“Back to Back” has been recognized by the public as another name for “Kappa”.
The brand that was once a household name has quietly disappeared from the public eye. The last time it “appeared” was because of the popularity of the “labelling” element in 2018.
However, the reporter interviewed by phone the 7 Kappa stores listed on Dianping. Only two of them are regular stores, and the rest are special sales and are located in Shanghai Umai Life Plaza. The discount store has been closed. According to mall staff, it was removed last month. The specific reason is unknown.
Not only does it raise questions, is the reduction of Kappa’s offline stores a problem in brand management?
1 Kappa’s offline stores have dropped significantly and their glory is no longer there
According to Yingshang Big Data, at the beginning of 2021, Kappa has settled in 295 shopping malls. Among them, the number of stores in East China accounts for 29.4% of the total number of stores. However, starting from the first quarter of 2020, the number of Kappa stores closed has exceeded the number of stores opened.
Although it is normal for the number of stores to fluctuate, when the number of stores is not large, this can be a dangerous “sign.”
Comparing the changes in the number of Nike stores in recent years, although the difference has fluctuated, overall the number of newly opened stores is still greater than the number of newly closed stores.
Analyzing Kappa’s financial reports in the past ten years also found that the number of Kappa offline stores had been showing an increasing trend before 2010. However, after this year, an inflection point appeared, and the number of Kappa stores It has embarked on a cliff-like decline, with a reduction of 2,581 stores in 2011, which is more than twice the number of existing stores. Kappa is no longer in glory.
In addition to the lower number of stores in recent years, the parent company China Dongxiang also sold Kappa’s Japanese business for approximately 91.26 million yuan due to poor performance. It is understood that Kappa developed its Japanese business after acquiring Phenix in 2008. However, starting in 2011, Kappa’s sales in Japan declined year by year, and it was eventually sold. Phenix was also “sold” in August last year for the next three years of brand exclusivity. The company claimed that it was to better focus on the development of the Chinese market.
2 There is always a reason for decline
Kappa has always been in an awkward position among sports brands and calls itself a sports brand. , but the product innovation in sports is not outstanding. Instead, it focuses on fashion, but its status in the fashion trend circle is not as good as before.
And for a brand, product innovation and quality are the guarantee for the brand’s sustainable development, but Kappa’s expenditure on product design and research and development is also being compressed. In 2021 The proportion in 2018 was only 1.34%, a decrease of 0.15% from the previous year. Li Ning’s product research and development expenses have remained at 2%-3% since its launch, and Anta’s has also remained above 2% in recent years.
On the contrary, Kappa has invested a lot of money in brand advertising and sales. In recent years, in order to cater to the interests and hobbies of current consumers, it has conducted extensive cross-border joint marketing, not only well-known animation IP One Piece has also teamed up with various artists, Yiyu experts, etc. In 2021, advertising expenditures accounted for 46.77%, a year-on-year increase of 8%, while Li Ning and Anta’s advertising expenditures only accounted for about 10%.
Consumers are the vane of the market, but marketing must still be based on product quality, so as to achieve the effect of 1+1>2 and achieve sustainable consumption power transformation. Otherwise it will become a “flash in the pan” brand.
The current sports brand competition is fierce, but it is still a red ocean market. Especially now that domestic products are so popular, domestic sports brands have also come to the forefront.
In this case, the market is divided more and more finely, and Kappa turns its attention to the mid-to-high-end market.
Although Kappa has signed contracts with the Chinese equestrian, fencing and skateboarding national teams, it wants to use niche sports to improve the brand’s positioning in the market. But since 2011, Kappa’s brand image has gone downhill.
That year, the entire domestic sports market was at a low ebb, and Anta, Li Ning, etc. were all affected.
Anta quickly adjusted its dealer system at that time and cleared its inventory by opening factory stores and e-commerce channels. Since 2014, its operating income has been rising. Although Li Ning did not handle inventory in a timely manner and had frequent changes in senior management, it found its brand positioning in 2017, transformed into a trendy brand, and reversed the adversity.
But because Kappa lost control of its outsourcing suppliers, counterfeit goods were rampant in the market and inventory devalued in those years. Moreover, it failed to deal with these problems in a timely manner and failed to catch up with them. Seizing the right opportunity, the brand image eventually continued to decline and it lost its market position at the time.
In the past, the image of mid- to low-end brands was deeply rooted in the hearts of the people. If they wanted to seize the minds of mid- to high-end consumers in a short period of time, they might not have enough energy to do so. This phenomenon has improved in recent years, but the impact is still there today.
3 Can we return to the top?
Kappa is considered by many people to be “a good hand beaten to ruin”. You know, Kappa used to be very prosperous.
In the late 1960s, it took the lead in opening up a new market segment of sportswear from unisex styles. In the late 1970s, it began to provide sponsorship for professional athletes and teams, becoming the first Italian brand Brands that sponsor football teams, sponsor top or outstanding teams, including��Juventus, AC Milan, etc. In the 1980s, it sponsored the U.S. National Track and Field Team and provided the team members with the most advanced equipment. After the 1990s, Kappa once became Europe’s largest privately owned sports products group, and even sponsored the world’s top Italian national football team, becoming the only brand that can print its trademark on the Italian national team’s jerseys. The revolutionary jersey developed in the early 21st century was even snapped up.
After entering China, Kappa saw the vacancy in the fashion market and began to boldly innovate and try to enter the fashion circle. Inviting a large number of celebrity endorsements, sponsoring variety shows and sports events, sales surged.
But the shift in the center of gravity made Kappa lose its glory, and Kappa gradually realized the reason. In the financial report for fiscal year 2021, the company also stated that in the future, the company will return its brand focus to sports, continue to launch different mid-to-high-end sports products, strengthen the closeness of the brand and sports, and create a “national trend” brand image. Take root in the Chinese market and innovate products.
The next development direction of Kappa may still focus on fashion. In May this year, Kappa just launched its first brand show in China, and in the same month, it opened its first brand show in Sanlitun, Beijing. A Kappa concept store creates a high-end and customized consumer experience for consumers and further shapes its image as a mid-to-high-end sports brand.
After the BCI incident, the domestic product market ushered in a new outbreak. The reduction in the number of Kappa stores is only a reflection of its no longer glory. The current fierce competition is not only a challenge, but also a re-emergence of Kappa. It depends on whether it can seize the opportunity. </p
