On November 30, “Canada Goose Chinese mainland stores are not allowed to return” appeared on Weibo hot search, and its single product price exceeded 10,000 yuan but was pointed out to have quality problems.
Just a few days ago, Canada Goose was just fined 340,000 for false publicity, which was ridiculed as “Canadian duck”. Even if sales growth in the Chinese market does not compensate for the decline in revenue in the global market.
However, the impression of the domestic Bosideng has become the world’s largest brand in down jacket sales and sales volume in 2020.
Canada Goose used to be a market educator in the expensive down jacket industry, cultivating the user mind of consumers to buy high-end down jackets.
But now, with the epidemic, Xinjiang cotton, and various events of the Tokyo Olympics, national self-confidence and sense of identity have been detonated many times, and the public has begun to question that the quality of imported high-end brand products is not better than that of China, and the enthusiasm for domestic brands and national tides has reached an unprecedented height.
Taking advantage of this high national sentiment, Anta’s revenue has surpassed Adi this year, #Beijing Winter Olympics Anta replaced Adi as a clothing partner# also appeared on the hot search, Hongxing Erke live broadcast room also reaped the “wild consumption” dividend.
In the down jacket category, Bosideng has also survived the “darkest moment” of diversification failure, and its stock price has risen by more than 700% in the past five years.
Behind its success is its strategy of high-end pricing and trendy design: at the end of October, the topic “Bosideng 10,000 yuan down jacket” appeared on Weibo hot search, this “climbing” series focuses on “Mount Everest” professional measurement; Previously, the trench coat and down jacket launched by Bosideng and Burberry designers was also promoted on the hot search.
On the affordable down jacket track, the duck and duck brand became a dark horse in August with its innovative snow mountain live broadcast, and even surpassed Bosideng in sales on Douyin Double 11, and Bosideng’s snow fly was not far behind, and opened Kuaishou live broadcast in October.
In the two major battlefields of high-end and affordable down jackets, who will be the ultimate winner?
Canada Goose declines, Bosideng rises
In fact, Canada Goose, founded in Toronto in 1957, was previously just an outdoor down jacket brand called Snow Goose, with annual sales of less than $3 million in 2000.
In 2001, Dani Reiss, the son of the former president, took over the company and made a major decision: “Due to trademark issues, the renamed “Canada Goose” logo will be uniformly used, and the products will only be manufactured in Canada,”
This was seen as a risky decision and received a lot of criticism. Because at that time, many garment companies were moving their factories to Asian countries with lower labor costs. But Dani believes this is the only opportunity to become the only company with a “Made in Canada” label, and binding national brand sentiment will make it more valuable in the hearts of consumers.
In the end, the success of this strategy exceeded all expectations, and Canada Goose experienced the fastest growth in history, jumping to about $200 million in full-year sales by 2014.
Canada Goose grew at a CAGR of 34.4% from fiscal 2016 to 2020, with revenue in Asia growing from $110 million in fiscal 2019 to $230 million in fiscal 2021.
According to Canada Goose’s fiscal 2021 fourth quarter performance report, the direct channel in the Chinese market increased by 101.4%. It can be seen that China has become its most important source of growth.
Source: Market capitalization
According to data provided by the China National Garment Association, from 2017 to 2020, the average growth rate of China’s down jacket market is more than 10%. It is expected that China’s down jacket market will reach 163.6 billion yuan in 2022.
In European and American countries, the penetration rate of down jackets is between 30% and 70%, while the current penetration rate of down jackets in China is only about 10%, and there is still a lot of room for development in the future.
As revenue in Canada continues to decline, Canada Goose’s marketing strategy has shifted from ethnic homemade to Chinese elements in order to attract Chinese consumers.
In January 2021, Canada Goose teamed up with young Chinese designer Angel Chen to launch the 2021 Spring and Autumn Joint Capsule Collection, adding the characteristics of Chinese design.
However, unlike Bosideng’s boom, the epidemic still ended Canada Goose’s rapid growth performance, with revenue of $900 million in fiscal 2021, down 5.7% year-on-year.
In the recent Canada Goose penalty book, thousands of words on the evaluation of down jackets have caused heated discussions, the article pointed out that the key to quality lies in indicators such as the percentage of lint and the number of grams of pile, rather than the specific duck down production area advertised.
On Double 11 this year, Bosideng brand omni-channel turnover reached 2.18 billion yuan, of which online turnover increased by more than 45% year-on-year, and also ranked second in the “Double 11” Tmall clothing brand sales list.
As of September 30, 2021, the financial report shows that Bosideng achieved revenue of 5.39 billion yuan in the half year, a year-on-year increase of 15.6%; Among them, the revenue of Bosideng’s main brand was 3.25 billion yuan, a year-on-year increase of 19.1%. Net profit attributable to shareholders was approximately RMB640 million, a year-on-year increase of 31.4%.
According to the “2021 Top 50 World’s Most Valuable Apparel Brands” released by Brand Finance, one of the five major international brand value evaluation authorities, Bosideng was selected for the first time and is the third fastest growing brand, with an increase of 39%. In this list, only Bosideng and Moncler are the professional down jacket brands.
Prior to the fiscal year 2020, Bosideng announced three consecutive years of steady growth in operating income, and this fiscal year hit a record high, achieving global leadership, with the group’s revenue of 13.5165 billion yuan and the annual net profit up 42.1%.
In the long run, domestic products are the general trend, but the general price of “wild consumption” in the live broadcast room is low, such as bee flower, Hongxing Erke, if you do not establish a brand characteristic image, the short-term mood will be forgotten after the short-term mood recedes, and Li Ning has become a successful transformation trend brand, lasting growth.
The price of domestic down jackets has broken through: high-end trend
In fact, Canada Goose has been a traditional clothing brand focusing on outdoor labor protection for decades, step by step by providing clothing for Hollywood blockbusters and stars, to Putin and other political and business celebrities wearing goods, Jun Ji Hyun, Lee Min Ho wearing it in the snow kissing in the snow of Korean dramas…
Successful marketing has made the product popular after 2018, becoming a status indicator, and also planting the idea of “I also want a goose” in the minds of young and middle-aged consumers.
The north of a few thousand yuan a piece is also its own simple style, and in recent years, it has been co-branded with superme and other trendy brands, and has been worn by many rappers and celebrities, becoming a “contemporary male college uniform”. Previously, North Face also announced a new sales target of $3 billion in 2021.
In 2018, Moncler also decided to abandon traditional seasonal fashion collections in favor of monthly limited-edition designer collaborations to cater to younger, more fickle customers, shifting from pure outdoor down brands to luxury fashion brands.
However, in 2009, Bosideng hoped to get rid of its dependence on a single down jacket business through the “three modernizations” strategy of branding, four-season and internationalization, but the strong expansion caused the company to face a series of problems such as overcapacity, inventory backlog, aging brand image, and declining revenue.
In 2011~2014, Bosideng’s net profit plummeted from 1.451 billion yuan to 138 million yuan, and closed 8708 offline stores in 2013~2017. In 2016, its share price even fell to HK$0.14 at one point.
In 2017, seeing the infinite prosperity of imported high-end down jacket brands, Bosideng refocused on the down jacket business and developed towards expensive and high-end.
In order to establish a high-end brand image, Bosideng has appeared on the runways of major fashion weeks, and at Milan Fashion Week in 2020, Kendall Jenner, the Kardashian supermodel, is walking for Bosideng on the stage, while Nicole Kidman and Anne Hathaway are sitting offstage, wearing “Made in China” Bosideng down jacket.
At the same time, Disney co-branded models were launched, and former LV designers, former design director of Ralph Lauren and Yohji Yamamoto were released in collaboration with students to release designer collaborations, striving to bring themselves closer to the trendy brand.
In China, Bosideng began to sponsor a number of variety shows to ask Yang Mi, Chen Weiting, and Xiao Zhan to endorse, earning enough topics and attention.
Down jackets are often complained of as “Michelin tires” because of their bloat, but after the arrival of trendy stars, Canada Goose and North Face have changed from traditional mediocrity to trend icons. It can be seen that the key to the acceptance of high-priced clothing by consumers is not hardcore quality, but trend identity.
On the Tmall platform, the Bosideng flagship store has 16.98 million fans, much higher than the 4.65 million fans in the north and 2.04 million fans in Canada Goose.
However, although there are more than 10,000 items with the highest sales volume in Bosideng’s flagship store, they are all basic thin and light models priced at about 200 yuan; The highest sales volume in the north is about 3,000 pieces, with an average price of more than 2,000 yuan; Canada goose has a maximum of 300+ pieces, with an average price of about 10,000 yuan. It can be seen that Bosideng’s impression in the hearts of the public is still relatively affordable and close to the people.
In September this year, the average price of down jackets on the Jingdong platform was about 550 yuan, an increase of about 40% over last year.
In addition, down jackets are low-frequency consumer goods, it is difficult to achieve “small profits and quick sales”, and brands such as Bosideng are constantly increasing prices.
On November 26, Rui Jinsong, president of Bosideng Brand Division, said that in terms of price improvement, it will continue to rise in the future, and should reach more than 2,000 yuan. It is understood that the current main price of Bosideng has reached 1500 yuan – 1800 yuan.
Previously, according to the research report of Guojin Securities, in 2018, the price increase of Bosideng’s main brand was as high as 30% to 40%. From 2017 to 2018, the proportion of Bosideng’s products of 1000-1800 yuan increased from 47.6% to 63.8%; Products above RMB1,800 increased from 4.8% to 24.1%, while those below RMB1,000 decreased from 47.5% to 12.5%.
High prices trend, although the marketing cost is high, but the higher the profit.
According to Bosideng’s financial report, in fiscal year 2020/2021, distribution expenses, including advertising expenses, depreciation expenses for right-of-use assets, contingent rent and sales employee expenses, were approximately RMB4.807 billion, an increase of 12.4% year-on-year.
Bosideng’s overall gross margin increased from 46.4% in fiscal 2017 to 58.6% in fiscal 2021, narrowing the gap with Canada Goose.
However, the discussion volume of Bosideng’s more than 10,000 notes in Little Red Book is lower than the number of notes in Canada Goose exceeding 30,000 and the north exceeding 80,000, which shows that Bosideng lacks a social media explosion, and its young trend needs to continue to be cultivated.
The battle of the affordable brand live broadcast room – duck duck seizes Douyin, and flies into Kuaishou in the snow
In addition to high-end, Bosideng has also completed the layout of low-end product lines with the matrix brands Snow Fly and Bingjie.
On October 15 this year, Xuezhongfei brand flagship store started live broadcast on Kuaishou, cooperated with official service provider Carmela, implemented all-inclusive agency operation, used previously tested high-sales models to sell goods live, GMV exceeded 6.8 million in the first month, and became the second place in the self-broadcast ranking of women’s clothing brands in the Kuaishou E-commerce 116 Quality Shopping Festival.
While entering the live broadcast room, Bosideng is also increasing its own stores, closing a large number of offline stores and dealer online stores.
At the end of September 2021, the total number of retail outlets in the down jacket business decreased by 149 to 4,001 compared with the end of last year, including brands such as Bosideng, Xuezhongfei and Bingjie. At the same time, its self-operated retail outlets increased by 2 to 1,809, while the number of retail outlets operated by third-party dealers decreased by 151 to 2,192.
In particular, Xuezhongfei brand flagship stores and offline stores are actually mainly men’s clothing, but in the clothing category of short video live broadcast e-commerce platform, women have stronger purchasing power, “they will not only buy for themselves, but also for children, lovers, and the elderly according to their needs.” ”
According to the characteristics of the high proportion of women in the user portraits of the platform, 40% of Xuezhongfei’s launch plan is aimed at women to tap their consumption potential, and finally this investment strategy has achieved an input-output ratio of more than 4 times, and Xuezhongfei has also added a lot of women’s explosive products in the selection of products.
The biggest threat is that another affordable down jacket brand, Duck Duck, became popular on Douyin Snow Mountain live this year, rising 300,000 followers overnight.
Compared with the carefully arranged indoor live broadcast room in the past, the planning of duck and duck instantly attracted the attention of consumers. “We are now at an altitude of 5,000 meters, minus 9 degrees on the snowy mountains of Tibet, and the live broadcast here is to show everyone on the ground, the quality of our duck down jackets, whether it can resist the wind and keep warm.”
In addition, Duck Duck achieved excellent sales through the construction of the Douyin live broadcast room matrix and the live broadcast of celebrity Internet celebrities, and the cumulative GMV of goods on the Douyin platform exceeded 75 million in August. , also ranked first on the 818 Douyin clothing list. In September, duck duck sales on the JD platform of 7 million, also surpassed Bosideng.
On the Douyin platform, there are more than a dozen officially authorized live broadcast rooms of Duck Duck, and the scale of online store distribution is gradually expanding, with no less than 10 stores on the Jingdong platform alone.
On October 15th, the National Duck Duck Brand and the most expensive marketing company “Hua & Hua” held a strategic cooperation signing ceremony to jointly create super symbols. “You love me, I love you, Michelle Ice City Sweet Honey”, “Calcium in blue bottles, delicious calcium”, “Taking photos and shouting Tian Qi” are all successful marketing cases of H&H Company.
Duck Duck, a classic brand that first grew up from the Zhiying Society, once had a glorious history as a diplomatic gift, but is now considered obsolete, attracting young people through co-branded models such as Pokémon.
In November, Xuezhongfei also launched a joint series of Chinese aerospace culture, paying tribute to the ingenuity of Chinese astronauts, and also rubbed the concept of “meta-universe”, committed to fashion and youthfulness.
It can be seen that affordable domestic products also need new stories and marketing to be seen by young consumers.