How to avoid Li Ning error? How international markets such as Nike and other international brands close combat? When Anta with 4.45 billion yuan revenue in the first half of 2011 surpassed Li Ning, Jacky Xu, chairman of Picank Group, fell into thought. Xu Jingnan once thought, Li Ning is not only blocking Nike, Adidas's leading local enterprises, but also their most worthy of study competitors. But now it seems that the domestic industry leader translocation is a normal one. Peak will be the new leader Anta competitors? In the first half of this year, Peak's turnover and profit rose 24.7% and 32% respectively year-on-year, with a net increase of 395 stores to 7,619 stores. The sporting goods company, which used to be basketball in the past, is showing its rivals the "muscle" of its industry segments. Later than the Anta pike landing capital market, to challenge the former just got the market position, the need for more far-reaching business strategy. However, whether it is the competition of international or domestic sports brands, it has reached the stage of short-hand docking and any move of any kind may lead to defeat. How to avoid the mistakes Li Ning? How to continue to adhere to the professional strategy? How to find the future Li Ning, Anta's go-ahead, and even with Nike, Adidas positive move? Labor advantage only five years Reporter: Including the sporting goods industry, "Made in China", the most troublesome problem is the cost pressure brought by high inflation. Peak Why not this year, not only to control the scale, but invest 1 billion Heze in Shandong to build a fourth industrial base? Xu Jingnan: First of all, investment in Shandong Heze is Pick before the listing in Hong Kong in 2009, the established plan. Second, our investment on the north is also out of cost strategy considerations. Why? We, like other coastal manufacturers, face the cost pressure of high inflation, which is mainly focused on the costs of raw materials and labor. The top priority is to solve the labor issue. Including two aspects, one is where the workforce comes from and the other is how to maintain the labor price? At present, the turnover of labor force in coastal enterprises is frequent and the prices are high. For most enterprises in transition, it is very difficult to pass this pass. What to do? Where to move? One way is north, one way is the west. Finally, we have chosen Shandong Heze. Because compared to the drastic outflow of labor force in the west, Heze, Shandong is not only a population market, but also less outflow of labor, more importantly, the local labor price is lower than in Guangdong and Fujian 500 to 1,000 yuan / month. However, Heze, north Shandong is only an expedient measure. This is the last train to catch the cheap cheap labor. The maintenance time of this train also in 5 years. After that, the problem of labor cost will be put before us again. At that time, our only way out is to divert orders to Indonesia and Laos, these ASEAN countries. Anta instead of Li Ning, or who would replace Anta, these are not important, the key is to see our local sports goods business model is like? If we still rely on their own investment, own manufacturing products, always living in the bottom of the industrial chain. Our current performance, mainly by demographic dividend, not the brand value to accomplish. Our industry model should be the Nike and Adidas model, that is, say goodbye to manufacturing, to the brand licensing, design and services and other higher industrial chain, in order to essentially avoid the problem of labor costs. Reporter: Why in this round of inflation, whether it is Nike, Adidas, or local sports brand, not only there is no collective price increases, but to increase discounts? Is excess capacity, or forced by market competition choice? Xu Jingnan: Who is willing to put their hard-to-market products to get discounted? This is our confusion in this industry. Not only now, but also the past, but more so this year. What are the reasons? First, changes in policy environment, the second is caused by the industrial model of Chinese and foreign sports brands. Macro-control squeeze liquidity, consumer confidence will be reduced, they will game manufacturers, such as falling prices of goods. Manufacturers, starting from the end of 2010 consumer demand increases, most manufacturers are expanding capacity, leading to inventory problems this year, the best way is to cut prices. Why Nike does not have manufacturing plants in China, Adidas will join the discount ranks? This is because they need to continue to increase the market share of different consumer levels, on the other hand they have the ability to price war, because the right to have the order , They do not take into account the cost of the manufacturer, this one do not do it for another. This sustained discount after the war, the most injured must be a local brand. The fact is, Li Ning, Anta, Xtep have appeared orders slowed. Peak how to do? Our strategy is "first increase after the delay," orders for the second quarter of next year, from the previous quarter's 20.2% growth dropped to 9.5% growth. On the one hand is to reduce the burden on dealers , on the other hand the control of operational risk, from high-speed growth into a steady growth, according to the actual situation next year and then decide. Reverse international Reporter: Peak in the first half to 2.26 billion yuan in the basketball equipment market to occupy the first place, although the performance ranking on the pressure of China's move, but still Anta, Li Ning, 361 degrees, Xtep. These before and after the attacker are all sporting goods brand, Peak will therefore change the industry segments of the brand positioning? Xu Jingnan: corporate resources are always limited. Li Ning, when the goal is very clear, is to do gymnastics related products, and now the business is big, covering almost all of the sports product line. The question is, are each project's resources fully prepared and powerful? We would like to mention Pick is equivalent to basketball, basketball mentioned that Pick. Practice has proved that we have done it. We spent more than 20 years on the production, technology, marketing, brand, international and so on to accumulate. Our result is not only becoming a FIBA ​​global strategic partner, but also having 15 NBA superstar endorsers. But I think it is not enough, because there is a competitor, which is our motivation to continue to develop the concept of basketball. In addition, we play on the international route is basketball. If we give up the positioning of specialized segments and turn into the manufacture of all sports products, Pick will abandon the first two decades of the stock market and become a vaguely ambiguous brand although it can speed up the market share of Anta and Li Ning. If ranked, I care about the ranking of basketball equipment, our share of the first, up 17%. Reporter: Peak basketball brand development, the implementation of a reverse international strategy is to invest in marketing resources in the United States, and then, including China, including the global market for marketing. Now, what are the gains and losses of this globalization strategy? Xu Jingnan: First, "too." Peak's internationalization strategy was set 20 years ago. During these 20 years, we have made sufficient preparations, including changing the brand name from "Feng Deng" to "Peak" and building an international management system. In the first half of 2011, Pick's overseas sales increased by 20.2% YoY and accounted for 10.3% of Pick's total sales revenue. This achievement is absolutely superior to that of its domestic counterparts. Besides "lost", since Peak's previous energy mainly in basketball, and the global basketball center in the United States, so we focus on the NBA, delaying the development of the domestic brand. But this so-called "loss" is, in turn, a "win." It is our registration of the "Peak" brand in the United States, through appeals, dismissed, re-appeal and other unremitting efforts, Pick before entering the NBA Palace, and become one of the core global basketball equipment brands. Look back at the local sports brand, although the wall incense, but the wall is not fragrant. Li Ning bid for the title? Is to register in the United States after the internationalization, but on the contrary, the future is uncertain. In contrast, our first step is to make the wall fragrant, and the formation of misplaced local brands strategy. It now appears that we coerce NBA elements to enter the market outside the United States, but reflects a strategic value. It does not matter how much Picank can make in the U.S. market in the future. Because Peak's goal is to drive the global market through the U.S. market, the benefits are not the return on the U.S. market, but the radiative effect. In other words, the annual growth and profitability of the Chinese market may not be guaranteed without investment in the United States market; and without the NBA's brand layout, Pick's high-end and professional brand image will not be so popular. Seek capital market attitude Reporter: Peak not only international brands, but also the capital of the international, so Pick eventually listed on Hong Kong, but listed on the very day 2009, below the issue price. In addition, this year's interim results show that turnover and gross profit increased over the same period last year, but after the Peak stock price continued to decline, the market value of more than 2.3 billion evaporation. Why Pick not protected by the capital markets in Hong Kong? The next step should be how to do? Xu Jingnan: We can indeed choose to go public in Hong Kong. Maybe our stock will perform better than Hong Kong. But our strategy is to brand internationalization. Therefore, the internationalization of capital must be our inevitable choice. The biggest problem we encountered was that basketball was not a mass project in Hong Kong. Investors lacked a clear understanding of basketball. Therefore, their understanding of the basketball strategy for Peak still remains to be seen. The cold side of the capital markets is exactly the opposite of our performance. Our interim results show that in the first half of the year, gross profit reached 900 million yuan, an increase of 32.0% over the same period of last year. In the first half of the year, there was another 130 million yuan in cash. Currently, the cash in Peak is 2.6 billion yuan. Our development is benign. Investment in our Sequoia Capital, Lenovo Investment, CCB International three PE, there is no plan to withdraw, still optimistic about our growth. Therefore, we still expect the attitude of the capital market to change. The good news for the market this year is that we will set up a number of R & D bases and production bases, including a R & D base of 20 million yuan in Beijing and two production bases in Fujian and Jiangxi Province with a planned investment of about 80 million yuan and two production bases in Heze, Shandong 1 billion yuan production base construction plan. I believe that as these factories are completed and put into production, they will enhance our strength in market segments and the investment market will start to take a look at Peak's efforts. Reporter: Pick listed, the first is to give 13,085,000 shares to more than 400 employees, this approach to the employees into shareholders, a change to Pick's family business image. How to deal with the conflict between the family business and modern enterprise management? Xu Jingnan: First of all, the current equity incentive involves only above the grass-roots level, it is impossible to promote the full force, the company hopes to motivate these key players can better contribute to the wisdom of business development. After the listing, our management orientation is "capitalization of the family, management of the market." In addition to the family members hold the shares, the management of the open. The question I'm thinking right now is how the management goals of the business, the size of the business match each stage of development, how the performance system of the business matches the organizational structure and business development - that is, what kind of team structure is best suited Corporate structure? In the past, the internal model of Peak was hilltop. Employees in department A went to department B to find the supervisor of B. The cost of communication was too high. Now we are advocating for the establishment of project teams that are able to directly link departments that are "fragmented" and "separated from each other."