What Did Skech Win In The Chinese Market?

In the Palazzo Matteotti hotel in Church of Duomo, the space was decorated with a sense of future. The international fashion people who came to the exhibition were surprised at what they saw. Models walked on the stage with models from the American sports and leisure brand Skech (Skechers) and Ricostru's first series of costumes. Many industry people did not know that the shoes featured brands also made garments, and they also collaborate with Chinese independent designers.

In fact, this is not the first intersection between the two sides. Two years ago, it was also in the fashion week of Milan, and Cage China began to take a small test with Ricostru designer Ou Minjie, matching Skech DLT-A sneakers with their 2018 spring summer clothing. But this time, Cage no longer wanted to show her shoes. Ou Minjie wrote a series of costumes for her creation. "Will a girl in 2049 dream of 1992?" (Does A 2049 Girl Dream of 1992?) is the theme. The design of the retro futuristic style seems to be paying tribute to Philip Dick's bionic dream of electronic sheep. "

Joint cooperation with designer brands highlights Cage's determination to make efforts in the field of clothing. But in addition to this, brand new moves in China are also increasing. In January of this year, Cage, China has opened a super store with a single store area of over 1000 square meters in Shenyang, Jinhua, Qingdao and other non tier cities. In the context of continuing cold business, many brands have turned off physical stores. The US fast fashion brand Forever 21 has recently declared bankruptcy and will close its 350 stores worldwide.

But Skech does not seem to have such concerns in China. According to Zhang Ruiyan, vice president of Chinese market and store development, Zhang Ruiyan, Cage has already planned 49 stores in China, and this figure will only grow faster. The brand's revenue in 2018 exceeded 14 billion 100 million yuan, an increase of 36% over the same period last year.

The development of international brands in China is not always easy, and the sports and leisure fields that are specialized and tide brand are fiercely competitive. Skech's journey in China was not smooth. Until 2014, its brand communication power in China began to show prominence. In just 5 years, Cage quickly won the market. What else did Cage do?

　 Find a good partner.

Earlier, the international sports brand should open up the situation in the Chinese market, often through proxy or distribution way to open channels, to achieve rapid expansion. However, there are risks in this way. First of all, this is not conducive to brand image building and long-term brand building. Secondly, traditional retail channels rely on distribution mode. Distributors and agents often act as agents at the same time and choose suitable partners, which is also a difficult problem for brands.

In 2008, Cage chose to enter the Chinese market through cooperation with Chinese enterprises and joint ventures. The partner is the Hongkong based group, which is the first to focus on freight business. In 1980s, Chen Shouren, the founder of the group, founded a garment factory in Saipan, Philippines. Today, the group's business covers more than ten fields, including clothing, logistics, fisheries, real estate and so on.

Skech, President of China, Southeast Asia and South Korea limited, Chen Weili, whose father is the founder of Chen Shouren group, Chen Shouren, is the source: China Daily

As a garment manufacturing supplier, Luen Tai has rich experience in garment manufacturing, perfect supply chain and strong retail business. Its customers include Coach, Polo Ralph Lauren, Liz Claiborne and fast marketing group. In terms of business mode, the group began to implement D2S (from design to shop) strategy, that is, it helps customers develop R & D and provide logistics services at the same time. And for Lian Tai, they have become a bridge between fabric suppliers and distributors.

In October 2007, Skech set up a joint venture with Hongkong Lutai group's joint Thai company, Skech China Limited. Both sides accounted for 50% of the shares. In the form of joint venture, on the one hand, it helps the brand develop a more in-depth localization marketing strategy. On the other hand, Mr Zhang said: "compared with the past dealers and agents, we can build a brand better through joint venture mode, not just focus on the expansion of its channels." For Cage, Lian Tai has capital, experience and channels, and for Lian Tai, it is exactly what Cage needs to sell all kinds of shoes and shoes.

　　 Sales of all categories of products aimed at market segmentation

The sports market is a cake to be cut. In recent years, national fitness has become a common trend, and the enthusiasm for women's sports is increasing. The market for children's shoes should not be underestimated. This is just a simple age classification. With the continuous street style of luxury brands, consumers have more diversified demand for sports products. Professional sports products and trend sports products have become popular market demand. In the face of diversification of consumer demand, brand strategy needs to be differentiated to satisfy consumers.

Cage's products are generally defined by age and functionality, including positioning young and fashionable D Lites retro sneakers, GOwalk walking shoes favored by aging consumers, S-Lights children's shoes with flashing decorations, and Go Run series for professional running. In 2014, Skech's most classic "panda shoes" became a bomb for the Korean drama "you from the stars". This shoe belongs to the Cage brand's flagship antique fashion and comfortable series D 'lites.

Although Cage's products have a wide range of audiences, their products also have characteristics and identification. In function, Cage's footwear products always emphasize comfort. In design, Cage's shoes have the characteristics of retro and fashion style. In addition to the flagship footwear, Cage China has independently developed and launched its clothing design, and its clothing sales share has reached 15% to 20%.

In addition, cooperation with independent designers is also in the plan of Cage China. This cooperation with the Chinese designer brand Ricostru is not only regarded as an important step in the localization operation of the brand, but also an attempt by Skech to aim at the market segmentation. "The attention of consumers is very limited, and brands need to constantly give fresh products to satisfy them," says Zhang. For Skech, the reason for choosing Ou Minjie is not only that she can present a new style, but more importantly, there is something in common between them. Ou Minjie's design has the style of futurism, while Skech is famous for its retro style. The combination of them is the most typical retro style of fashion design (Retro-Futuristic). In addition, on target customers, Skech and Ricostru also have overlapping parts, that is, young women - nearly 65% of Cage's revenue comes from women's sales.

The series will be launched in the first quarter of 2020, and will also be sold in selected stores in China. "We are not a simple cooperation. We want to have a close and growing relationship," Zhang Ruiyan said.

In addition, Zhang Ruiyan said that Skech is planning to cooperate with different designers to meet the diverse needs of consumers, and the collision and combination of creativity on both sides is also the key to make the differentiation of products. At the same time, the overall product layout is conducive to the development of market segments and more targeted.

　 Timely adjust sales direction and grasp localization strategy.

In the face of the rapidly changing consumer market, new retail has become the goal of retail development while the electricity supplier is growing rapidly. At this time, the brand's rapid response capability is much more needed than before.

Skech also experienced the trouble of brand positioning and shop location in the early days of entering the Chinese market. After four years of labor pains from 2008 to 2012, Cage quickly adjusted his strategy. On the product line, Cage quickly launched a product line for each consumer layer, developing more than 3000 shoes and 10000 SKU each year.

In view of the Chinese market, Cage paid more attention to the implementation of localization strategy, aiming at quicker understanding of local consumers in a shorter time and responding in time to meet their needs. Compared with the direct camp mode, the advantages of the joint venture mode in the localization strategy of the brand are prominent, and Cage China has more autonomy.

Despite the clear division of functions between Cage and China, the United States is responsible for design and R & D, and China is responsible for brand building and channel development. But Zhang Ruiyan stressed: "the brand DNA is the cultural foundation of our Cage, but specifically, we Cage China will also give feedback to the US headquarters, and we will make some localization adjustments based on China's values and culture." Based on this, Cage will refer to the feedback from the Chinese market and introduce some Chinese limited series. Cooperation with Chinese independent designers is also an important step for Skech to implement localized marketing strategy.

On the other hand, in the expansion of channels, China's retail industry is also different from the retail industry in the United States. The most notable point is that China's retail industry is highly dependent on single store and large volume shopping centers, while the retail industry in the United States still depends on department store stores and warehouse supermarkets. In terms of pricing strategy, Skech grabbed a price gap in the Chinese sports brand market, that is, the gap between international brands such as "Lining" and other domestic sports brands and "Nike".

In addition, since 2018, Cage began to lay out a new retail plan. In January 2019, Cage, China's first super store, opened in Shenyang. The direction of the super store layout is aimed at China's three or four tier cities, so as to carry out brand sinking. "The market of second tier cities is actually relatively saturated. People in the three or four tier cities have relatively high per capita disposable, higher happiness index and relatively small pressure." Zhang Ruiyan said to BoF.

However, China's consumer market can no longer be simply classified as a city level. This complex and multi-dimensional economic development shows a simultaneous phenomenon of consumption upgrading and consumption demotion. A significant signal is the success of many products and the continuous warming of the luxury market. The consumption index of the three or four line cities continues to grow, which opens wider markets for brands. According to the 2019 "sinking market" illustrated by the first financial and business data center, the user scale has reached 670 million in China's sinking market.

　　 Incubating youth culture and narrowing the distance from young consumers

Young people have become the main force of consumption. Youth culture is also evolving from sub culture to mainstream culture. At this point, brands need to listen to the voices of young consumers. In China, such as hip-hop, hip-hop and other entertainment programs such as hip-hop and hip-hop have become more and more popular. The Breaking project in hip hop became one of the events of the 2018 Buenos Aires Youth Olympic Games, and was also selected as an alternative to the 2024 Paris Olympic Games, which means that street dance began to be regarded as a popular dance sport.

Cage's audience has always been a young consumer. Although the brand had experienced an image aging in China, its GoWalk walking shoes were once called "old shoes". But the brand name came from California slang at the beginning of its creation, meaning "sitting young people". As early as 2000, Skech Britney Spears, a popular icon, was the global spokesperson. In China, Skech has signed celebrity celebrities such as Li Yifeng, Tang Yan, Wu Chun, Dou Xiao, Lok Wah seven sons Next, Huang Zitao and so on, who are popular with millennial youths, as well as the popular variety such as "idol trainee" and "creative camp 2019".

This is not just a superficial marketing. In fact, street dance is part of the Skech brand DNA, which was born in Losangeles in 1990s and cooperated with many singing and dancing superstars and West Coast hip-hop groups. This also makes hip-hop a good brand localization.

Skech first supported and promoted hip-hop culture in China in 2010, mainly for college students. At that time, the youth culture activity of street dance was still a minority group. In 2014, Cage opened a training camp called "the art of hip-hop", and later renamed the "Cage street dance academy". So far, the top street dance masters at home and abroad have been invited to teach free classes in more than 20 cities in China, providing convenient opportunities for young people who love hip-hop.

In the same year, Skech worked with top domestic dancers and hip-hop culture promoters to set up the "Skechers Cage Star" (All China), representing China's hip-hop cultural exchange overseas. In September of this year, Cage held the 2019 annual Battle In Shanghai hip hop competition jointly with the top domestic hip hop brand Caster. "Through street dance, I am very inspired by the spirit of young people, and let Cage know more about the young people's ideas and their real needs," said Zhang Ruiyan. According to her introduction, Skech will also carry out more related cross-border projects next.

In China, Skech, who is developing rapidly, is now the "sitting young man".