In the thirty year history of the rise and fall of Jinjiang series shoe and clothing brands, how many companies have risen, and how many companies have lost speed in competition, falling from their former position as the king of Jinjiang shoes and becoming ordinary or relying on emotions to "survive"?
Peak Sport Products is also a brand that is gradually declining in this torrent of competition.
In 1997, Peak's valuation reached 200 million yuan, becoming the king of shoes in Jinjiang at that time. But now Peak's market position has declined to the second or even third tier, and it has not yet reached its revenue target of 10 billion yuan. After the privatization of the Hong Kong stock market, the plan to return to the A-share market has also been far away.
Can such a Peak return to the "first tier"?
The "Dual" Forgetting of Capital and Market
When it comes to Peak, what is still fresh in my memory is its slogan that is popular on the streets and alleys.
I can, infinite possibilities "" Everyone has another me in their hearts "" Low tide, it doesn't matter, it's me preparing for the peak "" Failure, it doesn't matter, it's the reason for my success "
Yes, Peak was once such an inspirational brand. In 1991, he took the lead in cooperating with the "August 1st Men's Basketball Team" and was the first to sign "God of War" Liu Yudong as the brand spokesperson; Afterwards, NBA stars continued to "marry" and become top domestic sports brands. In 1997, Peak's valuation reached nearly 200 million yuan and became the king of shoes in Jinjiang at that time, and it landed on the Hong Kong Stock Exchange in 2009.
However, now Peak is quietly being forgotten by the market.
In the consumer market, the voice of PEAK is decreasing. Since its privatization and delisting in 2016, Peak has not publicly disclosed complete financial data, but it can be seen from the disappearance of Peak specialty stores on the street.
According to publicly available data from PEAK, in 2012, PEAK closed an average of 4 offline stores per day. In 2011, PEAK's opening rate of 8.1% was significantly slower than the 16% in 2010, with a total of 1323 stores closed in 2012. Until now, it is difficult to find PEAK direct franchise stores in first and second tier cities, especially in second and third tier cities.
According to the latest release of the "2021 Top 15 Domestic Sports Shoe Brands Ranking" by the iMedia Gold List, Anta, Tebu, and Li Ning ranked in the top three, while Peak ranked only fifth with a comprehensive score of 80.8.
On the sales of Taobao and JD e-commerce platforms, the number of fans of PEAK Tmall's official flagship store reached 7.03 million, and the sales of the best-selling Winter sports running shoes reached only 9000+. Anta, Li Ning, and Tebu all have over ten million fans, and all three major brands have crossed the revenue threshold of the "ten billion club".
In the Secondary market, PEAK's move to return to the A-share secondary listing was also silent.
Due to unsatisfactory performance, the stock price has been consistently low since its listing, which has affected its performance. In 2016, Peak completed privatization and delisting from the Hong Kong stock market. In February 2017, there was news that Peak would return to the A-share market, and a "Return to A-share Development Forum" was also held.
In 2021, it was rumored that Peak would conduct an IPO on the A-share market in 2022, and completed a strategic financing of $300 million in September of the same year, led by China Resources International Research Xiamen Consumer Fund and jointly invested by China Construction Trust. The popularity of PEAK's listing reached its peak, with many media reporting that "PEAK will return to the A-share market and usher in a re valuation of its value." "PEAK will catch up with Anta Li Ning
Now that 2022 has entered the end of the year and six years have passed since privatization and delisting, Peak seems to be still standing still, and the plan to return to the A-share market has been lagging behind.
2 wants to be remembered again
Although Peak has been forgotten by the market, it is striving to transform, hoping to be remembered by consumers and return to the first tier.
Firstly, it is strategic innovation. After privatization, Peak attempted to expand its segmented market through a multi brand strategy, gradually upgrading from a single sports equipment brand to a sports industry group, becoming a sports technology enterprise.
At the end of 2018, PEAK launched a new high-tech adaptive midsole - PEAK's "state pole". The new products of the Tenji technology series, which are full of technology and lightweight and comfortable to wear, have gained great popularity among consumers. According to data released by PEAK, as of now, the cumulative sales of Tenji technology series products have exceeded 20 million pairs, contributing over 4 billion yuan in sales figures.
The unexpected success of PEAK has also led it to choose a new development path as a "sports technology brand", and its product line is constantly moving towards the mid to high end market. At the PEAK 125 Future Movement Science and Technology Conference the year before last, President Xu Zhihua announced that "PEAK's brand positioning was updated to be a sports technology company, and the two keys for PEAK to win in the future were Poseidon Technology and 3D printing."
At present, PEAK has established five innovative research and development centers worldwide, and has developed a series of independent innovative technology new products, including Light Bomb Technology, Biobased · Pengpai Technology, and Explosive Pengpai Technology, in addition to the State Extreme Intelligent Adaptive Technology series. At the same time, PEAK also holds the "12.5 Future Technology Conference" every year. At last year's technology conference, PEAK brought two new processes: "Biobased · surging" and "exploding".
Secondly, in terms of marketing, PEAK is working harder to get closer to the young people market, inviting popular star Wu Lei to endorse it. At the same time, CEO Xu Zhihua personally went on a live stream to bring more popularity to the brand.
In 2020, Xu Zhihua officially settled in Tiktok, and then carried out live delivery on Tmall platform. According to Tmall data, Xu Zhihua sold the brand new State Extreme 2.0 with a tag price of 569 yuan for 5000 pairs in just 27 minutes during his first live show on Tmall, with sales exceeding 5 million yuan in one hour of live streaming.
Now on platforms such as Tiktok Tmall, Xu Zhihua has been affectionately called "Brother Hua" by users and fans. In August 2022, Peak also held a 2022 Peak Fan Festival called "Hua Ge and His Friends".
As we all know, the president of the sports brand took the goods on the live broadcast in person, which is not a new thing. Both ERKE Wu Rongzhao and Tebu Ding Shuibo took the goods on the live broadcast, but Xu Zhihua is the most diligent president in the circle. According to Mantis Observation, Xu Zhihua has released 111 short video works of Tiktok since he settled in Tiktok.
Not only the effect brought by the CEO's live streaming and sales, but also the fan effect brought by celebrities. In September 2021, Peak signed the first domestic celebrity spokesperson, Wu Lei. Xu Zhihua said, "Working hand in hand with Mr. Wu Lei, who has both sports genes and can lead the trend, will help to deliver PEAK's new product concept of" technology+fashion "to more young consumers."
Finally, in terms of channels, Peak is actively embracing e-commerce and vigorously developing offline channels to tap into the potential of the first and second tier markets and move towards the mid to high end.
Since 2018, Xu Zhihua has embarked on deep internal reforms at PEAK, one of which is to fully embrace e-commerce. Subsequently, the sales of the State Extreme series products boosted the continuous growth of Peak's online channel revenue. In 2019, Peak's online sales growth more than tripled. Recently, Peak has also signed a contract with Shadow Knife RPA to optimize its inefficient processes, improve the efficiency of e-commerce customer service and operations, and bring customers a better shopping experience.
As for offline channels, Xu Zhihua said, "vigorously develop offline channels, which is the core link of the opportunities they have missed several times before. The focus is to strengthen the management ability of direct retail and improve the distribution system." For example, for young consumers in tier one and tier two cities, PEAK has launched PEAK stores with a stronger sense of technology and trendy flu, and also opened special stores in tier three and four cities. The plan is to open 500 to 800 state stores in first and second tier cities, and to open "Peak Comprehensive Store" in third and fourth tier cities, with a goal of around 5000 stores.
It can be seen that the entire company is undergoing changes around technology, moving from branding, marketing, product research and development to a more internet and cutting-edge development path. Can Peak regain its lost market position and sales volume just by striving for transformation?
But lost to the "Times"?
Opportunity is for those who are prepared, and at the same time, the flow of light can easily throw people away, turning cherries red and plantains green.
After privatization and delisting, Peak did indeed launch a series of transformation actions to restore its declining position and sales. However, Time has never waited for slow movers. In the era of consumer upgrading and e-commerce, Peak, which underwent slow e-commerce transformation and brand upgrading, has gradually been forgotten by the market and has become the "former King of Jinjiang Shoes".
Upon closer inspection, on the one hand, Peak's e-commerce transformation is relatively slow, and at the same time, live streaming has not stepped on the hot topic of "going out of the loop".
As mentioned earlier, Peak only began actively embracing e-commerce in 2018, but as we all know, 2012 is the window period for the development of e-commerce. In recent years, during the period of live broadcast e-commerce outlets, PEAK really worked hard to carry goods for live broadcast, but it was not as lucky to be favored by consumers as ERKE.
In 2021, ERKE "went out of the circle" due to donation, which triggered "wild consumption" of consumers in its live broadcast room. Later, it frequently went out of the circle by virtue of "donation" series of actions. However, compared with such a hot spot that is extremely easy to disappear, the public welfare brand image and good products that ERKE has been practicing behind are the reasons why it can be recognized by the public.
Moreover, ERKE has strong overseas competitiveness. In 2005, Hongxing Erke was listed in Singapore, becoming the first Chinese sports brand to be listed overseas. According to the data on its official website, ERKE currently has more than 7000 stores around the world, and its products are sold in Europe, Southeast Asia, the Middle East and other countries and regions. Its product channels reach more than 40 countries at home and abroad, and it has successfully captured trademark exclusive rights in more than 100 countries.
In fact, PEAK's competitiveness in overseas markets is also increasing, but only one hot event is out of the market. The company has disclosed data that in recent years, Peak's overseas sales revenue has accounted for over 20% of total sales. In August of this year, Saudi Arabia firmly ranked first in overseas sales of PEAK. But nowadays, consumers prefer recommended or even impulsive consumption. The strength of PEAK's overseas market needs to be seen by the market, and the brand needs to be seen by the market first.
On the other hand, the most fatal point is the imbalance in the formulation of channel expansion strategies.
Xu Zhihua stated in an interview with the media that, From the perspective of PEAK, our weakness lies in the channels. At the beginning of entrepreneurship, it was a channel for department stores, then it entered the wholesale market, then it entered the channel for specialty stores, and then it entered a stage of synchronized online and offline channels. These four channel changes, each of which is a rebirth and a painful process for us
According to the meaning of this passage, every time there is a change in the channel, PEAK has made corresponding countermeasures, but it has repeatedly failed and fought, and the final outcome is not satisfactory, but the essence is that PEAK has repeatedly failed.
Around 2012, the industry experienced overcapacity and players entered a period of adjustment. During this period, including PEAK, the performance of Li Ning, Tebu, ERKE and other companies declined significantly. But there are those who are the first to sort out their own retail channels and step out of the industry adjustment period.
Anta is one of them. It controlled 80% of its offline stores through self operation or equity investment before 2012, and its absolute control allowed Anta to control production and sales quickly out of the industry adjustment period. On the contrary, Peak and other brands are struggling with the surge in operating costs caused by excessive reliance on the dealer system or disorderly expansion of their stores in the early stages, resulting in a crisis of cash flow being overwhelmed during periods of overcapacity.
Looking back at major Jinjiang shoe and clothing brands such as Seven Wolves, Nine Shepherds King, 361 °, and Guirenniao, too many brands have missed the perfect development period due to slow online transformation or disorderly expansion, resulting in a sharp decline in subsequent development.
However, in the vast stream of light, there will still be companies that can rise again. Whether Anta, the world's second largest sports brand, counterattacked, or ERKE, the newly rising sports brand, or even the special step to reach the threshold of 10 billion revenue last year, are all examples for PEAK and other sports brands to refer to.
However, for Peak now, it is still in a "little brother" stage of starting anew, relying on actual performance to exchange for a listing opportunity. Xu Zhihua once said, "Currently, we are 'little brothers'. Before going public, we still need to cultivate our internal skills and lay a solid foundation for our work
Although the launch date is uncertain today, driven by active transformation and new product technology innovation, Peak may also encounter its own "hot spot" and be recalled by capital and the market.