The Rising Price Of The Sports Apparel Industry Is A Disaster Of Cost.

After the price increase, the average selling price of XTEP footwear products was 85.7 yuan, the average selling price of clothing products was 52.5 yuan, the sales volume of footwear products and clothing products increased to 9 million 500 thousand pairs and 20 million pieces respectively, which was double affected by the increase of sales volume and the increase of selling price. XTEP's overall revenue increased 22% to 2 billion yuan in the first half year, and the gross profit margin increased 2.1 percentage points to 40.7%, and the profit margin increased by 2.4 percentage points to 22.2%.

Anta and Lining have also raised the wholesale price of their products.

According to the financial report, the average selling price of Anta footwear increased by 2% to 96.9 yuan in the first half of this year, and the price of clothing products increased by 7.1% to RMB 49.6 yuan.

In June this year, Li Ning Co announced that the average retail price of footwear products increased by 7.8% in the fourth quarter of this year, and the retail price of clothing products increased by 17.9%.

According to analyst Chen Shixin, the main reason for increasing prices of sporting goods companies is the increase in labor and raw material costs in the first half of this year.

According to XTEP semi annual report, staff costs increased from 81 million 318 thousand yuan in the same period last year to 95 million 345 thousand yuan, an increase of 17.2% over the same period last year. The cost of raw material sales was 537 million yuan, an increase of 18.7% over the same period last year.

According to the insiders, in addition to the increased cost of manpower and raw materials, XTEP and Anta increased their spending on publicity and promotion in the first half of the year.

For Anta, its production is made up of two parts, namely, self production and subcontracting to other enterprises. In terms of self production, Anta's raw material expenditure in the first half of this year was 287 million 200 thousand yuan, an increase of 51.6% over the same period last year, and the direct wage expenditure was 144 million 900 thousand yuan, an increase of 20.6% over the same period last year.

But not all sporting goods companies raise their prices because of increased costs.

Earlier, Li Ning Co stakeholders told the first financial daily that the price increase was mainly aimed at enhancing brand positioning and narrowing the distance between pnational sports brands.

Chen Shixin introduced that there are two major strategies for the promotion of sports brands in China. One is to occupy the commanding heights of China's sports marketing resources, such as becoming a partner of the Chinese Olympic Committee, providing champion equipment to large international games, signing sports stars and national sports teams, etc. Two, with an influential media platform (such as CCTV-5) as the communication center, and advertising with provincial TV, local comprehensive channels, portals and outdoor advertising planes.

Taking Anta as an example, the proportion of advertising and publicity expenses in the first half of this year accounted for 12% of business revenue, an increase of 0.8% compared with the same period last year. The advertising and publicity expenses increased from 315 million 500 thousand yuan in the first half of 2009 to 414 million 400 thousand yuan, an increase of nearly 100 million yuan.

XTEP advertising and publicity expenses increased from 193 million 900 thousand yuan in the first half of 2009 to 239 million 100 thousand yuan in the first half of this year, although the proportion of advertising and publicity expenses in operating income increased by 0.1 percentage points to 11.7% compared with that of the first half of the year, while the amount increased by 45 million 200 thousand yuan.

Chen Shixin said that Lining, Anta and XTEP's rising price comes from many years of operation. It has become a strong brand in the market, and its products sell well, and then raise the price. It is also a manifestation of the premium of brand value.