Attention: How Are Leather Shoes Manufacturers Doing

Whether the leather shoes fit or not is known only to the wearer, but it is clear to all at a glance how the leather shoes manufacturers are doing.

Wenzhou has always been famous for its leather shoes industry. Aokang, red dragonfly, Kangnai, Yierkang and other famous brands are all from Wenzhou. But now the leather shoes market has reached the turning point and entered the "bottleneck period" of development, and many listed shoe enterprises performed poorly.

However, even in the background of the withdrawal and bankruptcy of the old shoe company Fuguiniao and the poor performance of Daphne, Aokang still achieved double growth of revenue and profit in the first quarter of this year. How did it achieve this? Driven by the "new national trend" in the field of consumption, can this old brand shoe enterprise turn red again?

01   5000 pairs of leather shoes

"National shoe enterprise" Aokang

The birth of Aokang has something to do with the savage growth of Wenzhou leather shoes industry.

In the 1980s, with the promotion of reform and opening up, shoes produced in Wenzhou were popular all over the country due to their new style and low price. Some practitioners once said that at that time, it was really "you can make money by lying down". The dealers had to rely on snatching to get the goods. Even two shoes of different sizes were even wanted.

At that time, there were more than 6000 shoe enterprises in Wenzhou. However, due to the lawlessness of some manufacturers and their attempts to pursue exorbitant profits, the good and the bad of Wenzhou shoes were mixed, and the problems of shoes being damaged on the same day after they were sold frequently occurred. Consumers called them "morning and evening shoes" and "one day shoes" to express their dissatisfaction.

This dissatisfaction peaked on August 8, 1987. More than 5000 pairs of shoddy shoes made in Wenzhou were burned by a fire in Wulin Square in Hangzhou, and the reputation of Wenzhou shoes fell to the bottom.

This fire has stung some Wenzhou People's nerves and aroused their will to rebuild their credit. Wang Zhentao, founder of Aokang, is one of them.

In 1988, Wang Zhentao, who had done leather shoes promotion, founded Yongjia Aolin shoe factory, the predecessor of Aokang. Wang Zhentao believes that what we are resisting is not shoes made in Wenzhou, but shoes with quality problems.

In order to avoid repeating the same mistakes, Wang Zhentao began to pay close attention to the quality of products from the aspect of raw materials, strictly controlled every link in the production process, and made a slogan of "leather shoes" and marked the word "made in Wenzhou" on the packaging. This kind of imperceptible propaganda, with the opening of its market, gradually works, to a large extent, makes consumers change their outlook on Wenzhou shoes.

In February 1998, Aokang was awarded the title of "China's top ten real leather shoes king". However, accompanied by honor, there are a large number of shoddy leather shoes in the name of Aokang. A little carelessness in dealing with it damaged the famous brand image of Aokang at that time.

Wang Zhentao has a good response to this. Even now, his approach is a quite successful case of brand crisis public relations.

In 1999, it happened that the famous and excellent shoes Fair of Wenzhou, China's shoe capital, was held in Hangzhou. Wang Zhentao personally ignited the fire and burned the counterfeit Aokang shoes and Wenzhou shoes collected from the whole country.

This "fire of snow shame" not only corrects the name of Wenzhou shoes, which was in a deep depression 12 years ago, but also makes Aokang shoes popular all over the country.

In 2002, the output of Aokang leather shoes reached 8 million pairs, the annual output value exceeded 1 billion yuan, and the profits and taxes reached 180 million yuan. According to the comprehensive evaluation of six economic indicators of China Leather Industry Association at that time, Aokang ranked second in the same industry in China and the first in Zhejiang Province.

Since then, Aokang's revenue has increased year by year, which has helped Aokang to successfully list a shares in 2012.

The development of Aokang is hard to copy. It is difficult to copy the conditions and opportunities of reform and opening up, strong consumer demand and all aspects. It can be said that Aokang has taken every step before.

But no one thought that ringing the bell was the highlight of Aokang.

In the same year, after the revenue of 3.455 billion yuan and the net revenue of 513 million yuan, its performance showed a downward trend year by year. In 2019 and 2020, Aokang's non net deduction will be negative.

What causes the fatigue of this national brand?

02   With skerge and puma agent in hand

Aokang still can't make a living

Since China joined WTO in 2001, some famous leather shoes brands in the world began to pay attention to the domestic market. Influenced by the domestic cheap labor force at that time, many international brands moved their manufacturing and sales focus to China. Their fashionable design and brand premium stirred up the domestic leather shoes market like catfish.

At that time, China's leather shoes industry had a high degree of dispersion, and the phenomenon of low price competition was serious. Moreover, the product grade and price were lower than the average level of the world shoe industry, so it was unable to compete with foreign brands.

What's more fatal is that after 2010, the behavior of buying leather shoes to "fill the facade" has gradually decreased. Young people do not like to wear shoes in the past. Instead, they buy sports and leisure shoes of international brands such as Adidas and Nike. Comfort and scene applicability have also become important reasons for consumers to choose shoes.

Moreover, in the low-end market, Aokang and other old shoe manufacturers have also encountered the snipe of Anta, Tebu, Li Ning, and other local brands.

Under the superposition of these factors, even Aokang, which ranks first in the comprehensive strength of the industry, has to face the dilemma of slowing down its performance growth.

However, based on its past performance, we can find that in 2015, Aokang's revenue and net worth had a significant boost. This is a decisive transformation after Aokang captured the change of consumption trend at that time.

Before that, Aokang's main footwear business was men's business shoes. Until 2015, after Aokang won the distribution rights of American sports brand skykey in some provinces and cities in China, it began to prefer to produce and sell leisure fashion and sports products. In 2017, Aokang obtained part of the agency right of puma, a sports brand under INTERSPORT.

According to the financial report of Aokang international in 2020, the operation strategy of Aokang in the two agency brands of skykey and puma is roughly the same, with both online and offline sales channels, including direct marketing and distribution.

However, the data show that scacci is better than puma.

According to the analysis of pinecone finance and economics, the main reason is that there are more female consumers in skykey. In 2020, skykey's revenue growth indirectly promoted the sales of Aokang International Women's shoes by 8.11 percentage points. According to the financial report data, in 2020, scacci achieved a revenue of 294 million yuan, a year-on-year increase of 22.97%.

But even so, Aokang has not completed its original plan of opening 1000 skykey stores in five years.

As of the end of 2020, the total number of skykey stores was only 157, and the growth rate of skykey's revenue slowed down year by year, with the growth rates of 111.69%, 49.72%, 25.13% and 22.97% respectively from 2017 to 2020.

In addition, although Aokang did not disclose puma's relevant data, by the end of 2020, puma's direct sales and distribution stores totaled only 53, and its performance was not very good.

However, in recent years, Aokang has been on the rise. Especially in the first quarter of this year, Aokang's revenue increased by 92.15% year-on-year, and its net profit increased by 1738.42% year-on-year. How did it achieve this?

03   What is Aokang's broken circle code?

There is no permanent brand bonus in the business world. There is only a struggle between Zhendao and Zhendao in the difficult transformation. In the situation of the decline of many "shoe king", Aokang can rise against the trend is commendable, but also can not do without its many difficult transformation.

According to the observation of pinecone finance and economics, Aokang has made great breakthroughs in at least the following aspects, which will also become the continuation of its future business model.

1、   Product development

Aokang has made great efforts in product research and development in recent years.

Nowadays, the consumption trend is turning to the feminization market, and the medium and high-end women's shoes have the characteristics of short cycle and rapid style change. Aokang has been able to achieve positive growth in women's shoes products in recent years, and its research and development is really stingy.

However, according to the financial report in the first quarter of this year, Aokang invested 9.31 million yuan in R & D, an increase of 12% year-on-year, but only accounted for 1.1% of the total revenue.

If Aokang wants to continue to grasp the aesthetic and demand of consumers, it still needs to appropriately increase research and development costs and constantly bring forth new ideas.

In addition, in terms of sports and leisure shoes, Anta, which has become the leader of domestic sporting goods brands after the acquisition of FILA, has made a precedent. Aokang still has a lot of room for growth in the operation of agency brands such as scacci and puma.

2、   Digital transformation

Nowadays, digital transformation is a must for every enterprise.

Apart from setting up cloud data platform to integrate data of people, goods and fields into the overall operation system, Aokang's most important measure is to establish a "c2m" super factory mode, that is, users directly connect to factory manufacturing.

The surface layer of c2m is that factories directly reach consumers through online or offline channels, but the deep layer is actually to provide normalized large-scale personalized customization services for consumers through data collection, processing analysis and intelligent production technology.

The digital transformation of intelligent manufacturing not only helps Aokang know more about consumers, but also further reduces cost and efficiency, and guarantees quality and quantity.

For example, since its flying weaving workshop was put into production, it has been able to operate 24 hours a day, with 3500-4000 pairs of vamp per day, which is the daily output of 150 workers in the traditional knitting workshop.

In the era of product quality and user experience as the core of the consumer market, digital driven mass customization will be an important direction for the transformation and development of the industry. Aokang's move is quite accurate, but it still needs to continue to maintain the advantage of intelligent manufacturing and strive to seize the market opportunity.

3、   Reshape brand image

The reasons for the crisis of the old listed shoe enterprises are similar, that is, taking the mass line, there is not too much connotation in the product value and quality, which leads to the dislocation between supply and demand, leading to the fault of brand consumers.

However, with the whirlwind of "national tide" in the consumer market, time-honored brands such as baiqueling and bosden have returned to the mainstream consumer market again. Aokang also seized this opportunity to reshape its brand image step by step, breaking the barriers with young consumers.

For example, in 2019, Aokang went into the Palace Museum and released the co branded shoes of "fashion masters" with the theme of "mountain, sea and auspicious beast", which integrated Chinese elements into fashion trend and narrowed the distance between brands and young consumers.

4、   Channel expansion

As a national brand with a history of 33 years, Aokang has been very perfect in the construction of sales channels, but now the operation logic of the whole retail industry has undergone a profound change, from the past people looking for goods to goods looking for people. Aokang needs to adapt to this change.

At present, Aokang is still very adaptable, and has initially formed a localized new retail format of "offline experience store + Mobile App + wechat + intelligent logistics". Last year, Aokang also gradually recovered to the "pre epidemic" sales performance with the help of the new marketing channel of live e-commerce.

In addition, along the belt and road, Aokang brand is also expanding to overseas markets.

According to its first quarter financial report, Aokang's export revenue reached 4.44 million yuan, an increase of 15.78% over the same period. The main source of export was the 25 exclusive stores set up by Aokang in Vietnam.

epilogue

The "Bajie" shoe king, once a household name in memory, is actively docking with young people's consumption ideas, digging out a new incremental market, and constantly strengthening, reshaping and expanding its brand influence.

In the near future, we may be able to see Aokang, which keeps pace with the times, really changes from "national old brand" to "national trend brand", and once again becomes a super brand leading the shoe industry.