In the Pal az zo Matteotti hotel where Milan Cathedral can be seen, the space is extremely futuristic, and the international fashion industry people who came to visit were surprised by what they saw-the models wore sports and leisure from the United States Brand Skechers and Ricostru's first joint collection of clothing , on the display-and many people in the industry do not know that this brand featuring shoes also produces ready-to-wear, and also works with Chinese independent designers cooperating.
In fact, this is not the first time the two sides have met. Two years ago, also at Milan Fashion Week, Skecher China started with Ricostru's designer Ou Agile small test knife, matching Skecher DLT-A sneakers with its spring and summer 2018 clothing . But this time, Skecher no longer wanted to show off his shoes. The joint clothing series created by Ou Jieji is based on "Does A 2049 Girl Dream of 1992?" As the theme. The design that focuses on retro futuristic style also seems to pay tribute to Philip Dick "Do bionic people dream of electronic sheep?"
The joint cooperation with designer brands underscores Skechi China's determination to work hard in the field of apparel. But in addition to this, the brand's new actions in China are also increasing. As recently as January this year, Skecher China successively opened super-large stores with an area of more than 1,000 square meters in non-first-tier cities such as Shenyang, Jinhua, and Qingdao. In the context of continued cold conditions in the retail industry, many brands have closed down physical stores. Forever 21, a fast-fashion American brand, has recently declared bankruptcy and will close 350 of its global stores.
However, Skecher does not seem to have such concerns in China. According to Zhang Ruiyan, the vice president of market and store development of Skecher China, Skecher China ’s super store has already planned 49 stores. This number will only increase Fast growth. The brand's revenue in China in 2018 exceeded 14.1 billion yuan, an increase of 36% year-on-year.
The development of international brands in China has always been difficult. Competition in the field of sports and leisure, where professional and trendy brands come together, is even more intense. Skechi's journey in China was not smooth, and it was not until 2014 that its brand communication power in China began to stand out. In these short 5 years, Skechi quickly won the market. In addition to co-branding and opening new stores, what did Skechi do right?
Find a good partner
Earlier, when international sports brands wanted to open up the Chinese market, they often adopted agents or distribution methods to open up channels and achieve rapid expansion. However, this method also has risks. First, it is not conducive to brand image building and long-term brand building. Second, traditional retail channels rely on distribution models. Dealers and agents often represent multiple brands at the same time and choose the right one. Partners are also a problem for brands.
In 2008, Skecher chose to enter the Chinese market through cooperation with Chinese companies and the establishment of joint ventures. The partner is Luen Thai Group, headquartered in Hong Kong. In the 1980s, the founder of the group, Chen Shouren, opened a garment factory in Saipan, Philippines. Today, the group's business scope covers more than a dozen fields including garment manufacturing, logistics, fishing, real estate and so on.
Chen Weili, the president of Skechers China, Southeast Asia and South Korea Co., Ltd., and his father is Chen Shouren, founder of Luen Thai Group | Image Source: China Daily
As a clothing manufacturing supplier, Luen Thai has extensive clothing manufacturing experience, a complete supply chain and a strong retail business. Its customers include Coach, Polo Ralph Lauren, Liz Claiborne, and Fast Retailing Group. In terms of business model, the Group has long been implementing D2S (from design to retail) strategy, that is, Luen Thai not only helps customers to conduct R & D and design of clothing, but also provides logistics services. For Luen Thai, they have also become a bridge between fabric suppliers and sellers.
In October 007 , Skechi established Skechi China Co., Ltd. in a joint venture with Luen Thai Enterprises, a subsidiary of Luen Thai Group in Hong Kong, with each party holding 50% of the shares. Adopting a joint venture will help brands develop a more in-depth localized marketing strategy. On the other hand, Zhang Ruiyan said: "Compared with the previous form of distributors and agents, through the joint venture model, we can better build A brand, not just focusing on the expansion of its channels. "For Skech, Luen Thai has the capital, experience and channels, and for Luen Thai, an international brand that sells full-featured footwear like this, Just what they need.
Selling full range of products, targeting market segments
The sports market is a cake to be cut. In recent years, nationwide fitness has become a general trend. Women's enthusiasm for sports is increasing, and the children's shoes market cannot be underestimated. This is just a simple age classification. With the continuous stylization of luxury brands on the streets, consumers have more demand for sports products, and professional sports products and trend sports products have become popular market demand at the same time. Facing the diversification of consumer demand, brands also need to adopt a segmented trend in product strategies to satisfy consumers.
Skecher's products are generally divided by age and functionality, including D'Lites retro sneakers that are young and fashionable, GOwalk shoes that are popular with older consumers, S-Lights children ’s shoes with flashing decoration, and professional Go Run series for running, etc. In 2014, Skecher's most classic "Panda shoes" became a hit because of the Korean drama "You from the Stars". This shoe belongs to the Skecher brand's main retro and comfortable series D'lites. .
Although Skech's product audience is wide, its products also have characteristics and recognition. In terms of function, Skech's footwear products always emphasize comfort. In design, Skech's footwear has both vintage and Trend style characteristics. In addition to the main footwear, in terms of categories, Skechi China also independently developed and launched ready-to-wear designs, and its clothing sales accounted for 15% to 20%.
In addition, cooperation with independent designers is also in the plan of Skechers China. This collaboration with Ricostru, a Chinese designer brand, is not only seen as an important step in the localization of the brand, it is also an initiative of Secchi to target market segments. "Consumers' attention is very limited, and brands need to constantly give fresh products to satisfy them," said Zhang Ruiyan. For Secchi, in addition to her ability to present a new style, the reason why she chose Euro Agile is more important. European agile design has futuristic style characteristics, while Skechi is known for its retro style. The combination of the two is the most typical retro-futuristic style in fashion design. In addition, in the target customer group, Skecher and Ricostru also have a overlapping part, that is, young women-Skechers nearly 65% of its revenue comes from the sales of women's models.
This series will be available in the first quarter of 2020. In China, it will also be sold in limited select stores. "We are not a simple cooperation, we want to form a long-term and close relationship," Zhang Ruiyan said.
In addition, Zhang Ruiyan said that Skechers is planning to cooperate with different designers to meet the diversified needs of consumers, and the collision and combination of creativity on both sides is also the main point to create their product differentiation. At the same time, the product distribution of the entire category is conducive to the development of market segments and is more targeted.
Timely adjust sales direction and grasp localization strategy
In the face of the rapidly changing consumer market, while e-commerce is still growing rapidly, new retail has become the goal of the development of the retail industry. At this time, the rapid response capabilities of brands need to be improved more than ever.
In the early days when Skechi entered the Chinese market, it also experienced difficulties in brand positioning and shop location. After four years of painful period from 2008 to 2012, Skechi quickly adjusted its strategy. On the product line, Skecher quickly launched a product line for each consumer layer, developing more than 3,000 shoes and 10,000 SKUs each year.
Aiming at the Chinese market, Skecher pays more attention to the implementation of localization strategies. The goal is to understand local consumers faster and respond in a shorter time to meet their needs. Compared with the direct operation mode, the advantages of the joint venture model in the localization strategy of the brand are prominent, and Skechi China has more autonomy.
Despite the clear division of functions between SKECHERS China and the US headquarters, the US is responsible for design and R & D, and China is responsible for brand building and channel development. But Zhang Ruiyan emphasized: "The brand's own DNA is the cultural foundation of our SKECHERS, but specifically, SKECHERS China will also feedback to the US headquarters, and we will make some local based on Chinese values and culture. Based on this, Skecher will refer to the feedback from the Chinese market and launch some Chinese-limited series. Cooperation with Chinese independent designers is also an important step for Skechi to implement localized marketing strategies.
On the other hand, in terms of channel expansion, China's retail industry is also very different from the US retail industry. The most significant point is that China's retail industry is highly dependent on single stores and large shopping malls, while the US retail industry still depends on department stores and warehouse supermarkets in the aggregate store model. In terms of pricing strategy, Skecher has seized a price vacancy in the Chinese sports brand market, that is, the gap between domestic sports brands such as "Li Ning" and well-known international brands such as "Nike".
In addition, since 2018, Skechers has begun a new retail plan. In January 2019, SKECHERS China's first super store opened in Shenyang. The layout direction of the super store is aimed at China's third- and fourth-tier cities, in order to sink the brand. "The market in Tier 1 and Tier 2 cities is actually relatively saturated. People in Tier 3 and Tier 4 cities have a higher per capita disposable, higher happiness index, and less pressure." Zhang Ruiyan told BoF.
However, China's consumer market is no longer able to simply use the city level as the standard for dividing. This complex and multi-dimensional economic development situation presents the phenomenon of both consumption upgrade and consumption degradation. A significant signal is the success of a lot And the luxury market continues to heat up. And the growing consumption index of third- and fourth-tier cities has opened up a wider market for brands. According to the "Sinking Market" Illustrated Book 2019 published by China Business News Data Center, the number of users in the sinking market in China has reached 670 million.
Incubate youth culture and narrow the distance with young consumers
Young people have become the main force of consumption. And youth culture is also evolving from subculture to mainstream culture. At this moment, brands need to listen to young consumers. In China, with the popularity of entertainment programs such as "Hip-Hop in China" and "This Is Hip-Hop", youth cultures such as hip-hop music and hip-hop are beginning to receive more and more attention. The "Breaking" project of hip-hop became one of the 2018 Buenos Aires Youth Olympic Games and was also selected as a candidate for the 2024 Paris Olympics. This means that hip-hop is beginning to be regarded as a kind of Popular dance sports.
Skechi's audience has always been young consumers. Although the brand has experienced image aging in China, its GoWalk shoes were once called "senior shoes", but since its inception, its brand name has come from California slang, meaning "unable to sit young people" . Back in 2000, Skecher signed the pop icon Britney Spears as a global spokesperson. In China, Skechers signed Li Yifeng, Tang Yan, Wu Zun, Dou Xiao, Lehua Seven Sons Next, Huang Zitao and other celebrities loved by millennials, and sponsored "Idol Trainees" and "Creation Camp 2019" Wait for popular variety shows to strengthen the young image of the brand.
This is not just superficial marketing. In fact, hip-hop is part of the Skechi brand's DNA. The Los Angeles-born brand cooperated with many singing and dancing stars and West Coast hip-hop groups in the 1990s. This also makes hip-hop a good brand for brand localization.
Skechers supported and promoted hip-hop culture in China as early as 2010, mainly for college students. At that time, hip-hop was a youth cultural activity that still belonged to a niche state. In 2014, Skechers opened a training camp called “The Art of Hip-hop”, which was later renamed “Skidge Hip-hop Academy”. So far, it has invited top hip-hop masters at home and abroad to teach for free in more than 20 cities in China, to love Hip-hop teenagers provide a convenient opportunity.
In the same year, Skechers also cooperated with the top domestic dancers and hip-hop culture promoters, and established the Skechers All Star Dance Team in China to represent hip-hop cultural exchanges overseas. In September this year, Skecher teamed up with domestic top hip-hop label Caster to host the "Battle In Shanghai" hip-hop competition in 2019. "Through hip-hop, I was very inspired by the spirit of young people, and also made Skecher better understand the thoughts of young people and their true needs," said Zhang Ruiyan. According to her, Skecher will also carry out more related Cross-border project.
In China, Skeech, who is developing rapidly, now seems to be the "young man who can't sit still."
Source: BoF Author: BoF Team