After The Storm Of The Cave Shoes, Crocs Diversified Road Is Expected To Be Reborn.

The United States that started with "hole shoes"

Crocs (CROX.NASDAQ, hereinafter referred to as "card Luo Chi"), can be described as "Cheng Dong cave shoes, also defeated cave shoes."

Because cave shoes became famous in rivers and lakes, they were once trapped in bankruptcy crisis due to their single product and imitation.

After the ups and downs, Crocs sales revenue finally reached $1 billion in 2011, all of which stems from Crocs's forced diversification.

Diversification strategy

Crocs fame in World War I depends on a pair of shoes that are considered "ugly shoes" by the outside world.

But because the product is too single, it also makes Crocs suffer a lot and is forced to embark on the road of diversification.

Li Tun, chief executive officer of clocke Trading (Shanghai) Limited, told the first Financial Daily yesterday that the breakthrough in product diversification is the biggest force in Crocs in recent years.

In addition to constantly updating the style of the shoes, Crocs also launched canvas shoes, casual leather shoes, golf shoes, and even the present high-heeled shoes.

At present, Crocs will launch hundreds of shoe styles every quarter.

In addition to shoes, Crocs is developing clothing and accessories.

According to its 2011 earnings report, sales of clothing and accessories accounted for 3.7% of the total turnover.

Clothing is mainly casual sports wear for adults and children. The materials used are very light and waterproof, folded up to make a small bag easy to carry.

Accessories are decorative accessories that can be inserted into shoe holes, such as flowers, grass or small animals.

In the promotion of channels, Crocs is also trying to diversify.

Li Tun told reporters: "Crocs stores will expand in the way of increasing the area and improving the location. At the same time, they will push forward to two or three line cities or even three or four line cities. In the channel, they will adopt the way of" walking on two legs "by means of retail channels and online channels.

At present,

Already has 450 retail outlets, which are distributed in 105 cities in the country, and sell more than 150 thousand pairs of shoes every month.

In 2011, Crocs sales revenue increased by 27% from 789 million 700 thousand US dollars in 2010, and total sales revenue reached US $1 billion for the first time. Asia and Europe grew by more than 1/3, while the Nike of similar products took 22 years to reach this figure.

In addition to the traditional Croslite resin materials, Crocs has also adopted more new materials.

"Now, the contribution of plastic shoes and new material shoes to our sales is evenly divided."

Li Tun said.

John Makaful, chief executive of Crocs, told the media earlier this year that the company plans to double its global sales in less than 5 years by the new design. It is expected that Asia will become the largest Crocs market by the end of 2013.

Mccarver also said that sales in the next 4 to 4 and a half years could increase from $1 billion to more than $2 billion.

high pricing tactics

In fact, Crocs encountered a "cold spell" at the beginning of its listing.

In 2007, the gross profit margin of Crocs was 58.7%.

By 2008, the financial tsunami not only caused the European and American economies to enter the cold winter, but also Crocs suffered the first loss.

In 2008, Crocs received a net loss of $185 million 100 thousand, and the company's share price fell 76%.

Some foreign media also predicted that Crocs would face bankruptcy crisis.

Some analysts believe that the initial crisis of Crocs is affected by the big economic environment on the one hand; on the other hand, because the early product is single, the company is involved in sports clothing and other businesses too early.

In order to get rid of the difficult situation, Crocs began to adjust the direction of diversification, while strengthening the company's inventory sales, it also quickened the frequency of the company's product design.

Li Tun disclosed that, at present, a new product has a preliminary idea from design to screening to purchase materials, and then to produce finished products, the cycle is controlled for one year.

However, in China, Crocs is also facing a special dilemma, that is, there are large quantities of imitation products that are only "genuine".

Reporters at the Crocs store and its online shopping mall saw that the price of the brand new product ranged from 469 yuan to 539 yuan, and a man's summer net shoes even sold to 669 yuan.

A salesperson at the new Crocs store in Nanjing West Road, Shanghai, told reporters: "Crocs does not discount, do not cut prices, and there is almost no discount for over season products."

But Crocs's imitation is vastly different from the real product in terms of price.

Reporters in Yu Garden small commodity market to see, many of the imitation version of the cave shoes as long as 10 yuan a pair, not to the genuine zero.

Apart from different materials, appearance does not make much difference.

A shopkeeper who sells the imitation cave shoes told reporters, "in the summer time, it is not a problem to sell twenty or thirty pairs a day, and many people buy them as slippers."

Mccarver has told foreign media that although competitors such as Nike and Deckers have moved to consumers by raising the price of rising labor and raw materials, Crocs will not raise prices for the time being.

"In the next 3 to 5 years, our business will grow at a rate of 15% to 20% per year."

Mccarver said Crocs will also shift its 10%~14% production from China to Vietnam as China's wage increases pressure on profitability.

He stressed that gross profit in 2012 will be unchanged from last year.