Text / Chen Diandian
PUMA is a typical example for many international sports brands in the Chinese market. Judging from the market performance in recent years, PUMA is undoubtedly a leader. According to the FY2023 annual report, PUMA's revenue in China has grown for four consecutive quarters, with a year-on-year increase of 19% for the year (the exact amount was not disclosed). In the past few years, Rihanna's Creepers, Pamela's co-branded training series, and Manchester City Club products have become popular in the Chinese market.
However, on a larger time scale, PUMA has a long way to go in China. This 76-year-old sports brand is more of a fashion and trend label in the minds of Chinese consumers. The vague brand image and the lack of sports core display are not only problems that PUMA needs to solve in China, but also in the world.
In Paris at the beginning of April, PUMA held its first brand refresh event in 10 years. What is the story of the 76-year-old PUMA in this sporting year?Krypton was invited to Paris to chat with PUMA's global CEO Arne Freundt and CMO Richard Teyssier.
FOREVER. FASTER.
PUMA's DNA moved
Exactly a century ago, 1924, was the last time Paris hosted the Summer Olympics. In the same year, in the small town of Herzogenaularch in southern Germany, the Dassler Brothers shoe factory, founded by the Dassler brothers, opened. This is where the story of the two major sports brands, PUMA and adidas, begins. It can be said that the history of the development of the modern Olympic Games and the history of sports brands began to be intertwined in 1924, shining on each other, making sports an indispensable part of human civilization.
100 years later, Paris is once again celebrating the Olympic Games, and PUMA has come to the Olympic city to reawaken the DNA of the brand they are proud of: FOREVER. FASTER.
Speaking at the launch ceremony, CEO Arne said that the new brand slogan wants to show how speed is deeply rooted in PUMA's DNA. Speed has always been the commanding heights of PUMA's brand, whether it is technology research and development or product application, the core of PUMA is to make everyone faster, help them reach the limit, and challenge themselves. At the same time, speed means that PUMA is the first to perceive change in the market, to act quickly and innovatingly with intuition.
Arne Freundt
CMO Richard told Krypton that PUMA's marketing communication strategy is rooted in the product, and they believe that through a great product, they can have more emotional connection and resonance with users, so PUMA's communication has been thinking about how to reach users on an emotional level. In the Olympic year, combined with the slogan FOREVER.FASTER. and the upgraded sports performance series under the NITRO technology, PUMA hopes to touch the emotions of users with the most original brand power.
Richard Teyssier
Indeed, speed is the foundation of PUMA. At the beginning of the company, the founder, Rudolf Dassler, named his brand RUDA. And in order to reflect the sense of speed of his products, Rudolph found one of the most concrete representatives in the animal kingdom - the cougar, which was later known as PUMA.
For the current market and consumers, PUMA is the most similar embodiment of speed is its signed sprint legend, Lightning Bolt. Usain Bolt, who continues to break human sprint records, is undoubtedly the best spokesperson for PUMA's speed.
SO AT THE BRAND LAUNCH, PUMA INVITED ATHLETES WHO COULD FULLY REPRESENT FOREVER.FASTER, INCLUDING TOKYO OLYMPIC CHAMPION AND WORLD RECORD HOLDER CARSTEN WARHOLM (MEN'S 400M HURDLES), MONDO DUPLANTIS (MEN'S POLE VAULT), AND HIGH JUMPER BARSHIM, WHO WON THE FIRST OLYMPIC GOLD MEDAL IN TRACK AND FIELD FOR QATAR. Of course, PUMA's sense of speed is not just for top athletes, it's about everyone. "Everyone dreams of having a superpower, and speed is PUMA's superpower. I hope that through us, all of us can break through our own limits, release our best personal state, and become a better version of ourselves."
In 2024, the year of sports, PUMA hopes to re-emphasize the brand's own sports and sports genes, which is the signal that PUMA hopes to convey to the outside world. Arne revealed to Krypton that FOREVER.FASTER. is the embodiment of 76 years of sports genes and the core of the brand for PUMA. Many brands in the market are pursuing this trait, but not every brand has such a heritage as PUMA. At the same time, he believes that the Olympics are a place that is forever full of magic. For PUMA, this is the perfect opportunity to showcase the brand's strength, speed, understanding and philosophy of sport.
It is understood that this press conference in Paris is also the beginning of PUMA's 2024 Olympic strategy. Richard revealed that during the Olympic Games, PUMA will build PUMA's Olympic House at the venue of the event, an independent design hotel called MOB HOUSE, which will become a front-line base camp for its athletes and the production of Olympic-related content.
Different from the previous Olympic Games, PUMA announced its Olympic strategy and brand strategy in a more high-profile manner this year, which is behind the confidence that the brand has accumulated in the past ten years and is determined about the future direction.
What has PUMA done right in the last 10 years?
The year 2014 was a critical time for PUMA to turn a crisis into an opportunity. That year, the brand finally got rid of the curse of profits falling by more than 50% for two consecutive years, and the increase reached 146%, and the profit volume also returned to the level of 100 million US dollars (170 million). Since then, although PUMA has experienced negative profit growth in 2015 and 2020, PUMA's overall market performance has been on the rise, and it has stabilized its position as the third global sports brand clock.
PUMA Income Statement 2009-2023
Looking back at the development of the past decade, it can be summarized as three successes. First of all, in terms of products and brands, PUMA emphasizes more elements of its fashion and lifestyle, and the popular flatform shoes Creepers co-branded and co-designed by Rihanna were born in 2014. Clearly, in the new era of social media, athleisure has become a panacea for PUMA to attract consumers, especially young and female users. So in 2016, PUMA did the same and signed a contract with Pamela to launch various co-branded products.
Not only that, the ancient god shoes Seeude have become a must-have shoe for street culture represented by hip-hop, which has also made PUMA's trendy brand brand more deeply rooted in the hearts of the people. Making the brand look cooler and more attitude undoubtedly injects new vitality into the old PUMA, as well as a new consumer group. And in this process, it cannot be ignored that PUMA as a brand, more mature storytelling ability.
Richard said that in the era of digital media communication, the way brands are marketed and communicated has been turned upside down, and the only constant is innovation. Innovative communication channels, innovative content production. For example, on TikTok, PUMA's official account takes its operation very seriously. To date, PUMA has 4.6 million followers on TikTok. Many popular products have been successfully spread to a wider range of users through social media platforms such as Instagram and TikTok, UGC and PGC of bloggers and KOLs.
And when it comes to content production, PUMA is also exploring and innovating. He told Krypton that the Olympic sportswear displayed at this press conference will use the form of AI creation to produce content in innovative ways, express these sports equipment, and distribute them on various social media channels around the world. During the upcoming Olympics, he also revealed that PUMA will work with multiple artists to create content with the assistance of AI.
Adapting to the new brand communication environment and strategically deploying accordingly has been an important factor in PUMA's successful growth in recent years. At the same time, changes in sales and operations have also had a positive impact on brand development.
Ten years ago, PUMA's early deployment of digital platforms and DTC (Direct-to-Consumers) was also an important factor in its continued growth. In the latest 2023 financial report, the revenue generated by DTC increased by 17.5% to $2.13 billion, and nearly a quarter (24.8%) of PUMA's global revenue was generated by DTC business.
During the new crown epidemic, the online e-commerce model has allowed PUMA, which has a first-mover advantage, to successfully turn the crisis into an opportunity. The promotion of Arne, who previously served as the Group's Head of Retail & E-Commerce in 2015-18, to CEO last year is another testament to the success of PUMA's digital strategy.
It is true that the correct decision-making in the past 10 years has given PUMA a greater power to speak in the market, but problems and concerns still exist. The biggest problem is the misalignment of brand recognition. In terms of market perception, PUMA is more like a sports fashion brand for new users, and this brand perception has been weakened or ignored by the 76 years of PUMA in the professional sports field.
In other words, professional athletic attainments are the soul of the PUMA brand, the 1 in front of all 0s. Although fashion and co-branding can activate the heat of the market for a period of time, in the long run, PUMA cannot forget its original intention.
This problem is also more or less reflected in real market feedback. In 2023, PUMA's revenue stopped its previous double-digit growth of 4.95%, while profit showed a slight decline of 2.67%. Arne mentioned that since entering the sports equipment industry, there has never been a day when the market has not been fierce. Therefore, for a longer-term reason, PUMA needs to be prepared for danger in times of peace and once again shout for its "ancestral craftsmanship" in the midst of a good life.
What else needs to be done in the Chinese market?
As an excellent student with good grades in the world, the topic of Chinese market development is naturally the focus of discussion. In Arne's view, the Chinese market is unique, especially in terms of digitalization, and the Chinese market is highly developed and different from other countries. Therefore, PUMA needs a strategy for this market, as well as a manager who knows it well. In July last year, Ms. Li Min became the General Manager of PUMA China, which is an important signal to strengthen the brand's localization strategy in China.
Similar to the problems encountered in the global market, the ambiguity of brand positioning in the Chinese market is also a problem that PUMA needs to solve. Arne told Krypton, "PUMA has performed well in the market over the past few years, especially in China. But I think we can do better. Because at present, it seems that the complete value and advantages of the PUMA brand have not been fully conveyed and expressed in China. That's why we have made some adjustments to our development goals after appointing Ms. Li Min as the General Manager of China. We believe that PUMA is an inspiring sports brand on a global scale, and in order to convey this brand identity, we will increase investment in the Chinese market and carry out brand exposure in various aspects such as basketball, football, e-sports, F1, etc., so that consumers can fully understand PUMA's sports DNA. 」
Richard added, "China is a very important market for PUMA. We are well aware that the communication and promotion of brands in the Chinese market should be as localized as possible, because China's cultural background, consumption habits and media environment are very different from the European and American markets that we are familiar with. Therefore, we have given the Chinese market full autonomy. For example, this time FOREVER. FASTER.'s brand marketing campaign, the Chinese market will do a brand communication strategy rooted in the local area on the basis of the same general direction. 」
Through careful observation, we can find that the slogan in this global brand refresh is FOREVER.FASTER. See the game like we do has a Chinese version in China - FOREVER. FASTER. Heroes, see differently. This is the result of the localization of the Group's brand broadcasting in China, with the aim of allowing more Chinese consumers to better perceive the core value of the brand.
In addition to telling PUMA's brand story in China, the sales model of the product also needs to be adapted to local conditions. Even though the DTC model has achieved phased success in China, the birthplace of live streaming e-commerce, PUMA will still value the connection between brands and consumers in offline scenarios in the future.
According to Arne, the number of PUMA flagship stores in the Chinese market needs to increase in the future, and the group hopes to better tell the brand story and convey the brand culture to Chinese consumers through offline and online models. He also stressed that China is too big for brands, and different regions and cities require completely different business models.
It can be seen that the most important thing for Arne, the new owner, and Richard, the head of brand strategy, to do in the Chinese market is to find a balance. A balance between PUMA's professional sports and trendy brand recognition, a balance between an innovative business model and a traditional distribution model, and a balance between online digitalization and offline materialization of brand communication.
In fact, the problems encountered by PUMA in the Chinese market will also appear in various markets around the world in the future. The answer to the question of how the brand, which has grown with the development of sports in modern society, can maintain its longevity, and how the 76-year-old cougar can achieve lightning speed and stamina at the same time, may be hidden in the next decade.