Can "Olympic Style" Drive Away High Inventory? Sports Brand Starts Marketing War Again

The Olympic Games drive the sales of sports goods

The high growth of 30% to 50% of sports goods every year has passed, and the high inventory crisis has become a problem for every Chinese sports goods company

It seems that the practice of increasing profits by continuously opening stores has come to an end, and the speed of opening stores of major sporting goods companies has slowed down significantly

The three-day Dragon Boat Festival holiday left Lu Tao, a sports goods store guide, breathless. His long lost busyness made him tired and happy.

This year is the year of the Olympic Games. Four years ago, the sales performance during the Beijing Olympic Games rose in a straight line, which is still fresh in Lu Tao's memory. This year, the pressure of high inventory has been bothering them. They hope that the London Olympic Games can boost their sales. However, sales have been tepid until the Dragon Boat Festival. For this reason, he complained that the advertisement for Olympic promotion in his store came too late. But Lu Tao constantly comforted himself and his colleagues: "Every day during the half month of the Olympic Games, business will be as good as the Dragon Boat Festival."

With the Olympic Games approaching, all major sporting goods brand When the Olympic marketing war started one after another and the high inventory pressure and channel expansion were blocked, betting on Olympic marketing was the common choice of domestic sporting goods enterprises. But whether the expensive Olympic marketing could improve Lu Tao's performance, and whether Olympic marketing was a blessing or a curse? This issue of Financial Investigation Bureau takes you to solve the puzzle.

phenomenon

Prepare for 3 years of sports brands to fight the Olympic marketing war

More than two months before the opening of the Olympic Games, Anta (expanding site selection information) announced its Olympic marketing strategy and will cooperate with the "China House" set up by the Chinese Olympic Committee. Li Ning also launched a replica product of "1992 Li Ning Olympic Prize winning Shoes" and a series of cultural T-shirts. Peak (expanding site selection information) and Jordan's Olympic marketing advertisements have also been launched.

In fact, the battle of major brands for London Olympic resources needs to be traced back to three years ago. After the Beijing Olympic Games, Anta became the highest level "strategic partner" of the Chinese Olympic Committee through nearly a year of negotiations. Later, Li Ning also pocketed the sponsorship rights of five Chinese Dream teams, including gymnastics, diving, shooting, table tennis and badminton, to provide them with sports equipment during the competition.

Peek, Jordan and other enterprises, who are also Jinjiang Brothers, have a more unique vision. PEAK successfully signed contracts with seven Olympic Committees, including Iraq, New Zealand and Algeria. Jordan sponsored the National Olympic Committees of Mongolia and Turkmenistan. Hongxingerke also reached an agreement with the Iranian Olympic Committee. At the London Olympics, the logo of Chinese sports brands will be everywhere.

Probing into causes

High inventory crisis hit

Chinese sporting goods enterprises are more or less desperate in Olympic marketing, which is actually a helpless move. A decade of high growth of 30% to 50% every year has passed, and the high inventory crisis has become a problem that every Chinese sporting goods company must carefully consider.

According to the annual report of Chinese sporting goods enterprises listed in Hong Kong, the inventory of Li Ning in 2011 was 1.133 billion yuan, up 40.57% year on year from 806 million yuan a year earlier; In the same period, Li Ning's net profit was only 386 million yuan, down 65.2% year on year. PEAK (expand site selection information) inventory increased by 25.67%; The amount of China's dynamic inventory even increased by nearly 60% compared with the previous year. Anta (expanding site selection information) and Special Step were also not spared.

Low demand, high inventory and other pressures have put sporting goods enterprises in a difficult situation, and "de stocking" is imminent. "The eyeball effect created by the Olympic Games can stimulate sales growth in the short term." Tang Shuangshuang, an analyst in the textile and clothing industry of Huachuang Securities, said that the Olympic Games is still the most concerned sports event in China, and the Olympic strategy will be the most critical work for most enterprises this year.

Channel expansion blocked

The practice of increasing profits by continuously opening stores seems to have come to an end. In the past, the speed of "enclosure movement" also slowed down significantly. In 2011, Anta, the industry leader, only opened 229 new stores, and even closed nearly 100 stores with poor efficiency throughout the year; The number of new stores of Li Ning was only half of that in 2010. The parent company of Kappa brand, China Trends, even saw a negative growth in the number of stores for the first time, 632 fewer than the previous year.

"It is unrealistic to try to maintain high profits and high growth by opening new stores and sinking channels." Tang Shuangshuang told reporters that Chinese sporting goods enterprises generally adopt the sales model of layer by layer agency. With the profit dilution, there is not much money left in the hands of dealers, which makes the channel expansion lack of practical motivation, and the channels of domestic sporting goods enterprises have been very sinking, Even villages and towns have stores.

Nike, Adidas and other international first-line brands are closing in, further squeezing the living space of domestic sporting goods enterprises. Tang Shuangshuang said that Nike and Adidas' R&D capability is much better than that of domestic enterprises. In order to compete for share, the price has taken the "civilian" route. The low price advantage of domestic sporting goods no longer exists, and Olympic marketing can increase brand exposure and recognition.

pressure

Sponsorship fees soared

On the other hand, the continuous price increase of Olympic resources has become the biggest problem that manufacturers have to face. Li Ning won more than 60 million yuan of clothing sponsorship for CCTV sports staff in 2008, which doubled to 125 million yuan by 361 degrees a year later.

Although the IOC did not disclose the specific price of the top sponsor with the highest threshold, many insiders said that the threshold for top sponsors of the 2008 Beijing Olympic Games was about 60 million US dollars, and the minimum sponsorship cost of top sponsors of the London Olympic Games had risen to 80 million US dollars.

In 1984, the threshold for sponsoring the Los Angeles Olympics was only $4 million, an increase of more than 20 times in 28 years.

"Obtaining the Olympic sponsor qualification is just the first step of Olympic marketing." Yang Runzhang, the marketing director of Beijing Star Sports, said that the sponsor qualification is actually just the right to use the Olympic brand for promotion, and later needs to be broadcast through ground activities, media advertisements Athlete interviews and other channels allow consumers to connect their brands with Olympic brands.