fashion elite interviews | skechers china general manager chen xiaozhe: sichuan has always been a market where the brand hopes to increase investment
2024-09-04
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cover news reporter li xuedan
according to the financial report released by comfort technology company skechers, in the first half of 2024, skechers' global sales increased by 9.8% year-on-year to us$4.4 billion, and the chinese market increased by 8.2%. in 2007, luen thai group, the parent company of skechers china, established a joint venture with skechers usa to jointly develop the chinese business. over the past 16 years, the brand has maintained steady growth and continuously expanded its retail channels. so far, there are more than 3,500 offline stores in china, and this number is still increasing.
skechers' steady growth in the chinese market is closely related to its rich layout of comfortable technology products and the continuous improvement of consumer experience. in the second quarter, skechers' slip-ins flash technology series products received positive feedback from the market, and professional sports products in outdoor, yoga, football, basketball, pickleball and other scenarios also showed great potential. in july this year, the largest brand flagship store in asia pacific was unveiled in chunxi road, chengdu. skechers will continue to upgrade its store image in china, actively strengthen consumer communication, and create a comfortable and interesting shopping space for more chinese families.
what is the future market strategy for the sinking market that the brand has always paid attention to? why did the largest brand flagship store in asia pacific choose chengdu? recently, a reporter from cover news interviewed chen xiaozhe, general manager of skechers china and senior vice president of sales operations, at skechers' shanghai office. he shared the brand's strategy and development plan in the chinese market.
chen xiaozhe, general manager of skechers china
scale has always been the strongest advantage and great charm of the chinese market.
"in the past two years, skechers has continued to rapidly expand the market in terms of channels. last year, it opened about 700 new stores. this year, it is expected to open about 500 stores, and vigorously expand the sinking market. looking at the entire sports brand track market, the top local brands are better than international brands in channel expansion and operation. as an international sports brand, skechers is committed to doing a better job in brand and store operations, especially in the sinking market." chen xiaozhe said that based on the changes in consumer shopping habits in the past two years, skechers has also made cautious adjustments from channel strategy to store opening strategy. "skechers does not win by quantity when opening stores, but by opening some influential stores and paying more attention to quality. this year, skechers has upgraded many channels, stores and store images to provide consumers with a good experience. the so-called caution is the brand's judgment on the market or project, but caution does not mean that it will lie flat and not open stores."
new skechers asia pacific flagship store opens in chengdu
recently, the comfort technology company skechers chengdu chunxi road flagship store opened. the store is the largest brand flagship store of skechers in asia pacific. this move marks another step forward in skechers' strategic upgrade in china. this time, skechers incorporated sichuan cultural elements into the flagship store to create an offline leisure shopping space with a fusion of multiple scenes. it not only displays all categories and the latest products, but also brings together new digital services and brand activity experiences to provide consumers with a better terminal experience and play the role of the flagship store as a brand name card. why choose chengdu? chen xiaozhe said: "sichuan has always been a market where skechers hopes to increase investment. chengdu is a very young and vibrant city. skechers' brand influence in cities such as beijing, shanghai, guangzhou and shenzhen is relatively mature, so skechers' brand strategy will be more inclined to the second-tier cities in the future, such as xi'an, chengdu, changsha, wuhan, hangzhou, shenyang, etc. the chunxi road business district has a good influence in chengdu, sichuan, and even the entire southwest region. skechers seized the opportunity to open a store in chunxi road and plans to make the store a brand benchmark here."
the sinking market is no longer a blue ocean but a red ocean. skechers adopts a strategy of all-round investment and input.
chen xiaozhe defines the brand's future growth strategy as three core directions. first, it will focus on occupying the blank spots in the sinking market and expanding its market share. second, it plans to upgrade existing stores and open image stores and flagship stores in first-tier cities such as chengdu to enhance the brand image and increase sales. third, it will expand new product categories and try to launch more high-end and functional products to explore new opportunities in the fields of casual fashion and high-end professional sports.
from 2019 to now, skechers has opened hundreds of stores in the sinking market and explored a successful model. "there are more than 330 prefecture-level cities and more than 2,000 county-level cities in china. the sinking market is a relatively blank market for skechers, and it is also a huge opportunity. skechers will work with strategic partners to explore it. before opening a store, skechers will analyze the size of the city, the state of the business environment such as gdp and population size, and will also understand the status of local leading brands and competing products. when brands enter the sinking market, such as fifth- and sixth-tier cities, the product and pricing system must also be matched and balanced. based on detailed market analysis, we know which products should be launched, what kind of stores to open, how to increase store sales, how to manage our customer members, etc."
regarding the size and saturation time of the sinking market, the outside world generally believes that the sinking market has huge potential. in this regard, chen xiaozhe also expressed his own views: "i think the sinking market is no longer a blue ocean but a red ocean, and the competition is very fierce. the reason why we want to try is that we have not yet penetrated into the red ocean. although the market space may be very limited, there are still opportunities for us. skechers has gradually explored the sinking market since 2019, and it has been 5 years. we believe that with the brand positioning in the minds of consumers, that is, as a national brand, we still have opportunities."
"faced with fierce competition in the lower-tier cities, we are also studying our product lines to ensure that the products in the lower-tier cities are different from those in first-tier cities such as beijing, shanghai and guangzhou, especially in terms of price. i believe that although price is an important factor in competition, it is only part of it. the product itself and brand image are equally important. therefore, we have adopted a strategy of all-round investment and input, hoping to provide more value to consumers in the lower-tier cities and make them feel that skechers products are worth buying."
continue to focus on outlet channels and explore more ways to connect
in the past two years, many fashion brands have attached more and more importance to the outlet channel. for skechers, outlet is undoubtedly its core sales channel. this year, the brand has also made many upgrades in the outlet channel, including store image and products. chen xiaozhe said: "in recent years, the outlet channel has maintained rapid growth and good momentum. this is also related to consumer behavior. skechers always follows consumers, takes consumers as the center, and meets consumer needs. for skechers, outlet is not a place to clean up tail goods, but also a benchmark for brand image, providing consumers with a good experience and serving consumers. in the second half of the year, we will continue to make efforts in the outlet channel. skechers has a strategic partnership with several large chain outlets, such as wangfujing, bailian, shanshan, etc. we plan to hold more pop-up events in these commercial entities and explore more ways of linkage."
in recent years, skechers has adjusted its business model in the chinese market, transforming the previous "wholesale model" into a "joint venture model", whereby distributors are responsible for store development in the region, while skechers manages distributors' prices, inventory, brands, and other aspects. this strategy has helped the brand to smoothly navigate through periods of market volatility, and will also help skechers expand into lower-tier markets more flexibly.
