I never thought that the 2024 Beijing Half Marathon champion sprint would cause an uproar!
Chinese men's marathon record holder, Xtep contracted athlete He Jie won the championship with a time of 1 hour, 3 minutes and 44 seconds, but unexpectedly ushered in a group ridicule on the whole network, but everyone ridiculed He Jie himself, but the sponsor of this competition, Xtep, Xtep's official Weibo comment area has already fallen, even Hu Xijin, who has always been pertinent, can't stand it, thinking that netizens are reasonable to question, which caused a heart-wrenching trip:
Did Xtep manipulate the "match-fixing"?
Why did the three black players "give way" to He Jie?
How can Xtep, which is mired in the whirlpool of public opinion, regain its credibility?
Just now, an even more explosive scene appeared, and there were media reports that the Kenyan athlete admitted to releasing half Masai Ho Jie......
01, Xtep, won the first, lost the public opinion!
On April 14, in the 2024 Beijing International Long-distance Running Festival and Half Marathon, Chinese player He Jie won the championship with a 1-second advantage, and was extremely tired after the race, while the 3 black runners who also won the runner-up were very relaxed, their eye-catching smiles seemed to be happier than He Jie, who won the first place, and even one person helped He Jie pat his back to relieve his breath when He Jie bent over and coughed. Fingers to the finish line and other strange movements, a storm of questioning the fake race broke out.
The first to fall is the comment area of Xtep's official Weibo, and among the popular comments at the top of the list, there are many sharp words such as "embarrassing, contrary to sportsmanship", "Xtep should go bankrupt", "the worst game ever", and in the comment area of the rest of the media and self-media big V, it is also almost one-sided disdain and disdain for Xtep.
Even the famous "wall-riding faction" representative, has always been pertinent Lao Hu can't stand it, he clearly expressed in a Weibo late that night "Lao Hu thinks that the masses are valid" point of view, Hu Xijin also said that "there is a brand is one of the sponsors of this half marathon, He Jie is one of the spokespersons of the brand, He Jie and 3 foreign athletes are wearing the brand's competition clothes and running shoes, this is no problem, but they are suspected of collaborating to create a result of the competition, not full competition......"
For example, the three black runners who won the runner-up this time, one from Ethiopia and two from Kenya, are all recognized as first-class horse racing powers in the world, such as the 2023 London Marathon world champion, the Chicago Marathon world champion, and the first marathon runner in human history to run within 2 hours and 1 minute in an official race, Kipchoge is from Kenya.
In this competition, the three black athletes, according to media reports, have a personal best half-marathon time of 1 hour 01 minutes and 16 seconds, and media analysis said that regardless of the rest of the factors, just compare the strength of the half-marathon, these three players have the possibility of defeating He Jie.
On the afternoon of April 16, "People's Concern", which is certified as the "Public Channel of Guizhou Radio and Television Station", hosted the topic of #Kenyan athlete admits to releasing water in half Marseille He Jie#, which mentioned that the "South China Morning Post" reported that "Kenyan long-distance runner Mnangat admitted in an interview that He Jie won the championship in the Beijing Half Marathon, and the reason for releasing water was that He Jie was his friend" As soon as the words fell, the three views of netizens were once again shattered.
In the face of so many doubts, if Xtep does not come up with a convincing official response statement, this storm of public opinion is afraid that it will be difficult to calm down, and the strength of He Jie, the domestic marathon record holder, is undoubted, but his personal reputation is currently damaged by this race.
Xtep, it's time to give an explanation!
02, how Xtep "redeems"
The binding of sports brands and sports superstars and top competitions has long been a mature commercial closed-loop play in the sports circle, and everyone is not surprised, Nike Adi Anta and other head brands have a record of signing and sponsorship, however, there is a succession of hearing the Tao, and there is a specialization in the art industry, in the field of domestic marathons, the earliest layout, the largest investment, and the most fruitful or Xtep!
Since 2019, Xtep has sponsored the "Chinese Racing" incentive program jointly launched by marathon runners and the Chinese Athletics Association, setting up a record-breaking award of up to 1 million yuan, and an additional reward of 10,000 yuan for every 1 second of breakthrough.
According to Frost & Sullivan's statistics, in terms of the wearing rate of running shoes in the 2023 China marathon, Xtep is leading and ranks first, and according to public reports, in March 2023, He Jie wore the Xtep 160X series to set a new men's marathon record, and as of December 31, 2023, the 160X series has successfully helped 83 Chinese athletes win 370 marathon championships;
As of March 2024, Xtep has sponsored more than 1,000 marathons, making it the sports brand with the most marathon sponsorship in China, and Xtep has covered more than 2 million professional runners through 65 Xtep running clubs.
It can be said that Xtep has built an indestructible brand mentality in the minds of Chinese marathon runners with its real money and the professionalism of its running shoes, which has made all its peers glamorous, but the era of one trick to eat all over the world has passed!
Last month, Xtep's 2023 annual financial report has highlighted Xtep's multi-dimensional anxiety:
According to Xtep International's public disclosure, in 2023, the company will achieve revenue of 14.3455 billion yuan, a year-on-year increase of 10.9%, of which Xtep's main brand will achieve revenue of 11.9473 billion yuan, an increase of 7.4%, the group's operating profit will be 1.5799 billion yuan, a year-on-year increase of 7.9%, and the profit attributable to shareholders will be 1.030 billion yuan, an increase of 11.8% , the market capitalization is likely to be caught up by 361° (HK$9.201 billion).
As of the close of the day, Xtep's share price fell by more than 4%, as of press release on April 16, 2024, Xtep's share price still fell by more than 3%, from the historical high of HK$15.87, it fell by more than 7%, since April 15, Xtep's market value has evaporated by HK$1 billion in 2 days, and the latest market value is HK$11.490 billion, which is gradually moving away from the corporate goal of 100 billion yuan of Ding Shuibo, chairman of the board of directors and CEO of Xtep.
The financial report data is good, but the stock price continues to be sluggish, and at the same time, a number of brokerages continue to lower the target price of Xtep, which shows that in addition to the sudden black swan, the imagination space of the core business may be limited.
Continuing to analyze the financial report, in 2022, the revenue of Xtep's footwear business accounted for 60% of the total revenue, and in 2023, the proportion of the revenue of this main business to the total revenue fell by 3 points to 57%.
Looking at the growth rate, in 2023, Xtep's footwear business revenue will increase by 5.3% year-on-year, and the revenue of the clothing business will increase by 20.6% year-on-year.
According to Wind statistics, in 2021~2023, Xtep's revenue growth rate will decline from 22.58% to 10.94%, and the net profit growth rate will decline from 77.05% to 11.8%, with a significant slowdown in the trend.
Where exactly does the problem arise?
It is worth mentioning that in the past 2023, Xtep's sales expenses in advertising and promotion have surged by 28% year-on-year, which is a big increase compared with the sales rate during 2020~2022, or from the side, it is more difficult for Xtep to sell products.
In the first half of 2023, Xtep's average inventory turnover days hit the highest level in nearly 5 years, reaching the warning line of 115 days, and in the whole year of 2023, Xtep's turnover cycle dropped to 90 days, which is still 3 months.
In addition, Xtep, which benchmarks Anta's route and strives to expand its multi-brand territory, has also acquired international high-end sports brands such as Gasway and Paladin, and successfully built a 1+4 brand matrix.
In 2023, the revenue of the fashion sports segment from the Gasway and Paladin brands will be 1.603 billion yuan, and the revenue of the professional sports business of the Saucony and Melle brands will be 796 million yuan, and the cumulative contribution of the four new brands to the group's revenue will be less than 20%, which means that Xtep still maintains a high dependence on the main brand of Xtep, which contributes more than 83% of the revenue.
Xtep also needs to actively reverse the public's perception of its "heavy marketing and light research and development", Xtep obviously has technical genes, otherwise professional running shoes may not be widely favored, but unfortunately, compared with sales expenses, only a fraction of the research and development expenses appear to be insincere, which may also provide a direction for Xtep's follow-up marketing strategy to optimize and improve.
In 2023, Xtep's advertising and promotion expenses will be 1.962 billion yuan, an increase of 425 million yuan compared with 2022, accounting for 13.7% of revenue, and the R&D expenses in the same period will be 398 million yuan, and the R&D rate will be about 2.8%.
If Xtep can continue to improve the profitability of the four new brands in addition to the main brand, and at the same time use the channel advantages and superimpose AI innovation technology to optimize the product portfolio, so that the inventory-to-sales ratio can return to reasonable, actively eliminate the negative impression of the brand, reshape consumer cognition, and the full explosion of performance may only be a matter of time.
We look forward to Xtep's sincerity and professionalism to deliver a future answer!