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Pou Sheng moves into experiential retailing

Hong Kong-listed footwear manufacturer and retailer Pou Sheng International is embracing storytelling and experiential features in its stores to stave off the impact of online shopping.

As at June 30, Pou Sheng operated a network of 5464 directly operated stores and 3036 sub-distributor stores predominantly on the mainland.

“While the group has been maintaining its position as the leading distributor of footwear and apparel for international brands… it has also been starting to improve and enhance its offline and online operations by converting its current operations to being more adaptive to the PRC’s new retailing environment, which are more experiencing and storytelling oriented, bigger format stores expansions and more frequent seasonal promotion activities by events and products,” the company said in its half-year earnings statement.

Pou Sheng develops, markets and retails footwear brands including Geox, Levi’s, Rockport, Carters and Pony in the PRC.

The company say that while the GDP of China grew 6.5 per cent during the first half of 2017 and retail spending grew by double digits, the high growth of sports spending was consumed by more diverse channels and sophisticated channels which challenged the group’s traditional marketing and sales approaches.

“The sports retailing environment in the PRC continued to be highly competitive and fragmented, with international brands competing against upcoming domestic brands. Consumers are seeking unique shopping experiences and opportunities to rigorously try out each product’s features and comforts in-store. Thus, in order to manage this rapid shift in consumer appetite and preferences, continuous investment is required to develop and upgrade existing branding, store formats and digital channels, which help driving in-store traffic and reinforcing the consumers’ experiences.”

Pou Sheng has reported revenue of RMB9.5 billion, an increase of 14.5 per cent compared with the corresponding period of last year. Gross profit was RMB3.29 billion, up 11.3 per cent, but profit attributable to owners of the company was RMB298.6 million, a decrease of 19.6 per cent.

However, the group’s management is confident about the mid- to long-term prospects for the health and leisure retail industry in the Greater China region, as the PRC policy makers steer the economy away from manufacturing and exports towards services and domestic consumption.

“As consumers become more health conscious, they are likely to spend more on personal health and well-being. As global athletic, performance and leisure brands allocate more resources to capture market share in the PRC, the group will further develop its omni-channels and capabilities to guide these brands in handling the complexity, variation and diversity of sports retailing across the PRC marketplace.”

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