With the advent of winter, consumers' demand for warmth and cold protection has entered an explosive period, and snow boots have begun to sell well. Recently, UGG's parent company, the American outdoor apparel group Deckers Brands (hereinafter referred to as Deckers), released key financial data for the third quarter of fiscal year 2022, showing that UGG's net sales increased by 26.3% year-on-year to US$476.5 million. However, despite the high enthusiasm on the consumer side and the company's good performance, UGG still has many problems to be solved.
Pictures come from the Internet. Pictures and texts are irrelevant.
Sales surge in peak season.
The weather is getting colder and colder. All kinds of snow boots have begun to come into people's sight, and are favored by many consumers for their own fashion and warmth. Jingdong data shows that since November 22, down jackets, woolen sweaters, thermal underwear and other cold-proof clothing have been hot-selling. Among them, the sales volume of the snow boots category represented by UGG increased more than three times month-on-month. In the "Double 11" sales top 10 list of women's shoe brands released by Tmall , UGG ranks second. Many consumers took advantage of the "Double 11" to purchase products, driving the sales of snow boots to continue to rise. A reporter from China Business Daily searched the UGG Tmall official flagship store and found that the monthly sales of many products in the store have exceeded 1,000. Among them, the highest-selling autumn and winter loafers have sold more than 6,000 pairs per month.
Stimulated by the cold weather, UGG sales surged, driving the company's operating performance to continue to rise. Recently, Deckers released its financial report for the third quarter of fiscal year 2022, which showed that the group’s sales of surged 21.3% year-on-year to to US$875 million. Among them, UGG’s net sales increased by 6.3% year-on-year to US$476.5 million.
UGG can achieve such outstanding results, which is inseparable from the brand's heavy investment. In recent years, Deckers has launched various rejuvenation strategies in an attempt to change the inherent impression of UGG's aging image and strengthen the brand's fashion genes. In the Chinese market, UGG not only works hard in terms of brand spokespersons, and has successively joined hands with many well-known artists such as Yang Mi, Zhou Dongyu, Wang Yibo, but also continued to strengthen its fashion attributes through co-branding with SACAI, KITH, BAPE and many emerging designer brands in Shanghai Fashion Week. In terms of promoting product diversification, UGG has expanded product types from snow boots to various categories of products, such as sports shoes, sandals, slippers, clothing, etc.; the user group is no longer limited to women, but has expanded the scope to men and children.
pictures come from the Internet and have nothing to do with pictures and texts.
In terms of expanding omni-channel development, UGG is also constantly exploring new models. In July this year, Deckers announced the appointment of Anne Spangenberg as president of fashion and lifestyle. It is reported that Anne Spangenberg was previously the chief commercial officer of Nike, responsible for the formulation and execution of the brand's global strategy, and has rich relevant experience. After joining, she led UGG and other brands to focus on product diversification and franchise evolution in the omni-channel market. Dave Powers, president and CEO of Deckers, said: "Despite facing the severe macroeconomic situation, Deckers' strong performance in the first half of fiscal year 2023 proves the team's execution ability. As the UGG brand enters the peak sales season, we are confident that we can achieve the group's full-year growth target."
still faces many pressures
It is worth noting that despite the surge in performance, the pressure faced by UGG is not small. The peak sales season for snow boots every year is from October of that year to February of the next year, which means that UGG can become a "hard demand" only after the temperature drops. Zhang Jiajia, who lives in the north, told a reporter from China Business Daily that she only wears UGG snow boots during the coldest times of the year, and has no chance to wear them when the weather is warm. UGG had previously launched plush slippers, and she, who likes to pursue fashion, followed suit and bought them, but after wearing them for a while, she found them to be very impractical. "Although woolen slippers look cute, they freeze your feet in winter and make you sweat when you wear them in summer. Not only do they not stick to your feet but they also shed hair when you walk."
In addition to the popularity of and the short life cycle of , UGG quality problems are also common. On the Black Cat Complaints platform, some consumers said that the men's shoes they bought at the UGG official store had a hole in the toe after only being worn for a month. After reading the product reviews, they discovered that they were not alone, and this happened to many people.After reporting the problem to customer service, they refused to compensate and said that these shoes can only be worn while driving, not walking. On the other hand, the cost-effectiveness of domestic snow boots brands is even more outstanding. Whether it is fashion brands such as Saturday, , red dragonfly, , or lifestyle brands such as Jiaoxia, or footwear brands for the elderly, they have all launched related snow boots products. They are not only cheap, but also have good warmth retention, and some products also have water-repellent uppers.
The picture comes from the Internet. The picture and text have nothing to do with it.
Since the designs of snow boots are similar and the homogeneity problem is serious, the phenomenon of UGG imitation is also very prominent. Some netizens reported on social platforms that the UGG snow boots she bought for 800 yuan on the Dewu App were shipped to Sangpo, Henan, which made her very angry. "I bought it online to save money, but I saw that the place of delivery was Sangpo, which made me doubt the authenticity of the product."
It is reported that Sangpo Village, Mengzhou, Jiaozuo City, Henan Province is the largest production area of snow boots in my country. Here is the world's largest UGG processing factory Longfeng Fur , and 80% of UGG products are produced here. In recent years, Sangpo Village has become the first choice for countless e-commerce, purchasing agents and vendors from all over the country to purchase goods, because Sangpo snow boots are very close to genuine UGG products in terms of raw materials and craftsmanship, and the price is also low. However, in the eyes of netizens, the quality of Sangpo snow boots is not the key. The difficulty in distinguishing the authenticity from the fake ones is the key to the problem. "I don't care whether the quality of Sangpo snow boots is good or not. I just want to ensure that what I buy is genuine." In the midst of the dilemma, the above-mentioned netizen finally chose to return the goods.
Whether it is high imitation or low imitation, according to industry insiders, as long as it is produced by counterfeit brands, it is an infringement, which will damage the brand value of the company, squeeze the market space of honest companies, and allow its development to be detrimental to the entire industry. Regarding the situation of counterfeit goods, Olivier Lorans, vice president and general manager of Deckers Group China, once said that in addition to taking legal measures, UGG can only continue to speed up the research and development of new products so that its opponents cannot keep up with their development speed. But it’s also a challenge for the brand itself.
(China Business Daily reporter Jia Xinran)
