On the occasion of the new year, Li Ning company caught in a turmoil. Due to the decline in order volume in the second quarter of this year, Guan shop rumors everywhere. In this regard, Li Ning had to come forward to clarify: not closed shop, but integrated sales channels. It seems that Li Ning, the decline in performance attributed to the issue of distribution channels, at this time, a distributor in Maoming, Guangdong broke the news to reporters, there is a local dealer directly over the distributors shop, making the distributor business unsustainable. The distributor did not know that in the many means of integration Li Ning, dealers are encouraged to encourage direct marketing is one of the strategies. The next year, Li Ning, distributors and distributors, ultimately, the survival of the fittest. Distributor: suffered "unfair" treatment "Things have not yet been resolved, we have to reflect the company departments at all levels, but they are still in the shop." Maoming City, Guangdong Province, there are six Li Ning store manager David Sports recently complained to reporters. Mr. Xu said that his superior dealer " Guangzhou speeding" over them directly in Maoming shop. According to Li Ning's distribution network, Li Ning headquartered under the East China, South China and other subsidiaries, each of the following major distributors, each dealer offline there are many direct market distributors. Hong great sports is one of the distributors, from the super dealer speeding company to take goods, speeding company from Li Ning Beijing Sporting Goods Corporation direct purchase, earn the difference. Second and third tier cities like Maoming have been an important market for Li Ning. On the two or three hundred meters long section of Maoming South Renmin Road, there are three Li Ning stores, of which one is the speeding company on September 5, 2010 Newly opened shop. Mr. Xu Xu Hongda dissatisfaction is that speeding companies as wholesalers, because of cost advantages, to seize the great market. "As a distributor at the next level, we are going to get goods from speeding and they earn 7% to 8% for each item. When they open a shop, they advertise that they are direct selling, cheaper than the goods in our shop." To make him feel unfair is that Li Ning companies have quarterly sales of specials to speeding price is 15% of the list price, but the speeding to their price is the list price of 45% to 50%. Mr. Xu said that since the speeding shop opened, their annual turnover has been reduced by about 20%. In this case, Hongda still in accordance with the provisions of the annual increase rate of 23% of the order, "according to the listing price, in 2008 our order volume is 10.83 million yuan in 2009 was 12.1 million yuan in 2010 Is 13.97 million yuan. " Mr. Xu said that under such a system, the declining sales volume and the increasing number of orders each year put a lot of pressure on them. "The goods that can not be sold can only be piled in warehouses and sold at special prices." He reflected the matter to all departments of Li Ning, but did not get a reply. Li Ning: Integration of distributors, to encourage direct marketing Mr. Xu Hongda Sports do not know, Li Ning is planning to integrate sales channels, one of the measures is to encourage dealers to set up direct sales shops. Reporters access Li Ning 2010 interim results found that as of June 30 last year, Li Ning has 129 dealers and more than 2000 distributors. The Company believes that at present most of the distributors have weak management capabilities in retail management, purchasing power of products and management of product life cycle, resulting in unsatisfactory store efficiency and operating profit margin. In addition, these distributors lack the scale effect. "Most distributors are now relatively small in scale. They operate two shops on average, of which over 1,700 distributors operate only one shop," said Li Ning's official in charge of both the distributors and distributors Faced with the pressure of rapid cost increases, Li Ning company must increase the integration of inefficient distributors, so that larger distributors or distributors who want further development of inefficient distributors to buy shops. At the same time, Li Ning also encourages large dealers to increase the number of direct sales outlets. Li Ning repeatedly stressed to the outside world that they are "integrated channels" rather than "closed 500 to 600 stores." However, this inevitably leads to the survival of the fittest of the distributor. Behind the "closed shop": slowing performance growth The storm of consolidation channels stemmed from the gradual slowdown in performance growth. Li Ning announced earlier that the average price of apparel and footwear products rose more than 8% YoY in the second quarter of 2011 at the Li Ning brand product ordering fair. However, the orders decreased by more than 7% and 8% respectively over the same period last year, The total order bookings this order will drop about 6%. In recent years, the growth of the domestic sportswear market slowed down. The 2008 Olympic Games held is an important watershed in the domestic sports apparel industry. In that year, Li Ning, Anta, Xtep, China Mobile in the first half revenue or turnover have achieved a year-on-year increase of more than 50%, when the revenue of Xtep soared 174.3% year on year; to the first half of 2009, the four companies, the turnover The highest year-on-year increase was China's move at 33.5%. In the first half of 2010, Anta's turnover was the highest among the four companies, representing 22.6% of the total. Li Ning from the first half of last year's earnings seems, simply by increasing the number of openings to maintain the expansion seems to be impracticable, the company in the first half of 2010 revenues of 4.004 billion yuan, 4.051 billion yuan in 2009 increased by 11% at the same time, Half-year sales cost of 2.346 billion yuan more than 21.15 billion yuan a year earlier also increased by more than 10%. Integration channels are commonly used means of sports apparel business. It is understood that Nike from the beginning of 2009 on the channel to mobilize "surgery" out of poor performance of the dealers, the sales business to the larger dealers in the hands of. Adidas is more willing to bet on strengthening the marketing and sales channels of its own. Li Ning's share price is not satisfactory. Compared with the highest price of HK $ 31.95 in April last year, the market continued to plummet to HK $ 16.22 since the integration storm broke out in late December last year. 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Behind the storm Li Ning integration: channel business "duel"