On June 26, 2019, in the innovative and enterprising city of Xiamen, Haixi, Hongxing Erke, a well-known Chinese sportswear brand, held a unique product release show and officially announced its entry into the children's apparel market. Industry dealers and media friends from all over the country have witnessed the declaration issued by ERKE KIDS to the market: "Play for real!"
Hongxing Erke named its children's clothing brand as "ERKE KIDS". According to Erke Children's plan, it plans to open 100 high-quality physical stores in major central cities on the second and third tiers of the country by the end of the year.
Hongxing Erke Industrial Co., Ltd. was founded in June 2000 and is headquartered in Xiamen. As a leader among domestic brands, it once sat on an equal footing with Anta, but now Hongxing Erke gradually fades out of people's sight. In these years, what kind of development history has Hongxing Erke experienced? Can the children's industry it now launch be a strong business line?
According to public data, the total population of China in 2018 has approached the 1.4 billion mark, of which the number of children aged 0-16 has increased year by year to 380 million. Compared with the sharp increase in market demand, the development of China's children's clothing can be described as a late start, so it has a great advantage for many companies that have entered or are about to enter the children's clothing market. Around 2010 is an explosive period for children's clothing brands, especially many adult clothing brands have extended to the field of children's clothing. Now ten years have passed. As the children's clothing market is gradually saturated, many companies still join in. Hongxing Erke is one of them.
Criticized for imitation
As foreign brands entered China, many domestic brands began to imitate one after another, but brands such as Anta and Li Ning gradually moved from imitation to transcendence in the later period and gained their own brand style. Products are the core competitiveness of a brand. We must not only maintain strict quality control, but also maintain our own brand style in product design. Facts also show that after years of troughs, Li Ning relied on the rise of the "national tide" and the unique Chinese style design, which allowed "China Li Ning" to gradually go international, while also revitalizing this chess game at home.
Hongxing Erke does not seem to have pinpointed his position in design and style in the past two years. Whether it is Jordan or Adi, Hongxing Erke has more or less similarities with them. Although many domestic brands have the problem of plagiarism, if a company or brand wants to go far, it must still have its own design style, just like Anta and Li Ning. When they are better in design, they have stronger strength.
Focus on overseas markets
China has a large population, rapid economic development, and increased purchasing power per capita, so China is a very broad market. Many foreign luxury brands have come to China to "nuggets" one after another, but as a home-grown domestic sports brand Hongxing Erke has shifted the focus of the market overseas, the majority of specialty stores are abroad, and it is rare in China. Hongxing Erke began to lay out overseas markets around 2005. Through long-term active promotion in tennis and reaching good cooperation with many national Olympic committees, Hongxing Erke's overseas reputation has become increasingly high. In 2012, compared with the domestic market, Hongxingerke's overseas business has grown against the trend, especially in Southeast Asia. Data show that the total amount of its overseas market accounts for 10% of the entire group's sales. Relevant persons pointed out that, as far as domestic domestic brands are concerned, there are only a handful of such "internal and external ratios". But at the same time, Hongxing Erke also lost a vast domestic market.
In contrast, many domestic brands are different, such as Anta, where there are many domestic specialty stores. In the early stage of enterprise development, it has always been based on the domestic market, and later launched a "buy, buy and buy" model, acquiring a large number of overseas brands and improving the brand matrix.
Self-built production base and logistics center
Most domestic apparel companies adopt the "asset-light operation" model, which means that the company has mastered brand building and operation, and the processing and production links are contracted to garment processing factories. But Hongxing Erke is different. It currently has six production bases in Fujian and Sichuan . In 2018, Hongxing Erke invested about 500 million yuan in shoe and clothing production line projects, with the goal of building Hongxing Erke's largest domestic production base. Is the domestic sportswear brand products self-sufficiency rate leading enterprise. Some enterprises are very necessary for asset-heavy operations, such as dairy companies, owning their own ranches, production workshops ... not only can ensure product quality, but also an important condition for consumer trust. However, for a clothing company, there are advantages and disadvantages. It requires a lot of manpower and material resources, but it has a guarantee for the quality and efficiency of the product. At the same time, Hongxing Erke established the first intelligent logistics center in the industry to use the "interconnected, intelligent, green" design concept.
Conjecture about marching into children's clothing
It is reported that the children's industry was first tested online, and its official flagship store, Hongxing Erke, has launched children's clothing and children's shoes and other products. From the flagship store: Hongxing Erke only launched a few children's products, and most of the children's shoes.
According to Cheng Weixiong, a textile and clothing brand management expert and general manager of Shanghai Liangqi Brand Management Co., Ltd., "The purpose of Hongxing Erke's launch of children's clothing is to further diversify its category. The same is true of the Fujian sports group, which is represented by Anta. Forced by helplessness, but there is not much difference in its launched children's product line, the focus on sports and life series is still Zhongtong and Big Kids, and the sports brand and leisure mass brands are in the middle and big children market layout. Too much, the current competitive landscape is fierce, and Hongxing Erke has no advantage in rushing to participate; it is a good idea to try to become a point of performance growth, but in the short term, more than 2-3 years is only an investment, and how much output depends on market user response how is it."
For Hongxing Erke now launching children's clothing, the market voice has been mixed. It's more about whether the timing is right, but no matter what the timing, it's never too late to start now.