Have the Good Times Passed for Domestic Sportswear Brands?
开篇：润墨网以专业的文秘视角，为您筛选了一篇Have the Good Times Passed for Domestic Sportswear Brands?范文，如需获取更多写作素材，在线客服老师一对一协助。欢迎您的阅读与分享！
DAZZLING store window dis- plays， and Chinese consumers’clear preference for sportive outfits over the past decade have highlighted the popularity of sportswear in China. Promising market prospects at the start of this trend gave local sportswear manufacturers just cause for gleeful anticipation of sustained high revenues. Assuming that each person buys one sporty outfit， around a billion will be needed to dress the nation’s children， teens and adults. It was this rosy prospect that prompted both domestic and wellknown international brands in China to expand.
A number of domestic brands such as Li-Ning， Peak， Anta and 361° grew rapidly and soon became household names. Their outfits were a frequent feature of domestic and international sports events， and even at cultural activities.
Ten years on， rather than raking in abundant profits， these manufacturers are suffering.
In 2012， Peak Sports Products Co.， Ltd. encountered a dip in all major performance indicators， including sales and net profit. Anta Sports Products Co.， Ltd. and 361° （Fujian） Sports goods Co.， Ltd. also saw lackluster performances， according to their recently released reports. These figures imply that the rapid growth of domestic sportswear brands is a thing of the past.
As profits took a dive， inventory piled up. The average inventory turnover days increased from 49 in 2011 to 80 in 2012 for Peak， from 38 days in 2011 to 51 in 2012 for Anta， and from 40 days in 2011 to 56 in 2012 for 361°.
In 2012， the average price of an item of 361°sportswear was RMB 79.4（US $12.8）， down 16 percent from RMB 94.7 （US $15） the previous year.
Moreover， as of the end of 2012， Peak had 6，483 outlets – 1，323 fewer than at the end of 2011.
The year 2012 was hence abysmal for domestic sportswear brands. Market performances were just as disappointing.
Shrinking Market
A random poll conducted by this reporter showed that sportswear has lost favor among large groups of urban consumers.
Of the 10 Beijing residents polled， six said that sportswear is out of fashion， and three complained that domestic sportswear brands， which more or less replicate international brands， are no less expensive than their international peers.
“Ten years ago， a sports outfit was something of an outlay for us working people， and we felt it fashionable to be seen in them. The novelty， however， has now worn off. Brands vary little in style，and I no longer have any urge to wear them，” one consumer said.
“Sportswear in China is too expensive. Those that sell items for 10-20 dollars a pop abroad charge hundreds of yuan at home，” said another.
“Quality is deteriorating and counterfeits are rampant. It’s difficult to tell fakes from the genuine article，” yet another consumer concluded.
But if quality were to be satisfactory and prices reasonable， the consumers surveyed would be happy to buy domestic brands.
Industry analysts attribute the problem facing domestic brands to overspending on brand promotion and too little on product research and development. In other words， domestic brands have been copycatting their international rivals rather than coming up with local designs for the Chinese domestic market. This， in their view， is the main reason why domestic brands are now at a disadvantage when competing with those from overseas.
International Rivalry
The sluggish world economy has also inflicted a drop in profits on internation- al sportswear producers.
The Adidas Group recently released statistics on the performance of its Reebok brand in the fourth quarter and the whole of 2012， according to which Reebok sales in the U.S. and Latin America markets were weak. Rather than raking in 28.6 million Euros in profit as analysts predicted， the brand incurred losses in the above markets in the fourth quarter of more than 239 million Euros.
The latest Nike Inc. financial statement is not yet available， but the company’s financial statements as of November 30， 2012 showed that its net profit had plummeted by 18 percent， year-on-year， from US $469 million in 2011 to US $384 million in 2012.
In 2013， international sportswear brands， like their domestic counterparts， are also under huge pressure to reduce inventory. To this end， they are exploring new markets and sales channels， including opening direct-sales stores and factory outlets， and are at the same time developing products for these new markets.
Nike Inc. recently announced plans to open 40 to 50 factory outlets in China in 2013 that will discount products by an average 50 percent – a move that presages disaster for domestic brands.
Rising international cotton prices and domestic labor costs， meanwhile， are squeezing the profit margins of beleaguered domestic sportswear manufacturers.
“Wholesale prices of sportswear have stayed almost the same for years， yet costs have markedly increased. This means ever-leaner profits for manufacturers，” said one wholesaler of domestic brands. “Under such circumstances we feel heavy pressure from international rivals such as Adidas and Nike.”
Wave of Shop Closures
“Whoever controls the sales channels controls the world，” is an old saying frequently heard in the China sportswear market. There was once a time when a stable sales network was all that products needed to sell， as few international manufacturers were interested in retailing.
Foreign brands have now realized， however， that the time wherein capital can be rapidly recouped through wholesaling is past， and that they must now woo consumers by opening factory outlets and discount stores.
As international rivals such as Nike Inc. and the Adidas Group open more stores in China， domestic manufacturers are steadily closing theirs down. A wave of closures that started in 2011 gathered momentum in 2012.
Domestic brands appeared during the first flush of sportswear popularity in China. In contrast to their foreign counterparts， they opened direct-sale shops right from the outset， partly to impress consumers and promote their brand names， and partly to avoid headon competition with foreign brands.
This strategy worked for a while， but the recent market slump has forced domestic producers to close down retail outlets to save costs.
Home-grown brand Peak stated in its annual financial report that the company had closed down certain small， low-performance sales outlets in 2012 while at the same time opening larger numbers of bigger， more efficient stores. Meanwhile， the company has increased the number of its distributors and encouraged those already in existence to open more Peak-authorized retail outlets. Certain qualified retailers have been promoted to the rank of distributors.
Similarly， last year， Anta also adjusted its sales channels by shutting down inefficient shops， restricting the opening of new shops and enhancing the image of those still in existence.
Challenges and Opportunities
Although domestic brands have flourished in the past 10 to 20 years， they still lag behind their international counterparts in terms of capital， product research and development， market positioning and innovation.
Quite a number of domestic producers， having served as OEM manufacturers for foreign brands， are heavily influenced by foreign brands with regards to product design. Their limited investment in research and development， however， prevents their products from gaining significant presence in the market in the short term.
Domestic brands need also to pay more attention to intellectual property protection. Copycats can serious damage the image of products and brands and also hamper domestic brand innovation.
Consumers are still not satisfied with the quality of domestic brands， as the results of the above-mentioned poll show. Taking into account that most interna- tional brands like Adidas and Nike are also produced in China， what exactly has given rise to the product quality gap？ The answer is that domestic producers are weak in management and quality control.
When China’s sportswear market was in its prime， many domestic brands priced their products at the same level as foreign brands. From now on， domestic brands should give more consideration to consumer psychology and price their products accordingly.
Rather than engage in head-on price competition with international brands， domestic brands should shift their sights to another huge potential market – that of rural areas they have long ignored.
If domestic brands can develop lowpriced quality sportswear made for Chinese consumers， they are likely to gain a strong foothold in the rural clothing market.