In 2023, sports consumption ushered in booming development and became a new bright spot in the consumer market. In this context, the demand for sports shoes and clothing is growing steadily, and the market size continues to expand. According to data from Ai Media Consulting, the size of China's sports shoes and clothing market has jumped to 492.6 billion yuan in 2023.

At the same time, it can be seen that some domestic sports brands are speeding up. Among them, the 361° performance is more and more impressive.

According to the announcement, 361° achieved revenue of 8.423 billion yuan (RMB, same below) for the full year of 2023, up 21.0% year on year; gross profit of 3.462 billion yuan, up 22.7% year on year; and net profit of 961 million yuan, up 28.7% year on year. Compared to the same period last year, there was an increase in revenue and profit indicators of 361°.

Among them, revenue from 361° core categories of footwear and clothing products increased by 23.0% and 9.8% year on year, respectively; income of 361° children increased 35.7% year on year.

What is worth thinking about is what signals are reflected behind this phenomenon? Why is 361° out of the lap?

The author believes that from the source analysis, the booming development of sports consumption is based on changes, and the 361° strategic strength is also the key, bringing more growth vitality.

A “strategic window period” is gradually being formed to enable performance growth

For 361°, this change is certainly positive. It forms a unique “strategic window period”, that is, a period where the opportunities provided by the market are particularly in line with the strategies formulated by the enterprise, so that 361° faces opportunities for accelerated growth.

Specifically, the changes are mainly reflected in several aspects:

First, there is a change in the driving force behind the recovery of consumption.

In 2023, the overall consumer market recovered weakly, and clothing and other categories took the lead. As can be seen, retail sales of clothing, shoes, hats, and knitwear increased by 12.9% year-on-year, which is clearly better than the overall level of social zero.

At the same time, compared to the past, this round of consumption recovery is based on a more solid foundation, and rational consumption and quality-price ratio consumption are the core driving forces. According to the “2023 White Paper on Chinese Consumer Insights and Market Outlook”, in the consumer perception survey, 41% of respondents chose “I buy everything I really need” and 36% chose “I am happy to find the most cost-effective brands and products.”

Second, the “popularity” of national sports has reached a new level.

In 2023, sporting events exploded. Major events such as the Asian Games and Universiade were successfully held, marathons were blooming everywhere, and the village BA events were also very lively; compounded by the continuous improvement of public health awareness, the social atmosphere of national sports became stronger. Also, it is worth noting that the public's attitude towards the event changed from watching to participating; the participants' mentality changed from “watching stars” to “I want to be a star,” the enthusiasm for popular sports consumption was unleashed at an accelerated pace, and demand for professional sports equipment grew.

According to population groups, women and young people are beginning to participate more in sports, driving consumption growth in vertical segments.

Third, the trend of sports consumption is prominent.

Driven by policy guidance, pop culture, etc., trend sports continue to be popular, and “trendy sports” equipment continues to be popular, and segments such as skateboarding and skiing are growing strongly. Furthermore, as women and young people become the main consumers of sports, demand for more products with integrated functions and trends, as well as demand for a younger and trendy brand experience; young consumers are still passionate about Guochao. According to the Dewu App data, the post-95 and post-00s consumers accounted for 82.6% of Guochao's domestic product consumption in 2023.

In summary, it is easy to see that in 2023, consumer demand for sports shoes and clothing is likely to be more diverse. In particular, they pursue high quality and price ratio, and quality also covers professional and trendy characteristics. At the same time, various vertical segments such as women, children, and fashion sports have become the key for brands to seize growth.

This kind of market requirement has undoubtedly raised the competitive threshold, and also further tested the brand's comprehensive ability, forward-looking strategy, and whether the strategy is accurate and clear.

The strategy formulated by 361° has multiple matches: including quality-price ratio consumption matching with its brand positioning (specialization, rejuvenation, internationalization) and pricing; matching the growing demand for professional sports equipment and “trendy sports” equipment with its dual-driving strategy (professional+trend), and matching national sports with the omni-channel strategy (long-term deep cultivation of the sinking market, integrated online and offline development). At the same time, 361° has a layout in many of the vertical segments mentioned above.

As a result, the 361° accumulated strategic potential ushered in a better time to release, strengthening its growth logic.

The “three-sided” layout promotes another increase in strategic potential

Focusing on 2023, 361° reinvigorates its strategy, further lengthens the “long board” through a systematic layout from point to surface, and stimulates the vitality of performance growth. Specifically, discussions will be conducted on the three aspects of professional-driven, trend-driven, and omni-channel development.

1. Multiple “specialties” drive the brand upward

The full name of Professional Drive is “Professional Sports Drive Brand”. Behind this, it has many points of focus, such as product-level professional categories and technology, brand-level professional resources, etc.

Looking at the professional category line, in 2023, 361° will continue to expand the layout of categories such as basketball and running, and reaped great results.

In terms of basketball, brand ambassador Alan Gordon wore 361° professional products to help him win the NBA championship, driving the popularity of various basketball shoes such as “Zen 5.” At the same time, 361° promoted brand activities such as “Xiang Dongran Alan Gordon Championship China Tour” and “Xiang Dongran Spencer Dinwiddie's Trip to China”; newly signed international basketball superstar Nicola Jokic as global brand ambassador, Hangzhou Asian Games champion Li Yuan as women's basketball spokesperson, etc., to accelerate brand influence and broaden the user circle with scarce and professional brand resources.

In addition, 361° appointed famous basketball player Lu Xiaoming as the head coach of junior basketball, extending the basketball layout to the youth stage and further seizing growth opportunities in the vertical segment.

In terms of running, 361° comprehensively promoted the upgrading of the running product matrix, released major new products such as Feibiao Future, and signed Li Zi as brand ambassadors, Guan Yu Sheng and Li Bo as running ambassadors, showcasing professional product strength with the excellent results of professional runners and driving public focus. As a result, Feifinan 3 was not sold first. In November, Feiran 3 made its first public appearance, helping brand ambassador Li Zicheng win the 2023 Yiwu Half Marathon domestic men's championship.

Looking at the wearing rate of running shoes, at the 2023 Berlin Marathon, 361° professional racing running shoes ranked first in the wearing rate of domestic brands, achieving the strongest increase in the Grand Slam race; at the China Marathon-Beijing Marathon, the wearing rate of 361° runners who broke three soared to second among domestic brands.

This type of representative marathon event can often reflect changes in the running shoe market pattern. It can be seen that 361°'s competitiveness in the running field has greatly improved.

Furthermore, professional sports event resources have empowered the 361° brand.

On the one hand, with the successful hosting of the 2023 Hangzhou Asian Games, 361° gained more brand exposure than expected, continued to strengthen the brand's professional attributes, and expand its brand influence in domestic and foreign markets. In terms of specific strategies, 361° also further “binds” Asian Games IP by showing the public official sports uniforms for the Asian Games and opening Asian Games flagship stores, etc., to accelerate consumers' mentality.

On the other hand, 361° amplifies the brand's voice in multiple circles through extensive in-house IP competitions, stimulates enthusiasm for popular sports, and accelerates the process of brand specialization. Take the grassroots basketball tournament IP “Touch the Ground and Fire” as an example. “Touch the Ground and Fire” was launched in the fourth season of 2023. It gradually sank into prefecture-level cities, linked with the “Village BA”, and specially set up junior events to push the scale of the tournament to a record high; brand ambassadors Alan Gordon and Spencer Dinwiddie appeared at the tournament to inspire more grassroots players to pursue their basketball dreams.

2. Trendy innovation injects youthful vitality

Looking at “sports trends drive business”, 361° attaches importance to the needs of young consumers, strengthens links with them through diverse and innovative forms, and establishes a younger brand perception, thus driving business growth.

Specifically, for example, 361° pioneered a trendy sports circuit, teamed up with the Dewu App to launch a limited gift box for skateboard shoes, and simultaneously launched the first skateboard shoe, the 361° SKATE UP series “Tengyun” skateboard shoes, co-created with skateboard champion Gao Qunxiang; and launched the Trajectory 5.0 series with global brand spokesperson Gong Jun to explore the trend trajectory together; and co-created the “Heng” new product launch and appeared at Shenzhen Fashion Week to design with a more oriental aesthetic style Talk to young consumers.

Furthermore, 361° once again crossed the metaverse and collaborated with the top NFT IP Bored Ape to innovate and launch the “Boring Hostess” to continue to enrich the brand's youthful expression through emotional marketing methods in diverse scenarios.

3. Strengthen omni-channel matching development needs

In terms of channels, 361° has further improved the number and quality of stores, continued to expand e-commerce channels, strengthen the integrated development of online and offline channels, better match the above dual-drive strategy, and also meet the needs of consumers for multi-channel consumption.

Specifically, on the offline side, the 361° main brand had a net increase of 254 stores over the same period last year, and the total number of domestic stores reached 5,734; 361° children had a net year-on-year increase of 257 stores; in terms of channel structure, the share of supermarket department stores continued to increase, and the share of 9th generation stores increased rapidly, and store quality and efficiency were optimized simultaneously.

On the online side, 361° implements an online exclusive product strategy, combines different consumption scenarios to create differentiated explosions, and actively grasps e-commerce promotions such as Double 11, strengthening the digital upgrading of brands and comprehensively boosting the explosion of online sales. In 2023, 361°'s revenue from e-commerce business increased 38.0% year-on-year to 2,326 billion yuan, accounting for 27.6% of the Group's total revenue.

Combining the above three aspects, 361° strategically achieves overall upgrading, and savings form stronger strategic potential.

Epilogue

Looking at it, the 361° performance this time was no accident; it was the result of a reshaping of the growth logic.

More importantly, the reshaping of its growth logic may work in the medium to long term, laying a solid foundation for performance in 2024 and beyond.

At the same time, looking ahead to 2024, ideas such as ideal consumption are expected to continue to prevail, and the national sports boom is also expected to remain high. In this context, the 361° “strategic window period” has been extended, compounded by the continued strengthening of its strategic potential, which once again unleashed positive expectations.

It can be said that 361° seems to have reached a stage of full upward development, and has a competitive advantage in terms of performance flexibility in the industry.

The 361 degree capital market imagination was further stimulated by this. In fact, the capital market has taken action to cast a vote of confidence. Since 2024, the 361° stock price has risen by nearly 28%, making it the most outstanding performer among the leading companies in the domestic goods movement.