Property

Hosa Shi Hongliu

Hosa Shi HongliuMainland’s retail market recorded a production value of approximately RMB15.7 trillion in 2010 while the urban household in Mainland had a disposable income of RMB19,109 in the very same year. HOSA INT’L (02200), which specializes in operating indoor sportswear business in Mainland China, was very much benefited by the above backdrop. Shi Hongliu, chairman of the board of directors at Hosa International, said when he was interviewed by our website that Hosa is one of the leading sportswear brands in Mainland China. The group adopts a unique “event marketing strategy”, which differs significantly from the traditional marketing strategies used by its rivals of the same industry.

Hosa International was founded by the two brothers Shi Hongliu and Shi Hongyan in the 1980s. The group has always been managed as a family business and has been expanding as time went by. For decades, it has been mainly engaging in the design and sales of various categories of indoor sportswear like swimsuit, yoga outfits and sports underwear as well as relevant accessories. Shi Hongliu admitted Hosa does not have a large scale compared with traditional sports goods corporations in Mainland. Nevertheless, Hosa delivers a firm and clear brand concept to the public – Hosa focuses on offering swimsuit and yoga outfits to medium to high-end market and is the biggest indoor sportswear brand in China. Hosa does not have any extraordinary strong competitors at all in the fields of swimsuit and yoga outfits; it only confronts weaker rivals in certain cities or at certain store locations. One of the ways Hosa uses to advertise the Hosa brand is to set up shops. Besides, Hosa opts to select marketing strategies with high cost effectiveness instead of mobilizing capital directly to promote its brand name, which is what other apparel brands, small to large, would do.

First of all, Hosa sells its products at department stores located at Mainland’s first-tier cities by means of consignment. Second, Hosa emphasizes brand awareness and brand image more than sales volume in the very beginning, unlike the general practice of its peers, who prefer focusing on increasing sales volume first. Third, Hosa has relatively low advertising costs, which account for merely 2-3% of total costs. This is because the management choose to promote the brand indirectly through providing large-scale sponsorship to Mainland’s beauty contests or international model competitions, a marketing practice that achieves encouraging results. Shi revealed that Hosa only needs to provide sportswear as sponsored products and needs not use money to promote its brand name, saying it is one of the characteristics of the group’s marketing strategies. This kind of sponsorship could raise the grade of the event and the brand as well, he stated. On the other hand, Hosa also provides large-scale sponsorship to the national sports committee for holding various kinds of competitions, including aerobics and fitness contests. Although these would incur certain cost expenditure, the group would gain more than it has to give, he said. Fourth, Hosa offers outfits sponsorship to fitness coaches as it becomes more prevalent for Mainland people to visit gymnasiums. These fitness coaches act as models for the group’s fitness apparel in a way and can directly promote the Hosa brand inside gymnasiums.

Data discloses that Hosa stands out in Mainland’s swimsuit market with market share of 6.1%. The group is followed by Arena, Zoke, Speedo and Heatwave, which take up market share of 2.6%, 2.4%, 2.3% and 1.6% respectively. Shi indicated that Hosa is extremely flexible in response to changes in market situation. For instance, the group can set up a swimsuit store, a sports underwear ship or even a fitness and yoga clothing store. Hosa has already established a solid foothold in the Mainland market long ago as its brand opens up thousands of possibilities. Swimsuit has broken the chains fastened by cooler seasons as many buildings in Mainland’s first-tier cities have now installed indoor swimming pools. Therefore, seasonal factors do no exist in these cities. Normally, June, July and August is the peak season for the group’s swimsuit sales, which would slightly go down when autumn and winter come. During the peak season, swimsuit contributes 60% of total income to the group while it contributes 40% during autumn and winter, he said.

Shi stressed that Hosa is not going to beat its rivals by sales volume. The group has to be well-positioned and produce high-quality goods if it aims to record a high gross profit. It pays close attention to product functionalities and fashion. He said the group mainly depends on the regular feedback from coaches in designing and strengthening product functionalities, trying to make more professional products through regular technology improvement. Fashion is an added value of a product, he expressed, saying the brand’s product design must be coherent with fashion. The idea of following the market trend explains why the group becomes a listed company. He said a listed status enables Hosa to become internationalized and raise brand awareness. A successful listing can also be taken as laying a foundation stone for development of markets beyond borders of Mainland China and will only bring benefits to the group, according to Shi.