Response to the trapped export, fitness equipment industry is now in “shuffle”
The sharp decrease of the price of domestic steel does not make fitness equipment companies that use steel as the main raw materials relaxed. “Currently the export in fitness market is generally influenced by the economic crisis, while low value-added products have been more impacted as for the low thresholds and fierce competition,” said LIU Wei, General Manager of the Brand Marketing Department of the Impulse Group whose export sales accounted for about half of the output value.
To the interview, ZHONG Donghua, Oversea Marketing Manager of Relax, another fitness equipment enterprise in Shandong, chose his word cautiously. He said, “There is certain influence, but for specifications, our company has not got the detailed data,” and Incalcu, another related exporting company in Shandong, politely refused this interview. Even though JI Baicheng, Vice President of Good Family, expressed that his company basically was not affected by the crisis as equipment manufacturing just accounted for a very little part of the company’s business, it is not difficult to see that China’s fitness equipment industry mainly exported to European and American countries is now facing with “exporting pain”.
The brand enterprises are trapped with the financial crisis, let alone those OEMs without brands. Take Xiamen Cowell, the OEM of American AK sports for example. The scale of Cowell ranks only second to Taiwan Johnson with its output accounted for 10% share of the global market, and in 2007 its export value reached 100 million US dollars. However, it is exact this super OEM enterprise is said in “bankruptcy”. Although LI Jianyu, Deputy General Manager of Cowell denied this rumor last week, he still committed, “This crisis may last longer time, and Cowell will adopt conservative approach to strengthen inner management, enhance output control, cut down production cycle, make less use of the working capital, and try our best to avoid overstocked products.”
Facing with this crisis, what can fitness equipment companies do? LIU Wei of Impulse considered that they should create their own brand to improve the added value of the products, “For our exported products, own-brand and OEM products are evenly split. In fact, the former ones with high added value were less impacted. ”
Happened to coincide with LIU Wei on this point, a leader of Xiamen Cowell realised the brand effect in defense of the financial crisis as well, and he said, “Brand is very important for manufacturing industry.
Manufacturing and OEM will make manufacturers laborious in the future”. ZHUO Deqin, shareholder of Cowell said that in the future Cowell will first purchase several overseas fitness equipment manufacturers to take advantage of their brands and channels for overseas sales, then establish its own brand to explore the domestic market. It is the strategic choice for Xiamen Cowell to transform from OEM to OBM for response to the economic crisis, which might be able to bring a new revelation for the over 500 large and small manufacturers specialized in fitness device without brands in the domestic.
However, what the crisis brings for fitness equipment industry is far more than the conceptual change. Impulse predicts that some companies whose products are of low added value without brands might be knocked out from the market. As these companies are lack of brand support, it is hard for them to establish marketing channels in a short period for exploration of domestic markets, “This crisis might impel the market to reshuffle, which is not a bad thing but a chance for the future development of the whole fitness industry.”