Xtep: sporting goods industry need price war to promote integration

Ding Bo, president of Xtep International [5.200.00%] (01368.HK), said that while the profit margin of sportswear retailing industry has been declining in recent years, Xtebuco's performance is still steadily increasing. In 2009, it opened more than 1,000 newly opened stores. Xtep vice president Ye Qi said that the sporting goods industry needs a price war to promote industry consolidation, the price war fierce as possible. In the sporting goods industry, it is a common practice not to discount new listings, but with the intense competition this convention has been broken. Peak Wei Shanghai Lin Wei Yue, general manager of brand management center, said: "In some second and third tier cities such as Anhui, the price of new products more firm, can do not discount, but not in Shanghai such a discount not work. 20% discount is more common, sports brands at home and abroad have this phenomenon, others are at a discount, you have no choice. New listing discount phenomenon is particularly evident in first-tier cities such as Shanghai, because many brands, highly competitive. Nike, Adidas this international Brand in Shanghai are three fold from the sale, more than 100 bucks to buy a pair of Nike shoes is not impossible. The intense competition in the sporting goods market is evident from the rapid expansion of the sporting goods retail industry. Analysts, Anta dealer Ma Gang introduction, in recent years, the sporting goods retail industry into a fierce separatist, Zhu Qiang disputes "Warring States Period." Which Belle International [8.940.56%] (01880.HK) under the Tao Sports Bo in the country has nearly 3,000 sporting goods retail stores; Taiwan Shoes Bao-Yuan Group's Bao Sheng International [1.452.84%] also in the country There are more than 3,000 direct sales stores and thousands of affiliated stores; to Sichuan and Chongqing as the base of the strong wave of sports, opened in the southwest more than 1,700 stores (including joining channels); Zhejiang-based sports of Ruili in East China and There are more than 1,000 retail outlets in Central China for sports goods. Retailers like Jinlang and Ruili have more than a dozen of them nationwide. The Hong Kong-funded 100 sports have opened more than 60 major sports cities in 16 cities in China. . Ma Gang think the sporting goods retail market is no longer the Blue Ocean, but the Red Sea. In late 2008, Taiwan's second largest sports shoes company Winterthur Group formally withdraw its 85% stake in mainland sporting goods retailer Cross-World Sports, a total withdrawal from the mainland sporting goods retail market. Pou Sheng International 2009 earnings report also shows that in 2009 the performance of the basic breakeven. Industry sources, the sporting goods retail industry profit margins are getting lower, and some as low as 10%. Ding Bo said: "In fact, the net profit rate of 10% is already good, Belle and other international brands net profit margin of only about 5%, net profit margin of 10% to 15% of the level is relatively high." Ye Qi said: Foreign sports retailers, the lowest profit margin of only 3% to 4%. Ye Qi believes that the price war is not a bad thing: "It is now quite clear that a well-done brand is still good and a bad brand is doing well. It is impossible for an industry to have dozens of brands forever. A little further strength, it is best to fight back to the prototype, the unqualified eliminated as soon as possible.