Author | Andy

Edit | Zhou Ye

Women’s shoes are surging. Looking back at the women’s shoe brands that were once popular, many have disappeared.

At the beginning of 2022, women’s shoe brands announced on Saturday a plan to package and sell their footwear sales business, and said that they were ready to transform into live streaming goods. Other traditional women’s shoe brands are also declining, and Belle Group was delisted after being acquired in 2017; Fugui Bird went bankrupt in 2019; Daphne announced in mid-2020 that it was withdrawing from China’s mid-to-high-end brand retail business after six consecutive years of losses.

These women’s shoe brands, which were originally famous in China, Belle, Fugui Bird, Daphne, Saturday (ST&SAT), etc., have long lost their former glory.

Some of Belle’s footwear brands, photo/Belle’s official website

It is not difficult to see that under the development of the times, women’s consumption concepts have changed, and more and more female consumers no longer prefer high heels, which has also turned the traditional women’s shoe companies based on high heels upside down.

Women’s shoe brand Saturday financial report shows that as of the first three quarters of 2021, the company’s net profit attributable to the parent was -146 million yuan, down 28.77% year-on-year; Non-net profit was -152 million yuan, down 35.29% from the same period last year.

Nowadays, the more popular in the market may be more Martin boot brand Dr. Martens, Timberland, sheepskin boot brand UGG, and some new women’s shoe brands that focus on comfort features.

How can the entire traditional women’s footwear industry break the ice and seize the new generation of young women in marketing, design, quality and other aspects? Quickly giving the answer to this question may be the key to breaking the game for women’s shoe brands.

The old women’s shoe brand is in decline

With the changes of the times, the old women’s shoes are losing steadily, and some women’s shoes products have even become a “burden” for performance.

On Saturday, January 18, 2022, the performance forecast was released, saying that it is expected to lose 430 million yuan to 645 million yuan in 2021, of which the footwear business has bad debts and falling prices are the main reasons. The projected loss was Saturday’s biggest since it went public in 2009.

Saturday results forecast, picture/Saturday official announcement

The reason for the loss, Saturday said that the epidemic had a greater impact on offline commercial sales, which had a great impact on the company’s footwear inventory, coupled with the company’s additional costs due to business transformation, resulting in the footwear business in an operating loss throughout the year. The operating income scale and net profit level of the two fashion new media companies controlled by the company have both decreased significantly.

In addition, the company implemented the 2021 equity incentive plan at the beginning of the year, resulting in amortization expenses of about 80.08 million yuan for the whole year, which also had a greater impact on the company. Among them, the sluggish performance of footwear products was the main reason for Saturday’s sharp losses.

According to a moment of business understanding, Saturday has its own brands such as ST&SAT (Saturday), D:FUSE (Difus), SAFIYA (Sophia), FONDBERYL (FONDBERYL), etc., and has a certain popularity in the women’s shoe market. However, with the boom in online sales in recent years, it is difficult to do offline business, and the pressure on traditional footwear and apparel companies is naturally increasing.

The decline of established women’s shoe brands is not only Saturday, and Belle Group has not been able to avoid the decline.

Belle Group was delisted from the Hong Kong Stock Exchange in 2017. Before the delisting, Belle Group’s last financial report showed that as of February 28, 2017, Belle Group’s revenue was 41.707 billion yuan, a year-on-year increase of 2.2%; Net profit was RMB2.403 billion, down 18.1% year-on-year. In the earnings report, Belle said that the decline in profit was mainly due to the sharp contraction of revenue and earnings of the higher-margin footwear business, which was not offset by the growth of the sportswear business with lower profit margins.

From its listing in 2007 to its delisting in 2017, who would have thought that Belle would end up like this in this decade.

Originally, Belle relied on shopping malls, offline small stores and other channels to achieve rapid development, with a market value of HK $67 billion when it was first listed, and the number of stores during the subversion period exceeded 20,000. But what Belle never expected was that after 2013, the e-commerce era rose, and those footwear companies riding the east wind of e-commerce gradually left Belle behind, and Belle failed to catch up with this wave of e-commerce.

According to public information, in 2015, Belle Group’s net profit fell for the first time in nine years since listing, falling by more than 38%. By the end of 2016, Belle International had decreased by more than 7,000 stores from its peak of 20,738 stores.

Of course, the root cause of Belle’s decline is not only external factors such as the impact of e-commerce, but also internal factors such as the decline of its own products and brand power. Under the changes of the times, Belle has not been able to keep up with the changes in consumer demand, and the women’s shoes it designs are gradually unable to meet the needs of the new generation of consumers.

Coincidentally. According to the Southern Metropolis Daily, Daphne, a Taiwanese-funded women’s shoe group that once had the title of “the first brand of women’s shoes in the mainland”, has closed an average of 1,256 stores annually in the past five years since 2015. In 2020, Daphne decided to close all offline stores. Compared with the historical peak, Daphne’s share price has plummeted by 98%, and the company’s total market value has fallen from a peak of HK$19 billion to only HK$350 million. In the first half of 2021, Daphne’s revenue plummeted to 50 million yuan from 212 million yuan in the same period of the previous year, a year-on-year decrease of 77%.

The reasons for Belle’s decline are roughly the same, strategic mistakes, blind expansion, and old-fashioned brand design are also important reasons for Daphne’s fall from the top.

According to Caixin, in 2010, Daphne and Baidu cooperated to invest in the B2C platform “Yaodian 100”, creating the first “online shopping + store pickup” operation model. Daphne has injected 300 million yuan into the platform, while closing other distribution channels such as, Haole and Letao.

Unfortunately, Daphne’s online strategy didn’t work. Two years later, the Yaodian 100 website ceased operations, which also allowed Daphne to miss the best time to transform into e-commerce. In addition, due to the continuous decline in product quality, this exacerbates its own decay.

Faced with operational difficulties, some companies choose to concentrate on development and try to break through, while some companies have begun to weaken the women’s shoe business and turn to diversified development.

After changing its name from “Foshan Saturday Shoes Co., Ltd.” to “Saturday Co., Ltd.” in early 2016, the women’s shoe brand Saturday began to increase investment in social e-commerce, live streaming e-commerce and other fields, and acquired the live streaming e-commerce company Yaowang Network for nearly 1.8 billion yuan in 2019.

According to the financial report, in the first half of 2021, the GMV (e-commerce turnover) of remote online sales was about 3.6 billion yuan, about four times that of the same period last year. At the beginning of this year, it was announced on Saturday that it planned to sell the footwear sales business in a package, only retain the footwear trademark, and transform into live streaming goods.

Unlike Saturday’s comprehensive transformation, Daphne still wants to save itself by hiring celebrity endorsements and introducing new brands. But even with its launch in 2015 with a lineup of stars such as Nicholas Tse, Jun Ji Hyun and Liu Shishi, it still couldn’t recover the declining business.

According to Beijing Business Daily, Xu Xiongjun, a strategic positioning expert and founder of Shanghai Jiude Positioning Consulting Company, once said that the reason for the slump of traditional shoe companies is more due to the difficulty of transformation of large-scale offline expansion. When the consumer environment changes, it is difficult for traditional shoe companies to quickly transform into a new retail model because of redundant offline stores, while the cost is doubled, product homogenization is serious, brand aging is difficult to adapt to the changing needs of consumers, and finally they have no choice but to decline.

Consumer aesthetics have changed, which brands have seized the opportunity?

Looking at the women’s shoe brand market, emerging brands have a completely different way of playing with established shoe companies in terms of products and marketing, which has also allowed them to gain the favor of more young female consumers.

Nowadays, in order to better improve work efficiency and practice pragmatism, more and more women often take comfort as the primary criterion for choosing shoes. The world of comfortable shoes is also becoming lively. Suddenly, the popularity of stiletto heels plummeted, and durable and comfortable women’s shoes began to dominate the headlines and attracted the attention of investment institutions.

According to 36Kr reports, in the middle of last year, the high-heeled shoe brand “7or 9” completed tens of millions of yuan in pre-A round and A round financing. The Pre-A round of financing was exclusively invested by Zhonghui Capital. The Series A financing was led by Fengshang Capital, and Zhonghui Capital continued to follow the investment.

7or 9 financing situation, figure/day eye check

Beijing Business Daily reported that more than 90% of the revenue of the “7or9” brand comes from online, and at the beginning of the beginning, relying on the private domain traffic of more than 200 WeChat groups (200-300 people) and the promotion of e-commerce platforms to enter the public’s vision. During the period, with the promotion of Xiaohongshu, Douyin and other platforms, he accumulated fans.

In addition to 7or9, Dr. Martens, Timberland, UGG… These new women’s shoe brands have dominated the list in terms of sales performance, and if you look closely, it is not difficult to find that they all have a common characteristic – comfort.

Dr. Martens’ Air Wair sole design is comfortable and durable, Timberland is known as “kicking not rotten”, and UGG can be called “the fashion counterattack of ugly shoes”, capturing the hearts of thousands of girls.

At present, the official flagship store of UGG Taobao has nearly 3 million fans, with prices ranging from a few hundred yuan to thousands of yuan, while the official flagship store of Dr. Martens has 1.64 million fans, and some popular Martin boots are often out of stock. In 2021, UGG and Dr. Martens ranked in the top three women’s shoes on Tmall Double 11 brand list, which can be described as very popular.

UGG shoes, pictured/UGG Tmall flagship store UGG shoes, photo/UGG Tmall flagship store

In fact, comfort women’s shoes are indeed occupying the market step by step. According to retail tracking data from the US market research institute, sales of women’s sneakers in the United States increased by 37% in 2017, and sales of high heels decreased by 11% in the same period. Among them, sales of high heels with a heel height of 7.6 cm and above fell the fastest.

In addition, the awareness of healthy living drives more people to pursue the sports footwear category. According to Euromonitor statistics, the market size of China’s sports footwear industry has reached 183 billion yuan in 2019, close to 58% of the entire sports footwear and clothing market.

According to the “2020-2025 China Women’s Footwear Industry Competition Pattern Analysis and Investment Strategy Consulting Report” published by Huajing Industry Research Institute, the current changes in consumer demand have led to dumbbell growth in the market, with obvious consumption polarization trends, high-end brands and low-end brands growing rapidly, while a large number of intermediate brands have declined significantly.

At the same time, due to the increased awareness of consumer fashion matching, heavy-style affordable women’s shoe brands have developed rapidly in recent years. Many local brands are fiercely competing in the low-end segment, focusing on the fashion and cost-effectiveness dimensions of products.

It can be seen that with the changes in consumers’ aesthetics and needs, only those footwear companies that seize the latest demand can seize the opportunity in time.

How to capture the new generation of young women?

When women’s aesthetics change, high heels gradually fade out of sight. This means that women’s shoe brands want to capture the hearts of young female consumers, not only to have clear marketing ideas, but also to follow the trend and catch up with the changing consumption trends of young women.

So, what kind of shoes can capture the hearts of young women? It can be seen from the popular footwear items in recent years: block heel Chanel, cat and Dior, durable small CK… These women’s shoes are in the direction of comfortable heel dropping.

While new brands seize the trend and strive to develop, old shoe companies are also looking for development opportunities.

Red Dragonfly, a long-established women’s shoe brand, began to try a new marketing and sales model in 2020 to drive sales through live broadcasting. According to Red Dragonfly’s 2020 annual report data, Red Dragonfly’s online channel sales accounted for 30.8% in 2020 from 23.7% in 2019, and online sales increased by 12.68% year-on-year, of which online sales in the second half of the year increased by 73.2% over the first half.

Tianchuang Fashion, the parent company of women’s shoe brand ISSCAT, is also adjusting its business according to market demand, by analyzing customer needs through big data and then creating large-scale intelligent production lines to keep up with changing user needs.

According to the third quarter report of Tianchuang Fashion in 2021, the main business income of the main footwear and apparel sector was 1.268 billion, an increase of 7.92% over the same period of the previous year.

In addition, Qianbaidu, which owns brands such as Qianbaidu, Yipai, Sun Dance, and Miao, has been constantly adjusting its products in recent years to adapt to changes in consumer demand. It is reported that at present, Qianbai will launch 250-300 women’s shoes every quarter, using a variety of styles to meet the diversity of consumer needs.

After the former “shoe king” Belle was privatized, Hillhouse Capital held a total of 56.81% of Belle’s shares and became Belle’s controlling shareholder. In recent years, Belle has also made frequent moves, not only taking a stake in the fashion brand initial, but also controlling the light luxury women’s shoe designer brand 73Hours. It can be seen that Belle is preparing to make a comeback.

Under the changes of the times, the women’s shoe market is changing rapidly, new and old brands are chasing new aesthetic trends, and only by maintaining a keen sense of market changes can we stand at the forefront of fashion.

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