From Hongqi Automobile and Li Ning to see the advanced road of domestic goods, how should domestic goods continue to write legends?

| Beijing Maritime Securities

2021 is the year of the real rise of domestic products!

Looking back on 2021, from the popularity of Li Ning, Great White Rabbit, Liushen and Yunnan Baiyao, to the popularity of classic brands such as Baiqueling and Pull back shoes. Consumers' perception of domestic products has gradually changed from "Made in China" to "Chinese Brands". Buying domestic goods, using domestic products, and drying domestic products are becoming a distinct lifestyle for a new generation of consumer groups. We take Hongqi Automobile and Li Ning as an example to analyze the advanced road of domestic brands. And how should the domestic products after the explosion continue to write the legend?

01

The red flag flew in the wind, and the "official turning to the people" counterattacked magnificently

In the old days, Wang Xie Tang Qianyan flew into the homes of ordinary people. As a red flag that accompanied the growth of New China, it carries the memories of countless people's times: China's first self-produced high-end car, the 10th, 35th, 50th, 60th and 70th anniversary military parades of the founding of the People's Republic of China, the military parade parade of the 70th anniversary of the victory of the Chinese People's War of Resistance Against Japanese Aggression and the World Anti-Fascist War, the 1960s chief's car and the foreign affairs courtesy car.

The red flag of glory and the "official car" have become the biggest label attached to the body. Qu Gao and Oligo are difficult to find, and the subsequent development of hongqi has gradually dimmed. In the 1980s and 1990s, it was announced to stop production due to high fuel consumption, and although subsequent production has resumed, Hongqi has not been able to usher in its own highlight moment. At the beginning of this century, Hongqi even wanted to lay out the taxi market, but obviously this is contrary to Hongqi's own positioning.

However, the appearance of Xu Liuping completely changed the fate of the red flag and let the red flag fly again in the wind. In 2017, Xu Liuping, chairman of Changan Automobile, took the helm of FAW in the north. Who is Xu Liuping? In the more than ten years he has been at the helm of the armament group, the sales of Changan Automobile have increased from 709,000 units in 2006 to 3.058 million units. Obviously, the development model of Changan Automobile can be directly copied to Hongqi Automobile. Xu Liuping's northward journey is also seen by the outside world as the central government's determination to revive the red flag.

"Four years of college" Xu Liuping did not talk about love, nor did he indulge in games, but raced against the clock to study, and lived up to expectations and handed over a satisfactory graduation answer sheet. Innovative marketing models, deep cultivation of the offline market, the successive appearance of a variety of models, and the improvement of after-sales service have also made Hongqi's sales achieve rapid growth.

According to the data released by Hongqi officially, Hongqi sold less than 0.5 million vehicles in 2017, but in December 2021, Hongqi sold more than 39,100 units in a single month, refreshing the brand's single-month sales record. In 2021, the sales volume of Hongqi exceeded 300,000 units, with a year-on-year growth rate of 50%, and its growth rate was 10 times higher than the industry average. The Hongqi H9 and Hongqi E-HS9 have achieved sales of more than 40,000 units and 5,400 units respectively throughout the year, ranking the forefront of the same level of products in their respective markets.

Judging from the data released by the E-Car Research Institute, the performance of Hongqi in a number of data is also eye-catching. In the stock market, Hongqi stands in the "C position" of the Chinese brand camp and seizes the opportunity advantage of competing in the stock car market; in terms of satisfaction, the satisfaction of Hongqi after-sales service in 2021 is as high as 96.5%, ranking top 3 of mainstream brands;

In terms of reflux rate, the reflux rate of Hongqi in 2021 is as high as 85.17%, ranking top 5 of mainstream brands; the transfer rate rate is 75.33% of Hongqi in 2021, ranking top 20 of mainstream brands. In terms of loyalty, in 2020, the loyalty of Hongqi rose to 28.67%, ranking top 5 of mainstream brands; today's Hongqi is no longer an "official car" on the top, but has achieved a gorgeous transformation of "official to people".

Although the "four years of university" have ended, there are still many topics waiting for Xu Liuping in the "three years of graduate school" that need to be solved one by one. For example, how to achieve balanced development of the four major products of L, S, H and Q, how to land the automated driving solution, how to effectively grasp the middle-aged rhythm and so on. But we also firmly believe that Xu Liuping, a veteran, will also solve these problems one by one during his "graduate school" period. In the future, Hongqi Automobile will also become an important force in domestic automobile brands.

02

Li Ning played with the national tide and opened up the second pulse of the development of Ren Dou

Although the Li Ning sports brand has the traffic blessing of Mr. Li Ning, the prince of gymnastics, its development can be described as a twist and turn. As a national brand and manufacturer of sporting goods, Li Ning occupies a pivotal position in the minds of Chinese consumers.

However, before the young consumers' liking for Li Ning was not high, and even put negative labels such as "soil" and "old people wearing" to Li Ning's brand image, it is obvious that Li Ning's initial product advantages and the original brand core no longer have the ability to attract more young consumers.

At the same time, Li Ning's development before 2018 also faced serious problems. As a result of the company's previous aggressive expansion strategy, the company's inventory turnover days directly increased from 52 days in 2009 to 72.5 days in 2011. In 2011, Li Ning's sales were surpassed by ANTA, losing its position as the first local brand in China.

In 2012, Li Ning ushered in the first huge loss after the listing, and the loss of that year was as high as nearly 2 billion yuan. CEO Zhang Zhiyong resigned because li ning's reform did not meet expectations. In the same year, Li Ning closed 1821 offline stores. High inventory, huge losses, executive departures, declining market share, inability to open the consumer market for young people, Li Ning began a difficult self-help operation under the crisis.

Li Ning's turnaround came at New York Fashion Week in 2018, because Adi and Nike did not have time to release new products for fashion week that year, which also allowed Li Ning to pick up a big bargain. However, at this fashion week, Li Ning overhauled the previous serious and rigid clothing design concept, but added the National Tide factor of Chinese style, which also instantly ignited the domestic and international markets, and this also officially opened the prelude to Li Ning's "National Tide Era".

Deep ploughing of the national tide wind also allowed Li Ning to open up the second pulse of the company's development. At present, traditional Chinese culture is constantly integrating with Li Ning's design, and a series of products such as "Wu Dao", "Heart of Per", "Wukong", "Rouge Nian", "Kung Fu Series" and so on have been launched.

In 2020, Li Ning, together with Tmall and Dunhuang Museum, created the "Li Ning Thirty and Standing Silk Road Exploration Theme Party". Dunhuang is the origin of Chinese culture to the world, and through this cooperation with Dunhuang Museum, the sports trend and Chinese culture are organically combined to add more trust and endorsement for Li Ning.

In 2021, Li Ning moved the show to the Central Plains and held the "China Li Ning 2021 Autumn and Winter Trend Conference" in Zhengzhou, Henan Province with the theme of "Wu Chuang Wu Yi". Central Plains culture is an important part of the mainland's traditional culture, and Li Ning's move is to emphasize the organic combination of himself and traditional culture.

Guochaofeng has become the biggest trump card in li ning's hands, and in 2021, Li Ning signed a top-notch artist Xiao Zhan to clarify the concept of shoes to wear and not to fry. At the same time, due to the attitude of many foreign sports brands on the Xinjiang cotton incident, Li Ning has also ushered in a real era of rejuvenation. According to Li Ning's financial report, the company's revenue and net profit in the first half of the year were 10.2 billion yuan and 19.62%, respectively, an increase of 65% and 187% over the same period.

According to Adidas's financial report, in 2021, due to multiple events, Adidas's sales in Greater China decreased by at least 10.951 billion yuan. This year's sales growth rate is likely to fall into single digits.

With the improvement of Chinese people's cultural self-confidence, the trend of national tide will continue. At the same time, the United States, the United Kingdom, Australia and other countries have boycotted the Beijing Winter Olympics, and the market share of domestic sports brands this year will be greatly increased. In fact, Li Ning and Hongqi Automobile are just the epitome of the rise of many domestic products last year. So, why is 2021 the year of the rise of domestic products?

03

Time, location, and people have contributed to the rise of domestic products

What are domestic products? It is one of the important carriers of inheritance, extension and innovation of traditional Chinese culture. Pull-back shoes, alabaster, bee flowers, Phoenix brand sewing machines and many other domestic products are the youth memories of a generation. However, with the advancement of the reform and opening up process and the deepening of economic globalization, more and more foreign commodities have poured in.

People's consumption concepts are also changing, the moon in foreign countries is rounder than in China, imitation, plagiarism, low-end, inferior quality, etc. have become the definition of domestic products for many people. Favoring imported goods and discriminating against domestic goods is very common.

Why did there have been many "foreign brands" in China before? The root cause is still the blind worship of consumers for foreign products. In addition, some domestic brands lack marketing awareness and cannot grasp consumers, resulting in the decline of domestic products. But obviously, this deformed consumption is not conducive to the development of the domestic economy. In this context, the state has introduced a series of policies to promote the rise of domestic products.

For example, in April 2017, the State Council issued the Reply of the State Council on Agreeing to Establish a "China Brand Day", deciding to set up May 10 as "China Brand Day" every year from 2017. With the support of national policies, a number of e-commerce platforms are also promoting the revival of domestic products and have achieved obvious results.

Taking Douyin e-commerce as an example, Douyin E-commerce has always attached great importance to the sustainable development of domestic brands on the platform, and has successively introduced a series of support measures to improve service capabilities, help domestic products innovate, and meet the diversified quality shopping needs of consumers.

According to the "2021 Douyin E-commerce Domestic Products Development Annual Report", domestic brands are using Douyin to achieve rapid sales growth, the current platform domestic products share of up to 89%, sales increased by 667% year-on-year. Among them, during the "Double Eleven" period in 2021, the sales of Ma Yinglong, Haitian and Zhangyu increased exponentially, with a month-on-month increase of 656%, 452% and 121%.

At the same time, according to the data of the "Tmall Domestic Beauty Attack Road - 2021 Beauty Industry Trend Insight Report", last year's "Double 11", the overall growth rate of domestic products reached 78.9% in the sales of the top 50 brands in the skin care category, which was much higher than the growth rate of 26.8% for foreign brands. Domestic brands are using e-commerce platforms to achieve sales and profits at the same time.

We say that behind the rise of domestic products is the awakening of the new generation of consumer groups' sense of national cultural identity, national identity and honor. In the past 10 years, China has become the world's second largest economy, the comprehensive strength has been further enhanced, consumers pay more attention to the quality and quality of goods, and at the same time, thanks to the continuous transformation of domestic brands themselves, standing on the international first-class level.

In the same period, while enjoying the consumption dividend brought by China's huge population, overseas brands regard Chinese consumers as "leeks". From the Xinjiang cotton incident, the Canada Goose double standard incident, the Sam Xinjiang commodity incident, etc., the outbreak of these incidents is also stinging the nerves of the Chinese people again and again.

Rooted in the marrow of the Chinese people, the sense of national cultural identity has also been completely awakened, and under the catalysis of the epidemic, more and more consumers have found that the cost performance of Chinese products is far less than that of foreign big brands, and the flat replacement has become the choice of many consumers, which has also made the "national tide" emerge.

The awakening of consumers and the support of e-commerce platform policies are external factors, and domestic product enterprises themselves are actively seeking new changes. As we just said Hongqi and Li Ning, in order to adapt to the development of the new era, enterprises are completing a top-down innovation. More and more domestic brands achieve the effect of drainage through online marketing, and use offline marketing to increase the communication and interaction between brands and consumers.

With the development of science and technology, some domestic brands have begun to use VR, AR and other technologies to achieve interactive communication and build an immersive experience for consumers. "Transformation" has become the choice of many domestic brand enterprises, and they are also adjusting their corporate development strategies to reach more consumers and achieve the true meaning of phoenix nirvana.

In fact, the rise of domestic goods is no accident, it is the result of the common achievements of time, place, people and common achievements. However, it is worth noting that the current development of domestic goods has also encountered some problems, which may become a resistance to the development of subsequent domestic products.

04

The development of domestic goods, obstacles and long

We say that if domestic brands want to achieve lasting development, there are two aspects of the problem that need special attention. On the one hand, under the stimulation of patriotic marketing, some domestic brands may usher in a short-term surge in performance. However, when the patriotic feelings fade, it is the time to truly test the "internal strength" of various domestic brands.

Product quality, product cost performance, after-sales service, product innovation ability, how to continue to capture the hearts of young consumers and so on. Otherwise, simply relying on so-called patriotic marketing will not be able to achieve real development. For example, Hongxing Erke, a sports brand that exploded last year, has created a lot of sales performance online and offline in the short term. But when this enthusiasm of consumers faded, Hongxing Erke's sales also ushered in a sharp decline.

On the other hand, at present, domestic products are developing rapidly with the help of e-commerce platforms, but the quality of products is uneven. Real domestic products and fake domestic products coexist at the same time, and it is difficult for consumers to distinguish who is Li Ghost and who is Li Kui. Some low-end domestic products only attach importance to brand marketing promotion, and problems such as incorrect goods and one-time trading occur frequently, triggering a serious crisis of trust. Obviously, this is not conducive to the development of domestic goods into a virtuous circle of development.

Behind the rise of domestic products, it is the consumption concept of the younger generation of consumers that is changing, which also provides an opportunity for the development of domestic products. However, for domestic brands, how to build Internet celebrity products into growth products is a long-term work.

After the explosion of domestic products, how to continue its legendary story?

END

Producer | Wang Jianzhong

Editor-in-Chief | Wang Jianzhong Typography | Li Zichu

Note , star

Value, discovery