Achieving growth against the trend amid internal and external troubles: Bosideng "renews the old brand"

The times are developing rapidly, and traditional brands must adopt new competitive strategies to survive in the complex market. In this article, the author makes a comprehensive analysis of the "new look" phenomenon of Bosideng, a well-established down jacket brand, and explains in detail Bosideng's application of business methodology, which can inspire those who are interested in brand operation.

Isn’t Bosideng a brand that only parents wear? Why are people born after 1995 also wearing it? Am I out of date?

I was a little confused when I saw this phenomenon, so I checked the data and found that Bosideng Group's revenue has been growing in the past five years. The interim report for fiscal year 2024 showed that the revenue was 7.471 billion, a year-on-year increase of 20%.

In this environment, it is very interesting that such an old brand can still maintain continuous growth. I have to study it.

The topic is called: New look for traditional brands.

This is a typical and representative business management problem. I have communicated with many bosses in traditional industries before, and they all have to face the problem of "renewing their appearance".

Because the changes are too fast.

The economic and policy environment is changing, consumer demands and mindsets are changing, production costs and sales channels are changing. We must respond better in order to survive, which is not easy.

I hope my sharing can be of some inspiration to bosses.

So, how did Bosideng achieve the “new look for an old brand”?

After interviewing many professionals and bosses from upstream and downstream of the industry and doing some analysis and research, I have some opinions of my own that I would like to share with you.

1. What are the characteristics of the domestic down jacket market?

1. Market size continues to grow

Did you not expect that the down jacket market has a scale of hundreds of billions? It has been growing continuously since 2018, with the growth rate remaining at around 10%, which is higher than GDP.

And there is still a lot of room for growth. Compared with Japan's 70% down jacket penetration rate, China's is only 9%.

Of course, there are many reasons for the overall market growth, such as the increase in raw material and labor costs, which has led to an increase in the overall price of down jackets, which I will not elaborate on here.

2. Three types of players have their own advantages

There are three types of players in the down jacket market: 1) Sports and outdoor, such as Adidas, Nike, and Descente; 2) Mass fashion, such as Uniqlo and ZARA; 3) Professional down jackets, such as Bosideng, YaYa, and Yalu.

There is also a special category, which are high-end foreign brands, such as Moncler and Canada Goose.

These categories have different positioning.

Bosideng and Moncler are professional brands that only sell in winter. Mass fashion and sports and outdoor products are sold all year round, and down jackets are only sold in one season.

Everyone has their own advantages and occupies their own territory.

3. Bosideng's market share has always been No.1

It’s about 10%.

Moreover, the market concentration of the down jacket industry is relatively high, with the top ten companies accounting for 43.62% of the market share.

2. What difficulties did Bosideng face?

Before the sustained growth in recent years, Bosideng encountered many difficulties and experienced ups and downs.

To sum up briefly, there are several issues:

1. The brand is aging and is increasingly alienated from the mainstream young groups of the times.

2. Fierce competition, both internally and externally. Domestically, fashion and sports outdoor brands are on the rise, while overseas, Canada Goose and Moncler are entering China.

3. The brand structure is single, and the four-season strategy is still in progress. Currently, 70% of the revenue is contributed by the sub-brand Bosideng, and only in winter.

3. How to achieve a “new look for an old brand”

In other words, how did Bosideng solve the above problems? Let me analyze it below.

It should be noted that I collected information through interviews and surveys, and then used my existing knowledge and experience system to provide a post-interpretation of Bosideng's business operations.

1. What is business methodology?

The core is to formulate differentiated competitive strategies.

The implementation of competitive strategies is achieved through four elements: people, channels, scenarios, and innovation.

This methodology is what I have summarized in practice. It has been implemented in the business consulting of many companies and is very useful and has been proven time and time again!

2. Application of business methodology in Bosideng

Use the above methodology to interpret Bosideng’s business logic.

1) Competitive strategy: How to achieve differentiation is the key

In terms of price, there is a serious polarization. The expensive ones are several thousand yuan, while the cheap ones are only one or two hundred yuan. The expensive ones are represented by Canada Goose and Moncler, whose average unit price is over ten thousand yuan, while the cheap ones are low-end product lines with an average unit price of a few hundred yuan.

For Bosideng, the top market is too small to support such a big brand, while the low-end market is too crowded and oversaturated.

The first conclusion is that there is room for the mid-to-high-end price segment and the competition is not fierce.

From a functional perspective, users still have demands for "professionalism and quality", which is something that Uniqlo, Nike and Adidas cannot handle. For Bosideng, this is precisely its advantage.

The second conclusion is that the positioning of professional down jackets is what users need and we have our own advantages.

Based on the above conclusions, we come up with a competitive strategy: to make mid-to-high-end professional down jackets.

To implement the strategy, we need to select the "group of people" who have demand for professional down jackets and can accept mid- to high-end prices, find the best "channel" to reach this group of people, and design "innovative" ways to promote sales.

2) Target group: Young consumers in first- and second-tier cities

The characteristics of this group are that they have a demand for professional down jackets and can accept mid-to-high-end prices.

More importantly, it is their absence that has caused Bosideng's brand aging. Doing well with this group can solve this problem and the brand will have a future.

Young consumers have relatively high functional requirements for down jackets , so Bosideng launched higher-quality "Extreme Cold" and "High-end Outdoor" series, with significant improvements in fabrics, craftsmanship, filling materials, product form, etc.

In addition, the styles also have more trendy designs that are more in line with the aesthetics of young people.

After this series of combined punches, the effect is significant.

Founder Gao Dekang said in an interview that nearly 70% of Bosideng's consumers in first-tier and new first-tier cities are under 40 years old.

3) Channels: Determined to develop online channels such as Douyin and Tmall

Online channels such as TikTok and Tmall correspond to young consumer groups in first- and second-tier cities and are the shopping platforms they are accustomed to using.

It is certainly not easy to do well, but as long as you are determined and willing to invest resources, the results will not be too bad.

The most common situation is that people want to do something but are unwilling to invest, do not want to find professionals, do not adjust the organizational structure, and do not give enough time. These are all manifestations of a lack of determination, and will definitely not be done well.

Use a set of numbers to feel Bosideng's determination:

Bosideng’s official Douyin account has 5.85 million followers and 73 brand-owned accounts. It has produced 8,223 videos and 51,000 live broadcasts promoting products throughout the year, including more than 6,000 live broadcasts in December last year.

Judging from the results, Bosideng's sales volume ranks first in this category on Douyin, Tmall, and Video Account.

In addition, offline and online are a chess game.

In building its offline channels, Bosideng focuses on first- and second-tier cities, adopting the strategy of opening large stores and closing small stores. It shut down small stores with low floor efficiency, set up flagship stores in business districts in first-tier cities such as Beijing and Shanghai, and hired well-known designers to upgrade the store image to create a high-end image.

This move is also consistent with the strategy of focusing on young people in first- and second-tier cities, and is a systematic approach that focuses on volume through online channels while ensuring brand and experience offline.

4) Innovation: In terms of gameplay, use young people’s methods to attract young people

Bosideng has tried new methods such as holding fashion shows, signing brand spokespersons, and IP collaborations.

Yi Yang Qianxi, Yang Zi and Gu Ailing were invited to be the brand spokespersons, and their photos wearing popular down jackets can be seen in shopping malls and other places.

It has published co-branded products with well-known designers and has appeared at international fashion weeks in Milan and New York.

Pop-up stores have also been launched in cities such as Beijing, Shanghai, and Chengdu to promote styles with seasonal characteristics and to promote the brand.

The above is the application of business methodology in Bosideng.

From the formulation of competitive strategies to the implementation of populations, channels, and innovations, the business logic is systematically interpreted.

Of course, it should be noted that this is a post-interpretation after all, so the feeling is too good, smooth and impeccable. In fact, this is not the case, and it is not my original intention.

Bosideng still has several key issues that have not been resolved:

1. A four-season, multi-brand strategy is very necessary, otherwise the entire group can only rely on Bosideng, a sub-brand, for one season a year.

2. Although the company has transformed its business to target young consumers in first- and second-tier cities, nearly 70% of its sales revenue comes from offline channels in third- and fourth-tier cities. This structural adjustment still has a long way to go.

3. Faced with the continued rise in raw material and labor costs, as well as the general environment of consumption downgrade, profit margins will definitely be squeezed in the long run.

That’s all for this analysis. In short, I hope that domestic products will get better and better, and I hope this article will be inspiring to you.

Author: Han Xu

Source: WeChat public account "HanXu (ID: kenengyouxihanxu)"