Hongxingerke'S Anxiety After A Hundred Days Of Popularity

This article is authorized to reprint from: zinc finance and economics, author: Chen Yiting

From a precarious domestic shoe and clothing enterprise to the "red fried chicken", Hongxing Erke only took one day. However, a hundred days later, hongxingerke fell into another kind of anxiety.

On October 29, hongxingerke announced on his micro blog that he would cooperate with Chen Xiaochun to shoot the national style blockbuster "under one man". This is the second time that hongxingerke signed Chen Xiaochun after 20 years. This should have been a good interaction, the heat is just right, the feelings are also in, but there is not much sound under this micro blog.

At the same time, hongxingerke's attention is falling sharply, and those netizens who are clamoring for "wild consumption" disappear. According to the shaking tone data of hongxingerke flagship store, the number of fans increased by - 290000 in 30 days, and nearly 10000 fans dropped every day.

In July this year, hongxingerke donated 50 million yuan of materials for the flood in Henan Province, which caused a lot of discussion. The two emotions of heartache and patriotism are intertwined. The top netizens rush into Hongxing Erke live broadcasting room, Taobao store and offline store for wild consumption. Wu Rongzhao, CEO of Hongxing Erke, rode a bike to the live broadcasting room overnight to persuade netizens to spend rationally.

From Wu Rongzhao riding his bicycle to the live broadcasting room, it took Hongxing Erke only three months to lose 10000 powder a day. Even if Chen Xiaochun, who signed up for the second time, couldn't support an enterprise with his feelings.

The first outbreak of domestic products

In fact, hongxingerke also had brilliant moments.

In the 1980s, with the convenience of Fujian opening to the outside world, Jinjiang people started the OEM business of international sports shoes brands. In this process, Jinjiang people gradually mastered the core shoe-making technology, OEM business entered every household, forming a shoe industry chain.

However, such a low-end competition can not last long. A voice rings from the bottom of Jinjiang people's heart: "it's clear that there are Nike and ADI's technology, so why can we only make them a small income as a OEM?"

As a result, the awareness of independent brand of Jinjiang shoe enterprises was awakened. From 1990 to 2000, hundreds of independent brand shoe enterprises appeared in Jinjiang. Anta, Tebu, 361 ° and other Jinjiang shoe systems supported half of China's sports shoes.

In 2000, Wu Rongguang and his father co founded Hongxing Erke. He took the last bus of Jinjiang entrepreneurial wave, and then caught up with the publicity wave of "TV advertising + star endorsement". At that time, Anta signed Olympic champion Kong Linghui, which increased its revenue by 10 times and exceeded 300 million yuan. Other brands followed suit, such as Xie Tingfeng for special step, Liu Dehua for noble bird, and Jay Chou for Delphi

In 2001, the little-known Hongxing Erke invited "pheasant brother" Chen Xiaochun to speak for the brand. At that time, Chen Xiaochun was popular in the north and south of the river with his works such as the old confused boy, the story of the deer tripod, God save me and calculate your ruthlessness. Chen Xiaochun, cool and rebellious, became a vane of the trend of young people. Hongxing Erke also became the "fashionable shoes" of that time, and its brand awareness rose.

In addition to gathering stars for endorsement, sponsorship of sports events has become a must for strategists in order to lay out relevant subdivision fields and strengthen their own positioning. In 1991, peak sponsored the Bayi basketball team to win the championship, and has since become the pioneer of domestic basketball shoes. In 2007, hongxingerke chose the field of tennis and sponsored a number of top events, and once rose to "the first brand of tennis clothing in China". The commercial value of sponsoring sports events is obvious. In 2006, the revenue of Hongxing Erke was 1.4 billion yuan, and in 2007, it reached 2 billion yuan.

Relying on spokesmen and TV advertisements, hongxingerke's slogan of "to be No.1" is almost well known.

In 2004, hongxingerke's revenue reached 670 million yuan, twice that of Anta at that time. In 2005, hongxingerke successfully listed in Singapore, issuing 120 million shares at a price of S $0.40 per share, and raised a total of S $48 million, equivalent to about RMB 200 million, becoming the first sports brand to be listed overseas in China. Subsequently, Anta, 361 ° and peak were listed in Hong Kong

By 2008, stimulated by the Olympic Games, the scale of China's sporting goods industry has reached 103.9 billion, and hongxingerke has expanded to 7000 stores, 3000 more than ADI. Sports brands were blinded by the prosperity, blindly expanding stores and manufacturing inventory, which also sowed the seeds for the next great rout.

In the 1980s and 1990s, one of the important reasons for the rise of domestic products was that for the market and consumers at that time, the concept was becoming more and more avant-garde, and the aesthetic level was also constantly opening up. However, almost only such domestic brands could be selected in the market. Once the options are available, consumers vote with their feet.

Nike ADI invasion

In 2008, Adidas beat Li Ning with a bid of 1.3 billion yuan and won the sponsorship right of the Beijing Olympic Games, which brought a heavy blow to the domestic products.

At that time, Adidas, 59, had been in China for 11 years. It was also the world's top sporting goods manufacturer, and Nike had been in China for 28 years. Taking the lead in entering the market has brought Nike and Adi congenital advantages. Fans, market, product technology, marketing system and other aspects are more mature than the domestic products at that time. Adidas, with its mature marketing experience, anticipates the problem of overstocking. At the end of 2008, Adidas also set up a "special action team to clear inventory" and reduce the price to inventory in advance. Nike was the same, and the discount was once reduced to 30% or 40%.

On the other hand, the overstock caused by blind expansion during the Olympic Games has brought down a number of domestic brands including hongxingerke. In addition, excessive expansion, improper location, poor management and other issues, after the financial crisis in 2008, the domestic products fell into a very serious inventory crisis. At that time, some people predicted that even if Jinjiang stopped production, the shoes in stock could still be sold for three years.

Li Ning and Anta have broken their arms to survive and closed a large number of distribution stores; On the contrary, Hongxing Erke did not shut down the dealers' stores with poor sales, but provided 800 million yuan of subsidy to maintain its superficial scenery. In 2011, hongxingerke included the 800 million yuan in revenue, which led to the suspension of financial fraud, and the stock market value remained at 290 million US dollars, about 1.88 billion yuan.

After the decline of domestic products, Nike, ADI and other foreign brands took advantage of the situation, and the market share of domestic brands formed a situation of 64. Coupled with Nike ADI's own product technology and NBA star endorsement and other brand premium, a "non Nike ADI don't wear" fashion has formed in China. Even if nike shoes only change color, shoe fans are always willing to enjoy it. They are so surprised that they will make the shoes skyrocketing.

Anta and Li Ning are the only Chinese products that really come out of the inventory crisis and realize brand self-worth.
Anta got rid of the inventory crisis by purchasing Italian brand Filo, and then its market value soared all the way, becoming the first echelon of domestic products. On June 29, the total market value of Anta Sports reached HK $502.3 billion, surpassing Adidas and becoming the second largest sports brand in the world. Li Ning, on the other hand, borrowed the east wind of the national trend to make her debut at the New York Fashion Week in 2018, becoming a representative of the trend of domestic goods. In 2018, Li Ning's revenue broke through the 10 billion mark for the first time, with a year-on-year increase of 18.44%. Since then, it has maintained a continuous growth trend.
For a long time, due to the extrusion of imported products such as Nike and Adi, domestic sports brands have not been able to develop healthily. In addition to Li Ning and Anta, hongxingerke and guirenniao can only run to the third and fourth tier cities in a low profit and high sales.

Chinese products usher in the second spring?

The Xinjiang cotton incident broke out in April this year, which hit Nike, ADI and other foreign brands. The president of Nike said that the Chinese people no longer prefer global brands. However, with the tide of patriotism, only Li Ning and Anta were able to usher in the second spring of Chinese products.

In July, Henan's disaster relief once again triggered a wave of buying domestic goods. This time, the endangered brands such as noble bird and hongxingerke returned to the public view. Feelings of this fire, burning the entire hongxingerke. This is a once-in-a-lifetime opportunity. Hongxing Erke could have fought a beautiful battle to change consumers' perception of the brand.

Silver soul co branded shoes with a monthly sale of 2W

In fact, Hongxing Erke is also trying to change. It has launched a joint brand with "under one person", Henan Museum, Qingming shangheyuan and other IP products. It has linked marketing with Xiaomi, and even the CEO himself has marketing on social media. In the flagship store of Hongxing Erke tmall, a pair of silver soul women's shoes with the highest sales volume is a pair of silver soul women's shoes. The sales volume of other joint brands ranges from 1000 to 8000. Compared with the sales volume of tens of thousands in Anta and Li Ning stores, Hongxing Erke is somewhat pitiful. In addition, according to the data of feigua, Hongxing Erke's sales of 55 live broadcasts in the past month amounted to 12.941 million yuan, while that of Li Ning reached 81.585 million yuan. The sales volume of Hongxing Erke in the past month was only 1 / 6 of that of Li Ning.

The loss of 290000 powder in 30 days means that hongxingerke's efforts are far from enough. A lot of people say, come up with a force, but you can't find what you want to buy through the whole store. Those flattering words are mostly "the quality is good enough to last ten years", but few boast of good design. If only from the perspective of Hongxing Erke's products, it is not attractive, which is also the most fatal point.

Nike can conquer the world, in addition to many sports stars, but also thanks to the powerful designers behind.

Designer Zhang Chuanxi's hyperdunk and KD series make him famous; The classic air jordan series was created by designer Tinker Hatfield. Designers' ideas are recognized by consumers, and Nike's products continue to grow. In 2014, ADI spent a lot of money to poach the three major designers of Nike. Nike immediately sued ADI and angrily accused him of "stealing". Designers have become the core role of the two companies.

In product research and development, Nike and Adi have been maintained at 5% - 10%. In contrast, Hongxing Erke invested 10 million yuan in R & D due to the inventory crisis in 2008, accounting for only 0.3% of its revenue. In 2015, it paid attention to the R & D, accounting for 4.8%. In 2016, it fell to 2.7%. Since 2017, hongxingerke has no longer publicized this indicator.

Product design is also a common pain point of domestic sports shoes, can not think of a good-looking shoes, many brands choose to imitate. Samma 2019 new Korean casual sports shoes are exactly the same as ADI's yeezy500; Anta was accused of copying from aj1 to aj6; Hongxingerke's "Qitan" series is also considered to have copied peak's "state pole 2.0".

In the final analysis, hongxingerke's explosion is just an accidental public opinion event, feelings are only catalysts, products are the hard truth. Even if Chen Xiaochun, the "pheasant elder brother", is afraid that it is difficult to eat for a long time.