market voice
It may be difficult for Hongxing Erke to rely on donations to reproduce the miracle of last year's skyrocketing performance.
Relying on donations again and again to retain the enthusiasm of consumers is not sustainable. After the enthusiasm dissipates, how to survive the competition in the domestic sports brand market is the difficult problem they face.
Hongxing Erke, who became popular last year because of "bankrupt donations", has now become the focus of the Internet because of donations.
On July 30, Hongxing Erke's official Weibo announced that it has donated 100 million yuan to the Fujian Disabled Persons Welfare Foundation to help the disabled and their families improve their quality of life.
This move aroused heated discussions among netizens. Some people commented that they would go to "wild consumption" to support the light of domestic products; but some people believed that Hongxing Erke used donations to maintain the popularity.
When donating to Henan before, there were some voices questioning Hongxing Erke's "fraudulent donation".
It is understood that at that time, the materials donated by Hongxing Erke accounted for the vast majority.
On August 1, the Red Star Capital Bureau called the Fujian Disabled Persons Welfare Foundation, and the staff responsible for donations responded that more than 80% of the 100 million items donated by Hongxing Erke may be materials, all of which are clothes of Hongxing Erke's own brand. Funds are now in place.
The Red Star Capital Bureau found that after donating to the "7.20" Henan heavy rain disaster disaster area in Zhengzhou, Henan, Hongxing Erke made several donations, almost once, and once to increase fans.
But behind this, fans' enthusiasm for "wild consumption" is gradually showing signs of fatigue.
Hongxing Erke donated again
80% is the material part of the payment has been in place
A year later, Hongxing Erke announced that it would donate 100 million yuan to the Fujian Disabled Persons Welfare Foundation, which once again became a focus of attention.
On July 30, the domestic sports brand Hongxing Erke held a "Grateful Growth Day" live broadcast, announcing that it would donate 100 million yuan to the Fujian Disabled Persons Welfare Foundation to help disabled groups in need.
The topic of Hongxing Erke donating again quickly fermented on social platforms.
On July 31, the topic of "Hongxing Erke donates another 100 million yuan" topped the Weibo hot search list; so far, its number of views has exceeded 540 million, and it has also caused heated discussions among netizens.
The Red Star Capital Bureau noticed that under the topic of Hongxing Erke's donation of 100 million, some Weibo netizens commented, "This is too positive, I donated any money I made," and some netizens said that they would use actions to support Hongxing Erke. You can consume wildly again.” “It’s a conscientious company. I have to buy a pair of Hongxing Erke sneakers to support it.”
But some netizens think that this may be a hype, "no one will buy it if you don't hype it", "don't you always use donations to maintain the popularity".
According to the Securities Times e company report, the sudden popularity once again brought fire to the Hongxing Erke live broadcast room.
At around 9:00 p.m. on July 31, nearly 170,000 people poured into the Hongxing Erke live broadcast room, and many fans left messages mentioning the donation.
In July last year, due to the "bankrupt donation" to the "7.20" heavy rainstorm disaster area in Zhengzhou, Henan, Hongxing Erke became a "light of domestic products" overnight. The sales performance soared 52 times and many products were out of stock.
The Red Star Capital Bureau noticed that on the morning of July 31, the official WeChat account of the donated Fujian Welfare Foundation for the Disabled stated that Hongxing Erke promised to donate another 100 million yuan worth of materials and donations to set up "Red Star Love ·" Helping the Disabled” project.
But no specific details of the donation were given.
On August 1, the Red Star Capital Bureau called the Fujian Disabled Persons Welfare Foundation, and the staff responsible for donations responded: "At present, the 100 million donations from Hongxing Erke are still under negotiation, and it should be mainly materials, and then allocated. some cash."
The above-mentioned staff added that more than 80% of them may be materials, all of which are clothes of Hongxing Erke's own brand, and now the funds are in place.
However, the staff member did not tell the Red Star Capital Bureau how much money was received.
On July 25, 2021, Zhengzhou Charity Federation also mentioned in an interview with the Red Star Capital Bureau that among the 30 million donations from Hongxing Erke, the agreed content was 29 million materials and 1 million donations.
Donate once to increase fans once
A single live broadcast once sold 22 million
Hard to break a million now
In July 2021, Hongxing Erke donated 50 million yuan to the disaster-stricken area of Zhengzhou, Henan Province, despite its own losses for successive years, arousing public attention.
For a time, the topic of Hongxing Erke's "bankrupt donation" dominated the Internet, and netizens came to the live broadcast room to "wild consumption" to show their support.
On July 23, 2021, Hongxing Erke broke a number of records: sales surged 52 times, total sales exceeded 22 million yuan, and many products were once out of stock.
Since then, many consumers have rushed to Hongxing Erke's physical store to check in and support, and even wild consumption behaviors such as "men buy 500, pay 1,000 and run away".
The Red Star Capital Bureau noticed that after that, Hongxing Erke made several donations.
According to the official WeChat account of Hongxing Erke, on October 10, 2021, Hongxing Erke announced that it will donate 20 million yuan of supplies to the rainstorm disaster area in Shanxi.
On March 17, 2022, Hongxing Erke stated on its official Weibo that it would urgently help Quanzhou, donating 5 million yuan of supplies and nearly 500 sets of talent apartments with complete living facilities for temporary isolation points.
Every donation makes Hongxing Erke gain a lot of popularity.
The Red Star Capital Bureau found that on the day of announcing the donation to Shanxi, the official account of Hongxing Erke Douyin added 1,192 fans.
After announcing the donation of 100 million items this time, the Red Star Capital Bureau learned from the new Dou Data platform that from July 30 to 31, the Douyin account of the "Hongxing Erke Brand Official Flagship Store" increased by about 20,000 followers.
But behind this, fans' enthusiasm for "wild consumption" is gradually showing signs of fatigue.
According to new data, the estimated sales of the "Hongxing Erke Brand Official Flagship Store" in July 2021 are as high as 110 million yuan, and the average number of viewers of 23 live broadcasts exceeds 11 million.
But in the following months, its live broadcast room data has experienced a cliff-like decline.
The account's estimated sales in August 2021 were 39.7 million yuan, about one-third of July's.
In the next six months, its monthly GMV (gross merchandise transaction) never exceeded 20 million yuan again.
Red Star Capital Bureau found from the Feigua data platform that since the announcement of the donation of 100 million yuan on the evening of July 30, the Douyin account of the "Hongxing Erke Brand Official Flagship Store" has conducted a total of 5 live broadcasts, and the one with the highest number of viewers is 591,000. The estimated sales are up to 981,000 yuan.
Compared with the data on July 23 last year, it is a far cry.
Some market voices believe that Hongxing Erke may be more difficult to rely on donations to reproduce the miracle of last year's skyrocketing performance.
Relying on donations again and again to retain the enthusiasm of consumers is not sustainable. After the enthusiasm dissipates, how to survive the competition in the domestic sports brand market is the difficult problem they face.
News Watch
Hongxing Erke this year
Rejuvenation, opening new stores, pushing high-end models
Before the popularity, Hongxing Erke's sales performance was far behind Anta (02020.HK), Li Ning (02331.HK), Xtep International (01368.HK), and 361 Degrees (01361.HK).
The Red Star Capital Bureau noticed that according to the WeChat public account of Jinjiang Economic News, Hongxing Erke was listed on the top 100 private enterprises in Fujian in 2019, ranking 81st, and announced that its operating income was 2.227 billion yuan.
In 2020, Hongxing Erke was again listed on the top 100 private enterprises in Fujian, ranking 82nd, with an operating income of 2.843 billion yuan.
As for the specific profit figures and more detailed financial situation of Hongxing Erke, there is no official data.
The annual revenue of Anta, Li Ning, Xtep International, and 361 Degrees in 2020 was 35.51 billion yuan, 14.457 billion yuan, 8.172 billion yuan, and 5.127 billion yuan respectively.
From this point of view, Hongxing Erke's revenue in 2020 is less than one-tenth of Anta's and one-fifth of Li Ning's.
But after becoming the "light of domestic products", Hongxing Erke's situation has changed a lot.
According to Times Finance and Economics, at 0:45 on the first day of the "Double Eleven" shopping festival in 2021, 382 brands had a turnover of over 100 million yuan on Tmall's "Double Eleven" shopping festival, including Hongxing Erke.
Hongxing Erke brand director Zhang Feng then confirmed the data.
Hongxing Erke also took this opportunity to "upgrade the brand".
In October 2021, in order to cater to the consumers of the Z era, Hongxing Erke launched the Xingchuang concept store.
In May of this year, Hongxing Erke’s official WeChat post said that the Hongxing Erke Xingchuang concept store and Pro image store will open on May 1. It also said that it has deepened cooperation with Wanda, and the Pro image store has settled in 11 Wanda business districts.
At the same time, Hongxing Erke also strives to move closer to young people, launching a youth design co-creation competition, combining with elements such as the glory of the king, the second dimension, the national style, and the national comics to launch a joint model.
Behind the promotion of the brand, Hongxing Erke has launched a series of high-end products.
On August 1, in the official flagship store of Hongxing Erke, the highest price of a sneaker was 689 yuan, which was a joint model with the glory of the king.
In addition, there are 4 sports shoes priced at more than 500 yuan.
But on the other hand, looking back on the past year of Hongxing Erke, three months after its donation became popular, there was a wave of doubts about the "dissipation of heat".
In November 2021, the Red Star Capital Bureau found that after the heat passed, the number of fans on the Hongxing Erke online platform also plummeted, losing nearly 10,000 fans almost every day.
At that time, the Red Star Capital Bureau visited a number of Hongxing Erke stores and found that the offline traffic of the stores had been greatly reduced.
Many shop assistants told the Red Star Capital Bureau that the current customer flow in the store has returned to normal compared with the peak period in July and August. Except for a few shoes that are broken, the goods are complete.
On August 1, 2022, the Red Star Capital Bureau once again visited several Hongxing Erke stores in Chengdu. There was not much offline traffic, and the clothing and sports shoes in the store were all promotional activities.
When the Red Star Capital Bureau asked if there was another explosion of sales in July last year, the clerk said that it was inconvenient to inform, and the company would not let it.
Chengdu Business Daily-Red Star News reporter Yu Yaoqiang Yaxian