Cave Shoes Crocs Find "Follow" Test Water Diversification &Nbsp; Vitality Revival

The ugly shoes, which are all holes, are now pformed into one.

In early 2012, Crocs, the American leisure shoe brand, was launched in China.

The company, founded in 2002, has always challenged the definition of beauty in fashion by virtue of the iconic design of "cave shoes".

But in a short span of 7 years, it sold 100 million pairs of "ugly shoes", and Crocs (CROX. NASDAQ) listed in 2006 to raise more than 200 million US dollars, proving that the innovation of another way can also be recognized by consumers.

However, a sudden

At that time, Crocs basically sold only "ugly shoes" in China. The single style not only caused the product to be unsalable, the stock was overloaded, but also sprouted all kinds of other problems.

"We must make breakthroughs in the diversification of products."

Under the efforts of Li Tun and his team, Crocs has launched series of brands such as Ocean Minded, You By Crocs, Crocs Golf, Crocs Work Shoes in China, and the category of products extends from the original "ugly shoes" to canvas shoes, casual leather shoes, golf shoes, and even the present high heels.

At present, Crocs has grown from a single shoemaking company to launch more than 300 shoe style brands every quarter.

Today, Crocs has entered the "one billion club" - its sales performance for the first time in 2011 reached US $1 billion.

Compared with similar products, Nike, which took 22 years to achieve this sales figure, the development of Crocs is undoubtedly swift and violent.

However, with what to support such a huge new product design, how does the company manage inventory and arrange production, all of which test the endurance and patience of the young company.

Save ugly shoes

The entry of high-heeled shoes actually dates back to 2007 - just realized.

Large acquisitions did not yield corresponding returns.

Very quickly, the aggressive acquisition resulted in a sharp fall in Crocs book profits.

According to Crocs earnings report, gross profit of Crocs in 2008 was $234 million and gross margin was 32.4%.

In 2007, the gross profit margin of Crocs was 58.7%.

What's more, the successive financial tsunami not only caused the European and American economy to enter the cold winter, but also made the first loss for Crocs.

In 2008, Crocs recorded a net loss of $185 million 100 thousand, a diluted loss of $2.24 per share, announced a layoff of 2000 people, and the company's share price plunged 76%.

In addition, Crocs's sports apparel business in 2007 was quickly declared a failure and the heels were suspended.

In response to the impact of the economic crisis, Crocs adjusted the direction of diversified development in 2009: while strengthening the company's stock sales, it also accelerated the frequency of product design.

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"When the environment is bad, we usually think of saving money, but when we come up, we have to think about which way to swim, which is more important."

Prior to joining Crocs China, Li had worked in many multinational companies including HP, Flextronics and Plantronics. However, he had never encountered any more difficult problems than Crocs at that time: slow sales and large inventories, and more importantly, the company's ability to allocate a lot of investment was not enough, which caused Li Tun a lot of trouble.

At the end of 2008, the US headquarters decided to recover the brand authorization and set up its own sales company, Carlo Commerce (Shanghai) Limited, and adjusted the dealer policy.

"In the past, people only knew about cave shoes and didn't know about Crocs, so we decided to put the only investment in the development and brand image of the shops."

In the first half of his tenure, Li was mixed with Crocs China's marketing team almost every day, recombing the sales channel of the brand, adjusting the sales network, unifying the location of the first tier cities, and expanding the market scale of the two or three tier cities.

Crocs search for "heel": $one billion dilemma

In 2009, total Crocs revenue fell 10.5% to $645 million 800 thousand, but total revenue in Asia increased 15.9% from 2008 to $237 million 500 thousand.

"In the past year, we have made a series of major changes in the operation of the company, thereby stabilizing our business and improving the company's business prospects."

At that time, Crocs chairman and chief executive officer John Duerden said that in the short term, Crocs will still focus on developing high-end products. "At the same time, we also strengthened our core business and laid the foundation for better prospects."

Obviously, diversification is not the focus of the development of Crocs at that time, so Crocs high heels also stop China.

Reengineering diversification

The popularity of Crocs depends entirely on a pair of "ugly shoes". But because of these "ugly shoes", Crocs is forced to embark on the road of diversification too early.

It is understood that the success of "ugly shoes" lies in a special resin material called Croslite, which is the research achievement of Dow chemistry.

But ironically, Dow did not get much benefit, because after developing Croslite material, Dow did not value its value.

Just as Crocs became popular, problems began to emerge.

On the one hand, because the Croslite material is very wearable, the life of a pair of "ugly shoes" can last for ten years, which greatly dampen the renewal intention of buyers. On the other hand, a large number of "cottage shoes" have begun to appear in the market. They not only make Crocs lose market share, but more importantly, the whole consumer market is rapidly saturated.

Li Tun said the counterfeiting problem is not just existing in China.

As a result, the high-heeled shoes series is a representative of diversified development, first launched in the US market and then entered China.

Crocs, director of operations in China, Lingjie said, "at the beginning, Crocs focused on" comfort "instead of pushing the project on a large scale.

But there was a very big change from 2007 to 2012. We have more and more shoes, and more and more styles, because we feel that we can't rely on a pair of shoes, and those shoes are only suitable for summer. There will be defects in spring, autumn and winter. So we started to start some relatively casual money, including canvas shoes and some comfortable and leather shoes. We all started to do so.

Gradually, diversified expansion began to be accepted by Chinese consumers.

In this regard, Ling Jie said, "but if you jump from a big shoe to a series of high-heeled shoes, then customers of high-heeled shoes will not normally run to our store to buy shoes, so this is a gradual process."

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It is understood that high heels are priced at around 1000 yuan in China, but their traditional shoes are

Revival of vitality

At present, sales of Crocs casual cloth shoes have surpassed traditional rubber shoes and become the largest sales category of Crocs.

In addition, Crocs has signed up with manufacturers around the world to produce socks, clothing, sunglasses and accessories.

In April, Crocs will launch children's clothing in 46 countries across the world through wholesale and retail channels. In May, sunglasses and accessories from King Eye will also be listed in the United States and Canada.

"(create) comfortable, light and very enjoyable products, this is our brand's DNA, which will not change in the next few years.

Brand will also expand on the basis of DNA.

This is a road we have always been taking. "

Li Tun deeply recognized this.

In 2011, Crocs revenue increased from $789 million 700 thousand in 2010 to $1 billion, while the net profit in 2011 rose from US $67 million 700 thousand last year to US $112 million 800 thousand, and gross profit was US $536 million 400 thousand, accounting for 53.6% of sales in 2010.

In China, during the peak season, 50 square meters of Crocs retail store can sell more than 200 pairs of shoes in Li Tun's view. Crocs can maintain a higher gross margin because of its effective control over design cost and production cost.

It is understood that within the Crocs company, the new product usually takes nearly 18 months from the initial idea to the final listing.

Crocs put the design team in Europe, and every quarter will put forward a design inspiration. After the initial discussion, Crocs will make different samples or shoes models for the discussion and discussion of the product department's team, then there will be some more specific products.

"After the product structure is basically settled, we will open the order half a year in advance. After the dealer gives the opinion, we will make some modifications, make some orders and sales forecasts, and then we can first give some futures orders to the factory, and the factory can purchase raw materials, mould mold arrangement and production arrangement according to these futures orders."

Ling Jie said so.

In addition, Crocs will also implement a replenishment strategy for some of the main products. "Through the prediction of the main products, the factory can be given some flexibility to us.

Once the product is sold better than expected, the factory will be able to supply it within 1 months.

Ling Jie said.

Ling Jie said that at present, Crocs has about five or six OEM in the country.