How Does Kappa Seize The Tuyere To Revive The Tide Movement?

After several years of downturn, the Kappa, the trend sport brand that once used to fire all over the streets and back, began to return to people's sight.

The interim results report released by the Kappa parent company in China shows that the company's revenue during the period was 772 million yuan, up 14.4%, and gross profit 451 million yuan, up 9.2% from the 413 million yuan in the same period last year.

According to the earnings report, revenue growth in the first half of 2018 was mainly due to the good performance of the Chinese market and the narrowing of the losses in the Japanese market.

It is the first semi annual report of the company to catch up with the trend of Kappa in 2017, and more importantly, it is also a result test of Kappa after upgrading from shop to product.

In 2017, Kappa began to focus on all kinds of "collusion" single products and began to use various cross-border cooperation to cut into the fashion trend.

On the occasion of the 100th anniversary establishment of the brand, Kappa invited Mr. Zhi long to endorse it, and began a series of regression through the various cross-border and joint cooperation.

At the beginning of 2018, with the help of Paris fashion week, Kappa jointly launched a new "Cang Shi series" of Japanese designer Cang Shi Yi Shu, which was also pre sold on Tmall.

In addition to being the music singer VAVA of Kappa trend ambassadors, CLOT trend KevinPoon, Japanese GR8 principal KUBO Kubo Mitsuhiro and founder of the French local trend team La MJC also appeared in this event.

After the taste of sweetness, in October 2018, Tmall's "double 11" preheating stage, Kappa also participated in the Tmall Fashion Festival, played a Kappa sharp cargo series and BANDA new series of show.

According to the data provided by China's trend, Kappa has created a successful sales case with limited product sold out in 1 hours and the cumulative sales of all products within 80% days in 1 days, under the series of actions such as "collusion" and the launch of various cross-border joint names.

"Collusion" and joint names can easily lead to sales of related products as long as they become hot topics in the market.

Since last autumn, basically, we have about 20%-30% of our turnover, all of which are "collusion" products.

China's trend CEO Zhang Zhiyong said in an interview with lazy bear sports.

In 2018, Kappa successfully entered the "2018 strongest Logo list in the streets of the world" announced by Lyst, the fashion trend data platform. The list also included Supreme, Prada, LouisVuitton and other fashion trends or luxury brands.

It is easy to see from Kappa's new flagship series of "collusion" products and the introduction of various cross-border joint names that China's trend is catering to the continuous growth trend of tide brand consumption under the background of global fashion consumption upgrading.

"We find that more young consumers are moving from buying a single, functional sports product to buying products that represent their ideology, lifestyle and personalization," Chen Chen, executive director and co president of China trend, told loo sports. "The story behind the product and attitude towards life are the main factors for their purchase."

In March 2018, Nielsen combined with OFashion fan orange released "tide brand big data research trend and user analysis report" showed that the growth rate of tide brand consumption was 3.7 times that of the non tidal brand. After 90 and 95, it was the main consumer group, and the proportion of 95 increased gradually to 25%.

According to Reuters survey data, in 2011, the global tide brand market exceeded 60 billion US dollars, reached about 200000000000 US dollars in 2017, and will keep two digit growth year by year.

Many public opinion thinks that behind the tide card is the next trillion market.

As a centenary brand established in Italy in 1916, Kappa has its own characteristics of targeting young consumers and subdividing attributes in the sports and fashion industry itself.

In the 80s of last century, when the tide card concept had not yet appeared, Kappa had integrated the trend of "collusion" into product design. After sponsoring the US track and field team, the "collusion" single product reached its peak.

In retrospect of the Chinese market, Kappa was also popular around the 2008 with the positioning of sports and fashion, which led to a 94% increase in China's revenue in 2007 and a 86% rise in net profit.

At the peak of 2010, the Kappa brand reached 3751 stores in China, and its revenue in China was close to 4 billion 200 million yuan.

But then, along with the disappearance of the Olympic bonus and the return of the market rationality, the problems of channels and inventory in China's sporting goods industry are constantly emerging, and Kappa's revenue in China is also facing a bottleneck.

In reflecting on the challenges encountered in 2011, the Chinese trend saw the disadvantages of the "brand plus wholesale" mode: because the retail channel is not controlled, the sale of products depends entirely on the distributors, so long as they sell the goods wholesale, they form sales.

This situation directly led to the trend of China not having the power to pay attention to the change of the retail side.

"In the past few years, we have taken some detours, which are like following other directions.

But if you want to change, you need to figure out who you are.

Zhang Zhiyong admits, "Kappa began business adjustment in 2017 and entered the stage of commodity operation in 2019. We hope to enter a real stage of strength in 2020."

Therefore, in addition to hoping to achieve the brand recovery through upgrading the product design mode, Zhang Zhiyong pointed out that the first thing for Kappa to do is to integrate the whole channel strategy in the next 5 to 8 years, that is, a set of adjustment strategies from the retail terminal to the supply chain.

Specifically, Kappa's full channel strategy is "a consumer group, not to take two inventory", to integrate online and offline inventory, and to conduct efficient management.

According to Chen Chen, Kappa has opened up the visible inventory between Direct stores in the near future. It can reduce the store inventory pressure through supporting and ordering different stores' orders in different regions.

"Our large cargo cloud storage center can capture the sales and inventory situation in real time to achieve automatic quick replenishment.

This will enhance user experience, avoid user churn and improve inventory turnover.

Under the full channel strategy, the store can drain the stores through the self mentioning method of the store, and combine with all kinds of marketing methods facing the young consumers, it will naturally increase the rate of consumer repeat purchase and the sales of the stores.

Secondly, China's trend is also actively promoting the pformation of shops and upgrading of channel structure.

In 2017, the trend of China began to adjust the terminal shops of Kappa brand.

As of the first half of 2018, the number of Kappa brand stores was reduced to 1439, a decrease of 48 compared with the end of 2017.

"In 2017, Kappa accounted for 10% of the total stores in the shopping center, most of which were in department stores.

But where do young people go to department stores? They are all in the shopping center.

So the structure of this channel is problematic.

Zhang Zhiyong said, "where are the young people, we are going.

For example, if you want to put the store into a place like Beijing and Sanlitun, you can't get in without characteristics.

Relying on the trend of "collusion", we opened the top stores in Yinlin, Hunan's Kowloon warehouse, Beijing's Sanlitun and other landmarks last year.

As shopping experience becomes more and more important to consumers, Kappa begins to integrate brand culture and fashion elements, enhance personalized service, enhance experience concept, and effectively link up with consumers.

Zhang Zhiyong disclosed that under such a move, the effect of upgrading the 45 stores in the first half of 2018 was very significant.

Next, the company will actively shut down and restructure low store efficiency shops, and will open more than 30 head stores in 2019 to ensure that the annual single store efficiency continues to grow.

On the other hand, for young people as the core target consumer group Kappa, in order to better achieve the recommendation of thousands of faces to consumers, in terms of the digitalization of customers, Kappa uses member pools to analyze consumers' preferences for consumption and reading habits, and to release more matching products and marketing content.

Chen Chen said that for different commodities, Kappa has begun to analyze data on consumers' purchases of goods and products for a period of time, and adopt different strategies of new product supply and marketing, and accordingly provide different goods for different stores.

"After a period of data collection and analysis of each store, we will predict the volume of future sales according to the actual sales situation of each store, jump off the traditional order mode, achieve personalized and accurate sales, and achieve the digitalization of stores."

Whether to revive the retro "collusion", or to put forward all channel strategy and digital operation, and then to upgrade and upgrade the concept store, it is to attract more fashionable young consumers.

As for the trend of China, with the Z generation consumers becoming the mainstream, with the explosive growth of tide brand consumption, the Kappa has entered the recovery lane, but it will continue to face challenges.

Piper Jaffray, an investment bank, has been tracking its brand preferences and consumption since 2001. According to a survey published every six months, called "Taking Stock with Teens", street apparel has become a powerful force in the fashion industry in the past few years.

Brands such as Vans and Supreme are closely linked to popular elements such as hip-hop and skateboard, and street clothing's attention to leisure money makes them particularly popular among younger consumers.

At the same time, in order to expand consumer groups, apart from Adidas, Puma and other popular sports brands, outdoor brands such as Columbia, Columbia and Timberland are also pforming themselves to label themselves as "sports trends".

Competition in the whole market is increasing.

In addition, Zhang Zhiyong also put forward his judgement on the macro environment.

"I think we have an advantage over other brands, that is, we are still a minority. The challenge is not that big.

But be careful. We must maintain very fast sensitivity. "

At this stage, driven by fashion stars and fashion culture, Kappa has successfully attracted a lot of strong love for fashion sports, and the attention of young people who like expressing themselves has also gained more market sentiment.

For this, Zhang Zhiyong expressed his confidence. "We are going to be the trend leader and pioneer, attracting more generations of young people with the passion, individuality, publicity spirit and tonality of Kappa."

However, in the current trend of personalized and diversified consumption market, the fine operation of brand is still needed.

If the trend of the tide movement is "sky time", a series of changes that Kappa will make behind the product will ultimately decide where the brand is heading.

This is also a microcosm of the upgrading of Chinese sporting goods companies from manufacturing to brand operation.