From Channel Reform To Product Upgrading, Detailed Analysis Of China'S Trend Of Differentiation And Transformation

"The reform process is very hard, but as long as it changes, there will always be opportunities." In the fourth lazy bear sports and sports industry carnival, China trend CEO and President Zhang Zhiyong said.

In Zhang Zhiyong's view, the whole 2019 is still in a very big reform period, whether for the Kappa brand or for the whole China trend group.

At the end of November, China's trend had just released its mid 2019 earnings report. According to the financial report, China's revenue reached 899 million yuan in the 6 months ended September 30, 2019, an increase of 14.2% compared with the same period last year. Gross profit was 561 million yuan, an increase of 23.8% over the same period last year, and the net profit of the company's equity holders should be 188 million yuan, up 36.2% over the same period last year.

According to Zhang Zhiyong, China has formed the three major brands of Kappa, MIZUNO and Phenix in China and Japan.

According to the 2019 semi annual report of China's trend, the total sales volume of the group's main business Kappa brand business during the reporting period is 749 million yuan, up 111 million yuan over the previous period, compared with the previous period's sales volume of 638 million yuan. In the Japanese segment, the sales volume of the Japanese division was 150 million yuan during the reporting period, and the sales volume was 149 million yuan in the past period.

As for the growth of China's market performance, the main reasons for China's trend are as follows: "channel optimization", "brand led", "shopping center channel", "online and offline" and other key words. These key words are also the main points of China's 2019 trend.

Zhang Zhiyong introduced to lazy bear sports that China's main task this year is channel reform, which includes three major strategies:

1. Changes in sales policy

From the traditional dealer wholesale mode to the direct logistics mode of "big logistics". This is also a reform strategy that China has been implementing in recent years. It can enhance the sensitivity and control power of the group to the consumer terminal by controlling the whole market process of listing, promotion and delisting.

Zhang Zhiyong disclosed that at present, China's new line of replenishment orders for goods in the next line stores can deliver goods in about 72 hours, which will be allocated by 4 warehouses throughout the country. The reverse logistics return order can be completed within 9 days. In the future, the trend of China hopes to further speed up the circulation of logistics.

In addition, for China's regional market sales staff, the Chinese trend started the reform of sales personnel localization this year, no longer used the way of "sending salesmen to all parts of the country by headquarters," but rather appointing salesmen who are familiar with the local market.

Two. Adjust the proportion of distribution channels.

As of the second quarter of fiscal year 2019, the number of Kappa brands in China's offline stores was 1176 (excluding Kappa children's clothing business and Japanese business), a net decrease of 33 compared to the first quarter of this year. China said in its earnings report that the group will continue to intensify its efforts to shut down inefficient shops, focusing on e-commerce, OLE and shopping mall channels.

Turning to the target of adjusting the proportion of distribution channels, Zhang Zhiyong said: "at present, the ole channel accounts for about 19% of the total channel of the group. Our goal is to grow to 25% in 2020. The proportion of shopping center channels is currently around 24%, which will account for more than 50% next year. And the proportion of traditional street shops, sports mall, department stores and other channels should be reduced.

Three. Building head shop

As shopping experience is becoming more and more important to consumers, Kappa has started to enhance personalized service from offline stores in 2018. In order to enhance the shopping experience, the distance between consumers and consumers is effectively reduced. In an interview with lazy bear sports, Zhang Zhiyong said that in 2019, he hoped to open more than 30 Chinese Kappa brand head shops.

Where are the young people, we are going. Now you want to drive the store into a place like Beijing and Sanlitun. You can't get in without characteristics. " Zhang Zhiyong said.

As for the time node to complete the channel reform, Zhang Zhiyong said that China's trend will be completed within 18 months. With the gradual progress of channel reform, the focus of China's trend will shift from channel to product.

From the earnings report, we can see that the growth of single store growth under the trend of China has declined. And Zhang Zhiyong admits: "our current single store growth momentum is insufficient, the most fundamental reason is the product."

At present, China's trend is recombing the product positioning for the Kappa brand. In the future, Kappa brand will focus on enhancing the functionality of its products while maintaining its fashion elements.

"We used to emphasize the trend movement, but we are too far away from the sport itself. When we go to the boundary between sports and the trend, we will find that our competitors have become another group of brands. This is not a good thing." Zhang Zhiyong said, "in the future, we will reduce product lines and make products more centralized, more refined and more topic specific."

Around the three major brands of China, Kappa, MIZUNO and Phenix, Zhang Zhiyong also expounded the three main strategies of China's future brand strategy:

　　 First, wake up consumer memories.

"Whether Kappa or MIZUNO, these two international brands have entered the Chinese market many years ago. For these two brands that hope to revive in China, China hopes to implement a series of marketing activities to arouse consumer awareness and enhance brand awareness in the minds of consumers.

　 Two. Cross boundary hugging traffic

"In the short term, the growth of Kappa brand will require external traffic. Kappa signed this year's traffic artist Huang Zitao as a good example. In the future, in addition to traditional cross border marketing methods such as signing artists and joint names, China's trend is also looking for opportunities for young people interested in such areas as competition and hip hop.

　 Three. Product topic.

"When the product's topic is well done, it will naturally attract many consumers. Consumer buying behavior is now becoming less and less because of your cheap price, but rather from product topics, stories and design.

　　 For the future of China's sports equipment market, Zhang Zhiyong judged that the average annual growth rate will be around 10%. And in such a sunrise industry, which is growing faster than the average annual growth rate of China's GDP, adhering to a differentiated market strategy is the main direction of China's future.

"You have to see clearly which market you are doing in such a big market. It is no problem to select a subdivision area, and fear that what you are not, will eventually be eaten by other subdivision brands. Zhang Zhiyong said.