On July 23, 2021, the domestic sports brand Hongxing Erke detonated the network with "bankruptcy donations" to the rainstorm-stricken areas of Henan, and its sales performance once doubled by 52 times, and many products were out of stock. Now, after 100 days, the heat at that time has gradually dissipated, what kind of situation is Hongxing Erke facing?
Recently, Red Star Capital Bureau visited a number of Hongxing Erke stores and found that the "wild consumers" who were flocking to the market have gradually left the market, and the flow of people in the stores has decreased significantly; in the past month, the number of its Douyin fans has also plummeted, with an average of nearly 10,000 fans per day. In addition, its live sales are not optimistic, and the fan purchase rate is lower than that of similar domestic sports brands.
At a time when consumers tend to be rational, fan stickiness and purchase rate have become the biggest problems that Hongxing Erke needs to face.
Attention plummeted
On average, nearly 10,000 powder is dropped every day
On July 23, 2021, Hongxing Erke also donated 50 million yuan to the henan rainstorm disaster area under the condition of its own consecutive years of losses, which attracted public attention. For a time, the topic of Hongxing Erke's "bankruptcy donation" dominated the screen network, and netizens went to the live broadcast room to place orders to show support.
On the same day, Hongxing Erke directly broke a number of records: sales soared 52 times, the total sales exceeded 22 million yuan, and many products were once out of stock.
The next day, many consumers rushed to the Hongxing Erke physical store to punch in support, and even appeared "men buy 500 to pay 1000 to pull their legs and run", "even the clothes on the model were stripped off" and other wild consumer behaviors. Even Wu Rongzhao, chairman of Hongxing Erke, had to personally go down and call on netizens to "rational consumption".
Nowadays, Hongxing Erke's bankruptcy donation has been 100 days, and the Red Star Capital Bureau recently visited a number of Hongxing Erke stores and found that the offline flow of people in the stores has been greatly reduced. Many clerks told Red Star Capital bureau that the current customer flow in the store has returned to normal compared with the peak period in July and August, except for a few shoes that are broken, the goods are complete.
In addition, after the popularity, the number of fans on the Hongxing Erke online platform has also plummeted. Feigua data shows that as of press time, the number of fans on the Hongxing Erke Douyin platform is 14.556 million, an increase of -269,000 in the past month, and nearly 10,000 fans are dropped almost every day. Taking October 31 and November 1 as an example, the "Official Flagship of hongxing Erke brand" Douyin lost 8568 fans and 6167 people respectively, and only on October 11, shanxi rainstorm donation day, it added 1192 fans.
In addition to the above accounts, the "Hongxing Erke Wu Rongzhao" Douyin number, which is certified as the president of Hongxing Erke, has also increased negatively in the past 30 days, dropping 209,000 fans.
In addition, the number of fans on the Hongxing Erke Kuaishou platform was 3.748 million, an increase of -53,000 in the past month, and an average of 2,000 powders per day. Taking October 31 and November 1 as an example, 1,900 and 1,600 people lost powder, respectively.
Low fan buying rate
In the past month, the live broadcast sales are only 1/6 of Li Ning
Red Star Capital Bureau noted that although there have been moments of "wild consumption" by fans, the realization rate of Hongxing Erke fans is generally not high. Especially in the past month, Hongxing Erke Douyin live broadcast sales are only 1/6 of Li Ning's.
Feigua data shows that the official flagship store of the Hongxing Erke brand with 14.556 million douyin fans has 55 live broadcast sales of 12.941 million yuan in the past month, with a per capita contribution of 0.88 yuan. Among them, in the past 7 days, because of the blessing of "Double Eleven", the sales of 10 live broadcasts in the Live Broadcast room of Hongxing Erke Douyin exceeded 5 million yuan.
However, compared with Li Ning, who is also a domestic brand, the number of fans of Li Ning Sports Douyin is only 4.153 million, less than a fraction of Hongxing Erke, but its sales of 63 live broadcasts in the past month are 81.585 million yuan, which is more than 6 times the sales of Hongxing Erke live broadcast, and the per capita contribution is 19.6 yuan.
Hongxing Erke and Li Ning Sports Douyin live sales comparison
In addition, ANTA Sports, which has 3.841 million fans, has 40 Douyin live broadcasts in the past month, with sales of 23.213 million yuan and a per capita contribution of 6 yuan; Xtep China, which has 751,000 fans, has 60 Douyin live broadcasts with sales of 995,000 yuan in the past month, with a per capita contribution of 1.65 yuan.
In the domestic sports brand market, Hongxing Erke inevitably has to face competition from rivals such as Li Ning and Anta, so its current situation can be described as not optimistic.
Judging from the data disclosed by Li Ning, ANTA, Xtep, 361 degrees and others in the first half of 2021, domestic sports brands continue to exert their strength, and sales and operations show a growth trend:
Li Ning (02331.hk) achieved revenue of 10.197 billion yuan in the first half of the year, an increase of 65% year-on-year; Xtep (1368.hk) achieved revenue of 4.135 billion yuan in the first half of the year, an increase of 12.4% year-on-year, and the group's gross profit margin increased by 1.3 percentage points to 41.8%; 361 degrees (01361.hk) achieved revenue of 3.107 billion yuan and net profit of 401 million yuan in the first half of the year, an increase of 32.9% year-on-year; Anta (02020.hk) online business in the third quarter of this year increased by 25%-30% year-on-year.
Since Hongxing Erke was delisted in 2020, the financial data has not been publicly disclosed. Judging from the financial data previously disclosed by Hongxing Erke on the Singapore Stock Exchange, its losses from 2018 to the first half of 2020 were 298 million yuan, 2.958 million yuan and 600,000 yuan respectively, of which the revenue in the first half of 2020 was only 2.843 billion, compared with the performance of domestic sports brands in the same period, less than Li Ning's 1/5, nor 1% of ANTA's.
Hongxing Erke's financial situation this year can be glimpsed from the Tao data. Red Star Capital Bureau noted that as of November 2, Hongxing Erke's sales in the past 30 days were only about 1/4 of Li Ning's sales. According to the Tmall platform data provided by Tao Data, in the past 30 days, the total sales volume of the Hongxing Erke brand was about 620,000 yuan, with sales of 116 million yuan; the total sales volume of Li Ning's brand was about 3.12 million, and the sales volume was 400 million yuan.
Consumers tend to be rational
How can Hongxing Erke keep them?
At the beginning, consumers' "heartache" for Hongxing Erke's bankrupt donations triggered stages of irrational consumption. Judging from the data, the current consumer enthusiasm for Hongxing Erke has become rational. Baidu index monitoring data shows that Hongxing Erke's search index began to climb on July 22, peaking at 1214600 on July 24, and has since declined, remaining stable between 4000-5000 in September.
Do the tens of millions of fans who enter the market to support Hongxing Erke in wild consumption really recognize Hongxing Erke's products? What are the reasons for the fans who have left the scene in the hustle and bustle?
A Douyin fan told the Red Star Capital Bureau that in the comment area of the usual work, there are complaints about the old style and quality of Hongxing Erke, and some fans feel that the advertising creativity is not novel enough.
A Douyin user who recently took off Hongxing Erke told Red Star Capital Bureau that the previous attention to Hongxing Erke was during the donation period, with a curious attitude to brush the interesting comments in the live broadcast room, "but found that some styles are not very attractive to themselves, compared to other big brands Premium space is limited, there is no consumption." ”
Some consumers also said that they will continue to support Hongxing Erke, "Shoes do not need to be purchased frequently like food, after buying shoes before, they do not need to buy them for a short time, but they will give priority to Hongxing Erke in the future." "
Wu Rongzhao, chairman of Hongxing Erke, also realized the defects in the quality of Hongxing Erke and tried to establish the quality reputation of the brand. Some netizens reflected under his account that "some people say that the strange bomb series has a place with a foot", and Wu Rongzhao replied that "I can't stand having a foot", and said that he would "apologize to him and solve the after-sales problem for him".
So, when consumers tend to be rational, what should Hongxing Erke take to retain consumers?
Hongxing Erke's last increase in attention was on October 11, donating 20 million supplies to Shanxi Rainstorm. Baidu index monitoring data shows that on the day of donation, Hongxing Erke's search index ushered in the highest monthly, and the short video account with long-term fans also added 1192 fans on the same day. In the face of major social disasters, the figure of Hongxing Erke who "quietly donated" can also be seen.
After the donation was hot, Hongxing Erke also launched a series of brand activities to try to shape the brand power and enhance the brand tone. On November 1, Hongxing Erke and star Chen Xiaochun filmed the national style blockbuster "Under One Person"; in October, the Qingming Shanghe Garden and the "Romance of the Three Kingdoms" Five Tiger Heroes joint model were launched, and Chery Automobile launched the retro national tide series sweatshirt; in August, the Henan Museum joint model was launched, which was linked to the marketing with Xiaomi mobile phone; in July, it joined hands with "Gintama" to break through the dimensional wall.
In addition, Chairman Wu Rongzhao has also become a major attraction for Hongxing Erke to attract consumers. Wu Rongzhao was swept away by the flood in the early days of his business, and the image of Fujian businessmen who "once rained, so they also wanted to hold umbrellas for others" touched countless netizens. At present, Wu Rongzhao's Douyin account has 11.344 million fans, which is only about 3 million less than the brand flagship store.
Donations, brand endorsements and Wu Rongzhao have gradually become the three new labels that consumers are looking after. The Red Star Capital Bureau noted that the top three videos of Hongxing Erke's douyin likes in the past month were Shanxi rainstorm donations, Chen Xiaochun's joint endorsement and Wu Rongzhao's factory inspection.
Economist Song Qinghui has said that as the epidemic is under control, many domestic consumers have returned to the fitness field. Domestic sports brands are facing a new round of development opportunities, and the market scale is expected to further expand. But quality and innovation have always been the key issues that Hongxing Erke cannot get around in retaining "wild consumers" after the heat dissipates.
Red Star News reporter Yu Yao intern reporter Cai Xiaoyi
Responsible editor Ren Zhijiang Editor Yu Dongmei
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