Leading The "Jinjiang Model", Creating 30 Billion In 5 Years, It Depends On Him!

China trend company, which was split from Li Ning Co in 2005, became the general agent of Kappa in mainland China and Macao. At that time, the price just split out was only RMB 34 million yuan, but when it was listed in Hongkong in 2008, its stock market value reached 30 billion yuan, and increased by 1000 times in two or three years. Although it had never produced one garment, it has become the largest company in the market of Chinese clothing industry. It can be said that the growth rate is amazing.

What is more frightening is its profit margin, its gross profit rate has reached 62% astonishing figures.

Unlike other vertically integrated industries, China's production link outsourcing and retail links have also been handed over to nearly 50 dealers nationwide.

Production and sales, the two traditional enterprises are most dependent on, and can create a lot of important links of profits, but China's trend has become a shopkeeper. So where does its high gross profit rate come from?

1, "bring" brand, brand dealers and agents are all concerned.

Speaking of the trend of China, we have to say its background.

In 2001, Li Ning Co entered the stage of comprehensive strategic adjustment. Under the leadership of general manager Chen Yihong, the subsidiary company of Beijing (China trend predecessor) was established. Its development strategy is multi brand agency for international sportswear.

Become the first agent brand.

Why did Li Ning Co sell the Chinese trend later?

One of the claims is that Li Ning Co, which only owns Kappa agents, worries that they will have an impact on the stability of the company's performance, so they reluctantly give up and sell the Chinese trend.

In addition, in 2005, Li Ning Co made strategic adjustments in its business philosophy: vigorously developing its own brand business, developing long-term cooperation with international brands through acquisitions or other products with differentiated and complementary features of the company's own brand positioning, and achieving the development goal of Li Ning Co's multi brand business.

Kappa is basically the same as Lining's product market positioning, and the BasicNet group is unwilling to sign a long-term cooperation agreement or takeover agreement, which ultimately led to the decision of Li Ning Co to abandon the exclusive agency of Kappa brand in the Chinese market, while Chen Yihong chose to take over the trend of Beijing.

In June 2005, after consulting with the BasicNet group, Lining pferred his 80% stake in the Beijing trend company (the exclusive Kappa brand exclusive right) to Shanghai Titan, at 8 million 614 thousand yuan.

General manager Chen Yihong became the actual controller of Kappa China's agency power.

In September 1, 2005, Chen Yihong resigned from the Li Ning Co board to fully and independently operate the Beijing trend.

Chen Yihong, who took over China's power, is also facing this hidden danger.

But for 5 years of brand agency agreement, Chen Yihong and Italian company are counting on each other.

On the one hand, in order to promote sales, agents usually invest a lot of energy in R & D, channels and markets, but short-term agreements make him reluctant to make long-term plans.

On the other hand, the Licensor often worries about the predatory exploitation of the partners and destroys the image of the brand.

This distrust keeps the two sides searching for the balance of cooperation.

2, buy a brand with 90% of capital. Is this deal cost-effective?

Chen Yihong hopes to have brand value for a long time, and now this opportunity has finally let him wait.

At the end of 2005, the cash flow situation of Kappa group parent company BasicNet group was poor. Chen Yihong, who had just bought the Beijing trend, flew to Italy with general manager Qin Dazhong to discuss the acquisition of Kappa brand.

Although at that time

The annual turnover in China is only 1. 3 billion yuan, but Chen Yihong is very determined.

In the end, they bought the brand ownership and permanent management rights of Kappa in mainland China and Macao at a price of 35 million US dollars.

Morgan Stanley provided us $38 million as a strategic investor and gained a 20% stake in Beijing.

They worked hard to finance so much money, just a few weeks, 90% of the funds went to someone else to buy a brand, such a thing is too bad, absolutely not, I believe this is the real idea of many entrepreneurs.

But this is precisely the very professional or very brilliant embodiment of China's movements.

Why does the company do not contain production and retail links? Gross profit margins can reach an astonishing 62%, because it has found a support point and grasped the "control power" - the permanent use right of Italy Kappa brand China.

In this way, not only can the business be sustainable for a long time, but it also gets rid of the passive situation of "mammy business", because it can control China's business for a long time, and the capital market value of China trend company can also be fully developed.

3, the product position strongly opposed by the dealer, but out of a blue sea.

In marketing, what we repeatedly emphasize is a differentiation. The differentiation of Kappa is the integration of fashion elements into traditional sportswear, and this is the subversive product innovation.

It stands out in the fierce competition of sports brand.

Thus opening up a new blue ocean.

The four main words of this sport fashion product are sports, fashion, sex appeal and taste.

Its location is those who claim to exercise but never exercise, those who want to feel athletic but do not want to sweat.

For example, some business people are its typical target customers. These people are irregular in their work and life. They all have three high levels. They should exercise more, but basically there are various reasons for never exercising.

Kappa found the needs of these customer groups, and then developed in depth, and achieved rapid growth, even far beyond the growth they had originally envisaged.

Kaapa made such a major disruptive breakthrough, but the result was not smooth.

China trend company's clothing has been sold through distributors, so when it turned the sports money into a fashion item, dealers were anxious, and to what extent did they rush? The dealers said, "we each give you 1 million, and you don't do it because you can not only drag yourself down, but it may even drag our dealers down."

Dealers have such a reaction, it can only show that it is really desperate for this product.

The trend of China has to make a very big decision. In the past, sportswear was sold on credit. (first you take it back and sell it, you can pay it in a month, but if you can't sell it, the responsibility is the dealer.)

Kappa in order to allow dealers to accept the new fashion sportswear, it has been changed to "consignment sale" (I can supply it to you, not sell it, and you give it back to me). The risk of inventory is not borne by the distributor, but all by the China trend company.

After the breakthroughs in this sales way, the new fashion sportswear that China is moving towards is finally available for sale.

Nowadays, when it comes to sports brand, Jinjiang brand is basically the same.

On this small land in Jinjiang, a large number of ambitious sports brands such as Anta, 31st degree, Hongxing Erke, Golden Lake, XTEP, Jordan, Kang Tai, Lu You and de Erhui have been born.

In addition to catching up with the tide of the new era of the early Chinese people, these Jinjiang brands, in the marketing of sporting goods, "Jinjiang mode" is a great occasion.

The success of the Jinjiang brand has much to do with the manufacturing base of Chinese sports shoes and clothing. Because of the advantages of manufacturing, consumers can buy higher quality products at the lowest price and make Jinjiang brand stand out in the market.

What is "

"

First, we should adopt the vertical integration strategy, namely the integration of research, production and marketing, from the front-end R & D, parts production and assembly, and then to marketing, retailing and service integration; the advantage of vertical integration lies in that we can grasp product quality, effectively control the operating cost, and increase the competitiveness of products in the market.

But the drawback lies in the typical heavy asset mode, which requires high management of the capital chain and the management of the entire enterprise.

In terms of management and management, there is no way to achieve excellence in one aspect.

Second, instead of competing with foreign brands to fight big cities, instead of monopolized stores in two or three tier cities, large Chinese middle-income consumer groups are taken as market groups.

Third, pay attention to brand building and bring 10% profits into advertising. In the five sets of CCTV, a large number of advertisements have become part of the "Jinjiang model". Besides that, they signed contracts with famous sports stars and expanded their popularity through the public influence of sports stars.

Fourth, invest tens of millions of R & D products and update production equipment every year.

But, and "

"One ratio, Kappa's light asset mode is better.

The light asset mode is also the business mode of the international mainstream sports brands such as ADI, Nike and other brands.

Only the two ends of the smile curve are R & D and brand, and the intermediate and lowest value-added production links are outsourced to the foundries.

The trend of China is such a typical light asset company. The company has only a few hundred employees at its most. The headquarters is located in a small building in the Yizhuang Development Zone of Beijing. Most employees of the company are engaged in design, brand operation, and channel services.

In the eyes of many people, there is an important link in the operation and operation of enterprises, that is, the control of fixed assets and materials such as plant and equipment. This link is self-evident to enterprises.

However, in the value chain, production and assembly is the lowest value creation.

China's trend will occupy a large number of capital production outsourcing, retail links are also handed over to distributors everywhere, and the resources and energy are concentrated on R & D, brand these high value-added links, the advantage is that we can achieve product innovation leading and brand shaping closer to consumers, allowing enterprises to obtain rapid speed and get a higher gross profit margin.

5, multi brand development, positioning brand operators

In the brand development mode, China's trend is different from the brand development mode such as Lining and Anta, which is to expand the product line to meet the needs of different consumers, so as to enhance and strengthen the independent brand, but seek to develop the brand.

Brand globalization and multi brand layout in Chinese market.

In 2008, China moved to acquire a Japanese company, which owns the distribution rights of Kappa in Japan.

At the same time, it also bought the Kappa brand's global priority.

Once China wants to buy Kappa global brand, the brand of Kappa will be pferred from Italy to Chinese.

In this way, no matter what the future plan of China is, the initiative and control have been pferred to the trend of China.

In addition, in 2009, China moved to acquire the Japanese Feinikesi brand and enter the field of skiing and navigation professional clothing.

At this time, China's outdoor sports market is entering the process of pformation and upgrading from the low end market to the middle and high-end market. With the continuous expansion of market capacity, the non Nicks positioning high-end market will be more and more loved by professional enthusiasts such as skiing and sailing.

Over the past 30 years, we have been developing China's manufacturing industry, focusing on the foundry of the bottom of the value chain for a long time.

Today, we are facing pformation and upgrading from China to China.

How can we move from the gorgeous pformation of manufacturers to brand operators to the two ends of R & D and marketing at the top of the value chain?

China's trend tells us that we need to buy brands if we lack brand names. If we lack technology, we will introduce technology. If there is no marketing channel, we will adopt joint ventures to enter the international market.

This is a new thinking point for the business model innovation of Chinese enterprises.