At the end of October, the Bosideng down jacket of 10,000 yuan was on the hot search, and someone moved Canada Goose (Canada Goose) out, saying that in the down jacket industry, the price of domestic Bosideng caught up with luxury brands.
Frightened Bosideng quickly stood up and responded: high-priced down jackets are products of 2019, and they are professional top products customized for climbers.
Things soon subsided, but Bosideng was compared with the luxury "big goose", adding a lot of color to the popular "national tide" in recent years.
The results were checked, and the gap between the two was still very large.
As of November 19, Bosideng's market capitalization was HK$64.823 billion, far higher than Canada Goose's US$5.463 billion (nearly HK$42.5 billion).
Bosideng's business path was uneven, with it closing stores, hiring professional managers, shrinking its diversification routes and closing overseas markets for a time during a corporate crisis.
However, in 2018, the price of Bosideng brand down jackets increased comprehensively, an increase of 20%-30%, of which the price increase of high-end products reached more than 30%. In the process of this price increase, Bosideng closed stores in third- and fourth-tier cities, upgraded new stores in first- and second-tier cities, participated in international fashion weeks, and jointly signed with brands and designers and opened up online channels.
It has gone through several twists, and each turn has left traces of that era.
By 2021, Bosideng's revenue reached 13.52 billion yuan, an increase of 10.9% year-on-year, which is already three consecutive years of steady revenue growth.
Bosideng is becoming more expensive and fashionable, and the market is not static: new competitors are on the road, the level of clothing consumption of the public is constantly changing, and the brand itself is facing the warning of too much concentration of business.
Opportunities and potential crises coexist – Bosideng, which became "expensive" in the past, took the right route, and although its market value is impressive today, it still looks like it is in the wind and rain.
Learn from Canada Goose
Bosideng can only go to the high end.
Bosideng had lost sight of its globalization and four-season strategy of apparel categories, and had piled up costs in aggressive store expansion in 2014, resulting in a sharp decline in net profit.
In 2017, Bosideng, who did not focus on making down jackets, had to brake hard.
At its lowest point, it did its "apprenticeship" to the luxury brand Canada Goose.
At that time, Bosideng found that the "goose factory" reformed from 2001, not only the design became simple, but also began to sponsor cultural industries such as movies, while limiting production capacity, the competition strategy was also changed to a high-priced differentiation strategy, and the brand tone shifted from civilian to high-end.
Bosideng decided to learn from Canada Goose and embark on a high-end road.
If you want to be high-end, you first go to the runways of Fashion Weeks in London, New York, Milan and ask Victoria's Secret royal supermodels to take the stage for them - the runway enhances consumers' sense of identification with Bosideng's high-end brands. Under this strategy, in 2018, Bosideng's operating income directly stepped into the tens of billions of levels, and the gross profit margin is also rising year by year, and in 2021, its gross profit margin has reached 58.6%, even comparable to some Internet companies.
At the same time, in China, Bosideng began to enhance its brand image by sponsoring variety shows, asking celebrities to endorse, etc., and began to learn Canada Goose's brand co-brand, designer cross-border and other strategies.
For example, it has cooperated with Shanghai Disney to launch the Disney series of down jacket products; with Hermès designer Jean Paul Gaultier to launch a couture down jacket series; and with international movie star Tom . Hiddleston & Scarlett . Johnson collaborated on the runway and so on.
Even the staff who went to Antarctica to participate in the scientific expedition also put on Bosideng down jackets, so that its brand was loaded with professional, high-end and technological sense.
A series of cooperation, shows, endorsements and sponsorships have made Bosideng tall on the one hand, and on the other hand, they have also pushed up the cost.
Judging from the financial report, the transformation towards the high-end Bosideng, distribution expenses rose.
In the 2020/2021 financial year, distribution expenses, including advertising expenses, depreciation of right-of-use assets, contingent rents and expenses for sales of employees, increased by 12.4% year-on-year.
Reverse brand image
Bosideng wants to become high-end, in addition to raising prices, online and offline façade images must also keep up.
First adjust the offline store - reverse Bosideng's previous aggressive multi-store strategy.
As early as 2014, Bosideng opened 2560 stores across the country, an average of 7 stores in 1 day, and sales could not keep up with the cost, and the net profit was only 132 million yuan, down 23.6% from the previous year. The following year, sales continued to decline, even reaching their lowest point since going public in 2007.
Bosideng was pursuing a sinking strategy on the channel at that time - this may allow it to sell more clothes, but the sinking of the channel also brought more damage to the brand image.
It is not easy to change the low-end image branding brought by the sinking channel to the brand.
In 2015, Bosideng closed 5,000 offline stores in one go. After that, it began to rebuild the offline channels of first- and second-tier cities - setting up flagship stores in landmark business districts in beijing, Shanghai, Hangzhou and other first-tier cities, and upgrading the core brand image.
This reconstruction took 5 years.
According to the 2020/2021 financial report data, Bosideng has increased the number of first- and second-tier city outlets to about 28.0%. At the same time, Bosideng, determined to embrace young people, has also begun to learn various "store opening skills", such as working with 300 Wanda shopping malls across the country to create topics in marketing.
While striving to open a "luxury store", its online channels have also begun to be established.
Bosideng first cooperated with Alibaba Cloud to turn the down jacket style, product number, color, etc. of each store into data, and then judged the changes and fashion trends of "explosive models" through data summary.
In terms of network marketing, Bosideng has been involved in double 11 activities since 2013, and in the figures released in recent years, in 2019, "double 11", Bosideng omni-channel sales of about 1 billion yuan; in 2020, "double 11", its sales of about 1.5 billion yuan.
Not only that, this veteran company that has laid out online also has its own live broadcast channels, and even last year's double 11, the number of single-day live broadcast views in its live broadcast room reached 3.5645 million.
In addition to its own live broadcast room, Bosideng also cooperated with Li Jiaqi and priced the down jacket of the live broadcast 100 yuan lower than the Double 11 event of its Tmall flagship store.
All kinds of actions show that Bosideng is reversing the old, old-fashioned image of the past, after all, behind various fashion weeks, designer co-branding, pop-up stores and "national tide" trends, the company must strive to establish a high-end fashion trend image.
But only "high-end", may not be able to maintain Bosideng's high valuation, Bosideng's best selling down jacket is not its high-end model, and the entire down jacket industry is also changing.
The "high" place is not cold
Although Bosideng raised prices, the best-selling products were not too "high-end".
Its high-end down jacket price is about 6,000 yuan, which is slightly inferior in front of the "Canada Goose".
However, Bosideng's 2020/2021 financial report mentioned that the proportion of sales revenue of products with a unit price of more than 1800 yuan increased to 31.8%; Tmall flagship store data shows that the sales of down jackets of 1,000 yuan exceeded 10,000 yuan, and they are still the main products.
Zhu Gaofeng, CFO of Bosideng, also said at this year's performance briefing: "The main price segment of Bosideng is currently concentrated in 1500 yuan to 1800 yuan. ”
In fact, while Bosideng's brand image is high-end, it mainly lays out the mid-range market that the "Canada Goose" has not been involved in.
But in this market, although Bosideng occupies the head, the competition is particularly fierce – in recent years, the number of new down jacket companies in China has also shown an overall growth trend.
According to statistics, there are 49,900 down product-related enterprises in China. In 2019, 11,100 new stores were added, an increase of 51.17% year-on-year, although this increase decreased later, but in the first ten months of this year, 2,948 new ones were added.
Some of these surges in down jacket manufacturers position the market in the low-end market left by Bosideng below 1,000 yuan, some directly benchmark Bosideng mid-end products, and some companies target foreign markets from the beginning - they invariably pose a threat to Bosideng.
Competition is becoming more competitive, but interest in buying clothes seems to be waning.
According to the National Bureau of Statistics, due to the impact of the epidemic, the per capita consumption expenditure of residents in 2020 increased by -1.6%. Even before the pandemic, people were less enthusiastic about buying clothes – in 2019, per capita clothing consumption expenditure was 1,338 yuan, accounting for only 6.2% of per capita consumption expenditure, and the 3.8% year-on-year growth rate was the lowest of all consumption categories.
In the future, these may become stumbling blocks on the road to bosideng's development.
Through a variety of dazzling fashion operations, Bosideng has indeed enhanced its position in the down jacket industry, but it is still far from the "Canada Goose" - how to cross the price threshold of 1800 yuan, sell its high-end series into a blockbuster, and expand more categories and businesses, is still Bosideng's bondage.
An analytical article in the Chinese edition of Barron's magazine believes that the leading position in the industry has brought Bosideng a certain room for trial and error, but after several consecutive years of rise, it has been under the intertwining of positive performance and potential negative factors for a long time, which may affect investors' expectations for Bosideng.
In this way, Bosideng, which seems to be standing on a "high place", seems to have been hovering on the edge of the comfort zone.
(Source|.) AI Blue Media Collection Author | Black Sheep)