In the lush years of the post-90s generation, compared with the expensive Adidas Nike, domestic sports brands such as Li Ning, Anta, Xtep, 361, and Hongxing Erke have always been the first choice for ordinary Chinese people. After two decades of development, Li Ning and Anta have long become the pride of domestic fashion brands.

Hongxing Erke, which once kept pace with Anta and enjoyed unlimited fame, has long since fallen into a development bottleneck and fallen silent. In the trend of great development of domestic products, Hongxing Erke has been "laggard" for a long time.

All shoe brands in the world come from Jinjiang

China has two major shoe cities, Putian and Jinjiang. Both places made their fortunes through contract manufacturing, and Putian has gone further and further in counterfeiting. After events such as the Putian-affiliated hospital, Putian has become synonymous with counterfeiting in the hearts of the Chinese. There is a famous saying in martial arts circles that the world's martial arts originated from Shaolin, and Jinjiang is the "Shaolin Temple" of Chinese sports brands.

Jinjiang has embarked on the right path of independent development. In the mid-1990s, Jinjiang's OEM shoe factories transformed and began to establish their own brands. Brands such as Anta, 361, and Xtep have been established in Jinjiang, and Jinjiang has become a cultivation base for Chinese sports brands. The gathering of sports brands in Jinjiang has given Jinjiang a strong cluster effect, attracting more and more manufacturers to establish sports brands in Jinjiang.

The latecomer Hongxing Erke

In 2000, 25-year-old local Wu Rongguang founded many sports brands? Hongxing Erke in Jinjiang. Hongxing Erke, which was only established in 2000, started several years later than Anta, 361 and other brands. At that time, the high-end market in the sports brand market was dominated by foreign brands, the mid-range market was occupied by new brands such as Li Ning Anta, and the low-end market included brands such as Bago. These brands had already established complete sales networks across the country.

In a brand that is close to solidifying in the sports market, Wu Rongguang sensitively grasped the market demand and forged a path of his own. Hongxing Erke avoided the highly competitive basketball and football fields at that time. Seeing the popularity of tennis in China after 2000, Hongxing Erke won the sponsorship rights for tennis events.

Enter the tennis market with great success

In 2004, the first China Tennis Open was held. At that time, tennis was as popular as NBA and football. The name Hongxing Erke also spread throughout the country thanks to the spring breeze of tennis. That English advertising slogan that always competes for the first place (TO BE No. 1) makes Hongxing Erke give young people a sense of fashion and youth. For a time, teenagers across the country set off a craze for wearing Hongxing Erke.

2005 was the most glorious moment for Hongxing Erke. Hongxing Erke’s tennis shoes and Adidas Nike’s tennis shoes were known as the three major brands of tennis shoes in the world. Hongxing Erke went out in full force and launched many sports shoes, all of which were successful. At that time, Hongxing Erke had the potential to surpass Anta and Li Ning.

Being the first to be listed and becoming the No. 1 company. Expansive expansion leads to "indigestion"

Under a good situation, Hongxing Erke was listed in Singapore. This is China's first apparel company to be listed overseas. Compared with predecessors such as Anta and Li Ning, Hongxing Erke only took 5 years to complete the feat of listing and become the No. 1 player in the sports market. After completing the fundraising after going public, Wu Rongguang, who had a large amount of capital in hand, began large-scale expansion.

Hongxing Erke’s expansion is divided into two directions. One is to continue to capture the tennis market. Hongxing Erke continuously sponsored many events such as the Shanghai Masters and the WTA Annual Finals in 2006. Wu Rongguang was also ruthless when it came to signing tennis stars. Between 2005 and 2006, a large number of tennis celebrities were brought under the command of Hongxing Erke.

These actions are successful in brand promotion, and sponsoring large-scale sports competitions has always been the best choice for sports brand promotion. The other way is large-scale expansion. In order to seize the market, Wu Rongguang proposed the strategy of Hongxing Erke to have stores in every county-level unit. In 2006, the number of Hongxing Erke stores had expanded to 7,000.

The rapid expansion of store size has brought about many problems that are difficult to solve. Skyrocketing costs, increasing management difficulties, and fierce competition are all headaches for Wu Rongguang. In order to solve these problems, Hongxing Erke has invested a lot of energy and reduced its focus on the market.

After 2006, as China’s sports consumption market further upgraded, brands such as Li Ning and Anta gradually withdrew from the low-end market of sports brands and began to try to expand in the high-end market. Around 2006, brands such as Li Ning and Anta took advantage of the popularity of the NBA in China and boldly imitated the Adidas Nike model, signing former NBA stars and launching exclusive signature shoes that were high-end products.

Erke's actions, which suffered from "indigestion" due to expansion, began to be conservative. Seeing Anta, 361, etc. moving towards high-end products, Erke was determined to attack and stabilize the low-end market. Under the guidance of the idea of ??"deep cultivation of the third line", over the years, most of the flagship products launched by Hongxing Erke are less than 200 yuan.

The low-price strategy has prevented Hongxing Erke from gaining recognition in the market. Hongxing Erke, which has had no hit products since 2006, has completely become a second-tier small brand in the sports market. The biggest problem faced by Hongxing Erke, which only focuses on expansion, is not the increase in investment, nor the increasingly weak appeal of its products to the market. The biggest problem of Hongxing Erke is that the management has lost its sensitivity to market changes.

The reasons why Hongxing Erke "falls behind"

Today's Hongxing Erke has become a brand with no famous products, no strategy, no reputation, and no marketing. There are many reasons why Hongxing Erke is in today's predicament. .

The primary reason is that the focus of the brand layout is undecided. Looking at Hongxing Erke’s opponents, Xtep, which has been suppressed by Hongxing Erke, insists on the running shoe market and insists on sponsoring domestic marathon events. Xtep, which continues to consolidate its position in the running shoe market, is now the leader in running shoes. Li Ning and Anta are based on the comprehensive sports market and have gradually become representatives of domestic fashion brands through their star strategy. Their products can even trigger a rush in the United States, Nike's home base.

Hongxing Erke, which made its fortune from the tennis brand, has never been able to become a high-end brand in the tennis market. After Hongxing Erke went public, it was busy expanding and solving problems caused by expansion. Hongxing Erke has not deeply explored the tennis market, resulting in its tennis market share being eroded by Adidas Nike. Hongxing Erke has also entered the children's clothing market. This strategy of rushing to seek medical treatment can only lead to failure.

The second reason is the lack of accurate marketing ideas. Anta was able to achieve a breakthrough in brand awareness, and the signing of NBA star Thompson was an important reason. Spending huge sums of money to sign Thompson, who was not a first-line star in the NBA, seemed like a risky move at the time, but now it seems to be a classic marketing case.

In order to regain its former glory, Hongxing Erke, which has fallen far behind the mainstream market, is still trying to catch up. Spending a lot of money to hire celebrities for publicity and inviting well-known designers to launch new shoe styles are all manifestations of Hongxing Erke's unwillingness to be left behind. Hongxing Erke's marketing director said frankly that creating product brand power is Hongxing Erke's most important task at the moment.

Can Hongxing Erke be the No.1 player it once was?