The 6th China International Import Expo was held in Shanghai from November 5th to 10th. Chen Weili, a partner of SKECH China and CEO of SKECH China, South Korea, and Southeast Asia, has been interviewed by multiple media outlets, including Daily Economic News.
This year, SKETCH has opened over 700 stores in China, and the initial plan for next year is 600 to 700. "Chen Weili introduced that in the future, SKETCH will increase its investment by 1 billion yuan to renovate its Asia Pacific product research and development center, restructure more functional departments, and strengthen internal infrastructure. For example, by 2025, SKETCH will complete a SKETCH China logistics center with a total investment of over 3 billion yuan, and build a Chinese live streaming base.
According to the company's recently released financial report for the third quarter of 2023, SKECH's sales in the third quarter reached 2.02 billion US dollars, an increase of 7.8% compared to the same period in history, setting the best record for the same period in history, with a gross profit margin growth of 52.9%. Among them, the revenue growth in the Chinese market reached 18%.
Joint venture stores account for approximately 80%
Chen Weili stated that China is currently the largest overseas market for the SKETCH brand. Consumers in the Chinese market are increasingly demanding products, emphasizing their quality and functionality. SKETCH has a diversified product line that can meet the wearing needs of all age groups and multiple scenes in China.
During the epidemic, I did not go abroad and reformed every department of the company. There are several principles that I would ask: Do you believe in China? Because the practice of not believing is different from the practice of believing, so first, I said I believe in China
Speaking of the reasons why SKECH has maintained growth this year, on the afternoon of November 3rd, Chen Weili stated in an exclusive interview with the Daily Economic News reporter that the Chinese market can achieve 18% growth not only due to the company's product strength, but also because the company has innovated its inventory management and sales channel cooperation model in the past few years.
My idea is to reform within the company, optimize inventory management, and switch to a joint venture model to expand the market. During the pandemic, we need to strengthen our e-commerce system and connect all channels with one inventory. According to Chen Weili, SKECH's current joint venture model is DTC (Direct To Customer), which includes product training, inventory management, and discount models.
Previously, you were my customer, but now you are my channel service provider, "he continued." We will control all inventory, discount, connect online and offline channels, and improve the efficiency of inventory management... Unlike before when you bought goods, you need to digest yourself
If it is wholesale, the goods will be very single, and wholesalers are afraid to take risks to obtain a variety of products. Therefore, we want to connect the system more and understand the inventory of each store. Chen Weili said that the above system has been fully put into use last year, and has led to an increase of about 30% in SKECH's revenue compared to the same store. At present, 80% of SKECH's stores have changed to a joint venture model. In the future, SKECH will continue to strengthen its membership system content and digital investment.
Will further increase the proportion of professional sports sectors
When it comes to current consumer trends, Chen Weili stated that consumer shopping habits have changed. At the same time, consumers are more rational, they pay more attention to the cost-effectiveness and functionality of products, and their consumption habits become more cautious.
In addition, Chen Weili also mentioned that consumers nowadays pay more attention to healthy exercise. Outdoor and sports are a major trend, and when the weather is good, people are more willing to enjoy nature in parks. Outdoor sports are becoming increasingly popular, and because of this opportunity, we have strengthened our outdoor product line. SKECH's outdoor products are relatively mature and have many comfortable technologies
As of now, SKECH's products cover the fields of running, football, and basketball, as well as the GOWALK series of flagship products, sports shoes that use rackets to hit the ball, and outdoor products.
Exploring and developing towards professional sports has become one of Sketch's development directions. This year, Sketch launched basketball shoes and football shoes respectively, and made a new product debut at this CIIE. As for the proportion of leisure and professional products, it is understood that currently SKECH has set a target of 70% and 30% for the proportion of fashion, leisure, and professional sports related products.
SKECH started as a casual shoe company, and we started researching and developing professional sports and running shoes as early as 2012. Therefore, from 2012 to now, we have been developing into the professional sports field. Our current consumer group is actually a bit different from other traditional sports brands. They have a more male customer group, and we have a more female customer group. Therefore, with the development of our football and basketball shoes on the track, we have also I hope to grow in the male customer base