The Footwear Industry Is In An Unprecedented Predicament.

< p > China Sports < a target= "_blank" href= "//www.sjfzxm.com/" > dress < /a > industry has been in an unprecedented predicament, some of which must be eliminated by the market.

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< p > April, several Chinese sporting goods Brand Company including Lining and PEAK sports launched large discount promotions at major supermarkets in Beijing.

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< p > for example, the "a href=" //www.sjfzxm.com/news/ "sportswear" /a "products of the Wuming supermarket do activities with an average of 50% discount.

What's unusual is that this promotion lasted two weekends.

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In the same month, Lining's T-shirt was sold at a price of 19 yuan (US $3) per piece on one of China's largest online retailers, with a discount of 80%. P

These products were the backlog of Li Ning Co 2 to 3 years ago.

Long term backlog stocks are usually digested by outlets, low-end markets and charitable donations.

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< p > although April is usually the sports product such as sports a target= "_blank" href= "//www.sjfzxm.com/" > shoes < /a > and sportswear season promotion time, it should be the season for new products to compete on shelves.

Before spring, most parts of China are still too cold for outdoor activities. Retailers usually use this time to promote off-season sports products.

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< p > obviously, the recent promotions, both in terms of scale and time, are different from previous ones, reflecting the inventory crisis of sports apparel companies.

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< p > domestic brands have always had high expectations for the sports market. They believe that Beijing will grow at least 20% a year after the Olympic Games.

Almost all sports Brand Company have pressed the expanded button to open more shops and make full use of their production lines.

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< p > but with the economic downturn and the demand for sports goods cooling down, the market began to grow at a single digit rate in 2010.

The sudden and unexpected flare up of the stock and accumulation of receivables caused the company to stop expanding.

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< p > China's 6 major sporting goods listed companies include Anta, Lining, PEAK sports, China trend group, XTEP and 31st degree.

Last year, only 331 companies increased the number of stores, and the other 5 companies closed a total of nearly 5000 stores.

This company's downsizing continues this year, and Lining closed 1200 stores this year.

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< p > blind expansion is also the result of abnormal financial practices.

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< p > Chinese sporting goods companies have never been accustomed to knowing the amount of money sold to the final consumers.

The amount of money that can be sold to wholesalers and distributors is considered to be their sales.

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Distributors usually need a period of time to sell products, and distributors have the habit of hoarding inventory to cope with the risk of price rise in the future. Therefore, the number of actual sales to end customers may be far lower than the figures displayed on the asset debt table of sporting goods manufacturers. P

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< p > incorrect information makes producers optimistic about market potential, resulting in excessive inventory accumulation.

Since inventory can not be sold and the huge sales network is maintained, the profit margins of manufacturers will inevitably drop.

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Lining P lost the first loss since 2004, reaching 1 billion 980 million yuan last year, mainly due to the huge amount of money allocated by Li Ning Co to deal with backlog stocks.

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< p > other companies are trying to create profits, but they are witnessing a sharp slide.

Anta sporting goods company, the largest revenue maker of sporting goods and apparel in China, witnessed the company's net profit drop 21.5% to 1 billion 360 million yuan in 2012.

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< p > it is no exaggeration to say that "a href=" //www.sjfzxm.com/news/index_c.asp "China sports apparel" /a "is experiencing their most difficult period.

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< p > if the fate of large listed companies is a disaster, the situation of small companies is nightmare.

According to the China National Business Information Center, the proportion of small business bankruptcies was 20% last year, the highest proportion in 5 years.

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< p > reported that the reduction of orders and high inventory is still a key issue.

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< p > for Chinese sportswear manufacturers, if the high inventory in the weak market environment is not the end of the world, then the lack of future development strategy really indicates the end of the day.

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< p > Liu Wenru, mayor of Jinjiang, Fujian, said recently: "a target=" _blank "href=" //www.sjfzxm.com/ "> clothing < /a > factories and shoe factories can make money by increasing production capacity has become a past tense.

Jinjiang has produced 20% of the world's sports shoes to meet 40% of the domestic demand.

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< p > "it is time to learn to focus on innovation and design, increase differences in marketing, and compete with high-end foreign brands."

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< p > but it is not easy to change from simple manufacturer to designer. China's < a href= "//www.sjfzxm.com" > sportswear company < /a > is not good at improving marketing differentiation.

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