How Can We Rebuild Our Image And Win The Favor Of The Millennial Generation?

31st Degree International Limited (hereinafter referred to as "31st degree") released the operation summary of the fourth quarter of 2019 in January 16th. The retail sales of 31st degree main brand products in the fourth quarter of 2019 (calculated at retail value) increased by a low percentage per unit over the same period in 2018; the retail sales of 360 children's brand products in the fourth quarter of 2019 (in retail value) were higher than that in the same period.


Since 2019, under the background of global economic slowdown and regional trade disputes, sportswear industry has been developing vigorously at a strong growth rate, especially in the domestic sports apparel market. For example, in the first half of 2019, the company achieved operating income of 3 billion 240 million yuan, an increase of 7.3% over the same period last year. The profit attributable to equity holders was 367 million yuan, an increase of 9.7% over the same period last year. During the reporting period, the income of the five major plates accounted for 72%, 12% of the children's clothing, 2% of overseas sales, 13% of the electricity suppliers, and ONEWAY. Among them, children's clothing and electricity providers grew better, respectively, up 6.6% and 28.5% compared with the same period last year, while overseas markets showed poor performance in Europe in the same period last year. So the growth rate in 2019 was 41%, but the base was still small. Moreover, after the introduction of ONEWAY, the performance was not satisfactory. The brand was reorganized in 2019 April, and hired a general manager of South Korea to make a new strategy to prepare for the 2022 Winter Olympic Games, which has not made significant contributions at present.


Guo Yuan International analyst Gao Xiang said earlier that 31st degree to change the brand image, seize the young consumers, in the first half of 2019 to create IP series, such as Gundam and Tencent game online cooperation, launched the building and crossing the fire line, has made a good sales reaction. At present, the proportion is still small, but in Gao Xiang's view, the new series first explores the market not aggressive, but also through understanding the IP culture to understand consumers, enhance brand awareness, rather than simple IP replication to achieve the traditional means of sales. At the same time, including the synchronized deployment of basketball into the cell deployment has also started, analysis, the new product revenue growth in the initial stage is not the most important, if we can reverse the consumer, especially the young group of the past brand impression, bring the role of drainage, and through marketing and other means to improve the conversion rate, it can bring long-term brand image promotion and greater profit growth in the future.


The market participants also said that in the 2013-2017 years, the market share of Anta, Lining, XTEP, and 31st four brands remained at around 22%, increasing 5pct to 26% in 2018 compared with the same period last year, and benefited from the continued high economic boom of the sports apparel industry, which was not significantly affected by the downward pressure of the economy. The composite growth of 13.04% in 2013 to 2018 was ranked the top in the apparel sub sectors.


GF Securities researcher Mi Hanjie believes that the high tide of sports apparel industry, on the one hand, has benefited consumers' consumption habits, and more and more consumers are taking sports as part of their daily life. In recent years, the whole sports apparel products are becoming more and more fashionable. Consumers are willing to wear on various occasions. On the other hand, they are also faster than fashion clothes, and the customers are younger and more popular. The investment in marketing is bigger, and the cooperation with the electricity supplier is earlier. It is a good grasp of the needs of the millennial generation (1982-2000 born) consumers. From the perspective of per capita consumption, China's sports apparel consumption per capita is 28.75 dollars / year, Japan is 110.57 dollars / year, the United States is 357.48 dollars / year, the gap is still very large, indicating that the growth of sports apparel industry will continue for a long time.


Mi Hanjie pointed out that with the increasing competition in the industry, clothing brands entering the children's clothing market will accelerate the integration of the industry and help the leading enterprises grow for a long time. Facing the vast market, domestic professional children's wear brands are gradually rising. The international fast fashion brands Zara, H&M, C&A, sports brand NIKE, Adidas, Anta, and 360 degrees are all involved in the domestic children's wear market. With the entry of giant clothing companies, small and medium-sized children's clothing manufacturers will be squeezed, the market share will be carved up by large enterprises, and the competition pattern of the industry will be optimized. Leading enterprises will benefit from the improvement of industry concentration. Therefore, as far as the downstream clothing sector is concerned, it is suggested that the industry should pay attention to the more prosperous subdivision sportswear and children's wear industry leading companies. As we all know, under the weak environment of the whole industry, the fine molecular industry will be differentiated, and the sportswear and children's wear industry will continue to boom. On the one hand, the consumers will pay more attention to the change of the consumption habit of sports, on the other hand, they will benefit more than other clothing categories in catching the most purchasing power of the millennial generation consumers. The latter mainly benefits the younger generation of parents to pay more attention to the safety, comfort and design sense of children's clothing, and the trend of branding is more and more obvious.


Reporters here learned that the relevant statistics show that in 2018, the market size of China's sports footwear industry reached 264 billion 800 million yuan, an increase of 19.5% over the same period last year. Euromonitor expects that the average annual compound growth rate of the industry in 2019-2023 years will reach 110.3%, and the market size will reach 434 billion 600 million yuan by 2023.