region increased by 38.5% to $87 million 900 thousand over the same period. Sales in Canada were 91 million 200 thousand Canadian dollars, an increase of 30% over the same period last year. Sales in Europe and other regions were 66 million Canadian dollars, down 3.4% from the same period last year.

In view of the fact that China has become the world's largest luxury market, Dani Reiss, chief executive of Canada goose, has stressed that since the end of the year, the company has opened new stores in Hongkong and Beijing and integrated into the Tmall platform, and Canada goose will continue to expand the Chinese market, especially in the mainland market. It is reported that the brand opened a new store in Shanghai last month. Affected by this, the average selling price of the domestic down jacket brand has risen to 1000 yuan. Canadian geese have lifted the psychological price of Chinese consumers to a certain extent.

However, some analysts believe that for many brands, the Chinese market can be called "goose that lays golden eggs", but when the situation changes, capital market changes and other factors add uncertainty to the canadian goose's prospects in the Chinese market.

Now in China, with the rise of domestic goods, consumers no longer believe in international brands, but begin to favor domestic brands. Take Bosideng as an example, on November 11th this year, Bosideng Tmall flagship store sales exceeded 650 million yuan, an increase of 58% over the same period last year, sales of the whole network exceeded 800 million yuan, and total channel sales exceeded 1 billion yuan, an increase of 37% over the same period last year. Bosideng Tmall flagship store sells the first place in the Chinese clothing brand.

China Commercial Daily reporter noted that the market position of Canada geese and Bosideng is different, but from the recent situation, Bosideng has begun to layout high-end market. With the upgrading of domestic brands, Canadian geese will face more competitive pressures in the future.

Because the output of Canadian geese is not high, the fake market in the market is rampant, which also affects Canada goose's revenue to a certain extent. In addition to counterfeit goods, Canadian geese also face greater moral hazard. Canadian goose has been protested by animal protection organizations for the use of animal fur.

It is understood that this year, Canada goose in London, England again suffered by the Peta Peta protest, the police had to deploy the police force to maintain order, to ensure that the needs of consumers can enter the shop.

Perhaps to avoid similar risks, Canadian geese are actively extending their products to winter products, adding rain gear and light jackets. At the end of last year, Canadian geese bought Baffin Inc., a boot maker at $32 million 500 thousand, and began to enter the shoe business.

Despite the good performance of Canadian geese, Dani Reiss warns that the wholesale business of the third quarter is due to the fact that the delivery time of Parker coats and jackets is earlier than usual. The wholesale revenue in the quarter will be reduced by about 15%.

In addition, Jonathan Sinclair, chief financial officer of Canada goose, believes that although Canada's geese are strong in the first half of the fiscal year, the trend may not last until the second half of the year. Canadian geese predict that the company's sales growth in the next three years will slow to about 20% every year, less than 28% of market expectations.

It is undeniable that Canadian geese are faced with competition threats from Bosideng and their own risks of counterfeit goods and moral hazard.