PEAK'S Adventures In America

In the past three years, PEAK's long-awaited plan to open shop in the United States has finally come to fruition.

In February 14th,

U.S.A

But internationalization is more like a long drawn out adventure. Even if we are prepared, many challenges and setbacks will always happen.

PEAK's opening time in the United States is not long after all. At present, it is not successful. But in the United States for three years, PEAK has accumulated rich experience: what are the prerequisites for setting up shop in the United States? What are the differences between the rules of the game in the US market and China? In the process of internationalization, is the overall plan, step by step, or step by step? The answer lies not only in strategy but also in details.

I hope these experiences can be used for reference by many enterprises that are going to or are developing internationally.

1 risk of location selection: a shortcut

The characteristics of the US market are step-by-step and there is no shortcut. Chinese enterprises must pay attention to this point when planning.

From the beginning of 2009, it was ready to open shop by the end of 2011, and PEAK spent nearly three years.

"The first thing to solve is to know where your market is and what path to enter. If these problems can not be answered by enterprises, the market development must be very passive."

Su Jia, general manager of PEAK US branch, stressed.

PEAK's answer to the above questions is to enter the mainstream market of the United States. Based on this positioning, PEAK actually has two choices in the United States, one is New York and the other is Losangeles, the two regions are the two largest cities in the United States with the highest population density.

Finally, the choice of Losangeles, which is slightly inferior in population density and the abandonment of New York, is a comprehensive consideration without deviating from the "great principles".

One of the principles that must be considered is cost.

In the west, Losangeles has more advantages than New York in terms of pportation, rent, labor and so on.

Although there is no accurate data calculation, Su Jia said that New York would be 1/3 higher than Losangeles only if the manpower expenditure was roughly calculated.

Another reason for choosing Losangeles is based on the "proximity principle". The famous international sports brand Nike and Adidas headquarters are located on the west coast of the United States. There are many schools that train such professional talents in these areas. Moreover, as the most fashionable city, Losangeles has the strongest flavor. These two aspects have great attraction for PEAK who wants to establish R & D teams in the US.

Therefore, PEAK has opened two stores in Losangeles, but the location is subdivided.

The basketball concept store opened in December 16th last year was close to the home of the Lakers and Clippers. The area not only had a large basketball crowd but also had relatively high income, while the store on Hollywood Boulevard in February was a comprehensive flagship store.

There is no difference between the strategy of accurate location of the storefront by the consumer group and the domestic market, but the details are the key to success or failure.

One of the big differences is the behavior difference between Chinese and American consumers. "Unlike the former's habit of buying aimlessly and shopping at random, the latter purposefully purchases more, so there are few walking streets in the US, and stores should be open to vehicles where they can easily be noted."

He said.

Having grasped these principles, it seems that it is not difficult to set up shop in the United States.

Su Jia introduced that location, recruitment, sales and other aspects were similar to those in China, and even the approval process and entry threshold were lower than in China.

"All information is publicly available on the Internet, as long as the required documents are prepared, scanned and pmitted in the past, and even need not be processed face to face."

But the process is far more difficult than imagined.

"Doing things in the United States is not as fast as China.

In the United States, there is a solution to every task, with prescribed procedures and procedures.

What impressed me most was the experience of opening the shop for the first time. It took us only 6 weeks to complete in 3 weeks.

The first is contract negotiation. In China, the concept of "making money hand in hand" can be finalized in 1~2 hours. In the United States, this time is much longer. First, there are many rounds of negotiations on the needs of the two sides, usually through mail. Meanwhile, both lawyers will participate in the whole negotiation process. After the intention is clear, the other side will perform due diligence on the company's credit situation.

"PEAK's parent company in China, the credit record in the US is blank (only in the US is blank), so the other side will spend a lot of time and energy to investigate."

Secondly, it takes a longer time to decorate the process. It must be examined in stages, and all of them can be delivered.

"These processes must be strictly carried out according to the schedule, and they should not skip any step. Enterprises should try to make all relevant preparations before the contract, for example, if they want to shop decoration, the relevant design work should be pre positioned to improve efficiency."

But this effect is limited, and more importantly, Chinese enterprises in the United States must understand these rules and strict process cycle, and arrange business activities in order to avoid affecting business planning.

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2 risk of legal environment: good use of external and internal coordination

With professionals going deep into the local market, they can't rely entirely on them or even superstition.

PEAK, which hopes to enter the mainstream market of the United States, is an unavoidable problem.

As early as in 1992, when PEAK was exhibiting in Las Vegas, it was blocked out of the exhibition because of trademark similarity (such as PAKE, PEAKS, etc.). That is, from that time, PEAK embarked on the "long road" of trademark registration in the United States.

"Trademark is the necessary weapon for enterprises to go out, especially if the intellectual property rights protection is very harsh in the US market, if there are problems in this area, it will bring unimaginable catastrophic consequences."

"The habit of the US market is not to pursue you at the beginning, but to go back to a certain extent when the enterprise and product develop to a certain extent," said Su.

At present, PEAK has obtained 450 registration certificates in more than 160 countries and regions, but the US trademark is undoubtedly one of the most tortuous experiences.

Xu Jingnan, chairman of PEAK group, described the process as "repeated appeals and dismissal" in an interview.

PEAK used to trade trademark in the United States for 15 years, mainly with similar names or similar logo images, and various kinds of prosecutions dismissed all kinds of recharges.

"PEAK is such a name in the United States is very obvious, we also tried to think of some ways, such as fill in a letter, change the pattern, but from the point of view of brand maintenance, these are not very good choice."

He said.

With the help of the "professional team", PEAK commissioned a Native American lawyer to find the Madrid Agreement to defend PEAK. The latter pointed out that "for a company from a country joining the agreement, if there is evidence that the company's trademark is well known, it can be protected."

This evidence is obvious for PEAK, which is developing rapidly in China and other international markets.

This also allowed millet to have a further understanding of the US market. "In a country with a very strong division of labor in the United States, enterprises should make good use of professional resources, which means finding a guide to" go through the customs "and the so-called" American shortcut ".

But for China's localized enterprises, especially private enterprises, the role of "professionals" is often ignored. In the past, there are more than ten years of experience in the operation of the company, Su Jia, who said that many Chinese private enterprises "build up a legal department, hoping to solve all the problems." but in the United States, this is not the case. In general, the legal departments or legal advisers of American companies are responsible for helping companies find a more professional team of lawyers, and PEAK's American branch, which has experienced "trademark storm", has left most of its legal affairs to local professional teams.

But at the same time, professionals should not be totally dependent or even superstitious.

When PEAK entered the US market, it met with such a choice. Is it to the professional consulting firm who knows the market well enough to do the investigation, or do it personally?

"After many communication with some international consulting companies, we find that they are considering the issue from the perspective of Americans watching the US market, and PEAK is planning on the US market from the perspective of Chinese enterprises. These two perspectives are very different."

She explained.

For example, as an enterprise that has just entered and has not gone deep into the American market, the first step of PEAK is to solve some basic problems, such as how to set up the company first, then use it as a position, and gradually expand its penetration into the market. For this stage of the enterprise, the survey report given by the consulting company is often too advanced and too ambitious, "they have to put forward a long-term solution from the beginning, but this is often too far away for enterprises like PEAK, which have just settled in the United States, and the top priority of the enterprise is the immediate difficulties and challenges."

A lesson from the past has also taught PEAK a lesson. When some foreign enterprises develop their business in China, they follow the Convention to entrust the market to the consulting companies. However, when they really enter the market, there will be many problems in detail. Therefore, on the one hand, PEAK embarks on a short-term overall plan from its own conditions; on the other hand, it decomposes the overall plan, and utilizes the characteristics of the highly specialized division of labor in the US market to find out the professional teams in the field and outsource them, and provide targeted solutions to specific problems.

3 localization risk: gradual localization

Compared with the one step approach, PEAK is more inclined to gradually explore and continue trial and error mode.

"Chinese enterprises, especially private enterprises, enter the US market or adopt a step-by-step approach, which is more secure. If the initial expansion is large, the risks are too great, and if the direction is wrong, it will take a huge cost to correct the route."

Said Su Jia.

The enterprise needs a period of time to feel the market and debug the state. In the process, it will inevitably encounter difficulties and setbacks.

The first problem soon emerged, that is, the products sold by PEAK in the United States are not very much in line with the taste of the US market.

Prior to that, PEAK has opened nearly 200 franchised stores in more than 90 countries and regions in Eastern Europe, the Middle East, Asia Pacific and Africa, and has accumulated over 20 years of export experience. Therefore, when entering the US market, "it is simpler to think, because the quantity and style of the existing products are relatively abundant, and they also have better performance in the international market, so they decided to be directly pported to the US market."

For example, the popular style of the United States is different from that of China, which is different from the latter's pursuit of "colorful, colorful" clothes. The United States emphasizes the scientific and technological content of clothing and fabrics, and the demand for color is not high. Moreover, the sizes and sizes of clothing and sports shoes marked by codes are very different for the US Code market.

Enterprises with export experience often make this "take for granted" mistake. In fact, product export is completely different from the concept of opening a store in the United States. "The previous exports were mainly aimed at two situations: one is the relatively low-end market, and the other is in the US.

The discovery of this problem also directly promoted the establishment of PEAK's R & D center in the United States. At present, PEAK's products in the United States consist of three parts: the first one is the existing products that are suitable for the US market; the second part is the improved version of the existing products, and these products have no problems in design, they only have discrepancy with the needs of the US market in terms of colors, sizes or materials, so they can be fine-tuning. The third part is made by the design team specially tailored for the US market.

Su said PEAK hopes that the two products will become the main force in the US market, but it can not be achieved at present.

"Basically now is more than 50% of the existing products, more than 30% of the improved products, and less than 10% of the design products are only provided to the NBA stars, and did not really push the market."

This is also a gradual process. For example, the pition from the first product to the second product requires the digestion of the new process or new material by the factory. On this basis, the existing products will be reformed, while upgrading to the third products will take longer.

Su Jia frankly, "this will have a certain impact on product sales, but it is not practical to solve it at once."

Because the improvement of products leads to the whole body, the whole chain of design, procurement and production should be coordinated.

Take large size sports shoes as an example, because the demand of China's super large size is not large, so the large size mold is relatively less, which directly leads to low output and insufficient style, which will inevitably affect the market launch; on the other hand, the sales volume of the US market has not been fully mobilized at present, so it is unrealistic to ask the factory to go on a large scale to open the mold. "It is certainly good to make all the big code styles, but we must consider reasonable cost inputs."

Said Su Jia.

"Reasonable cost investment" means localization, and can not blindly cater to the market's small demand.

"Shoes sales or clothing sales enterprises know that a concept is that you can never satisfy all the needs of consumers, and there are bound to be such defects. The key is to see whether the defects are within their tolerable range and whether they will affect the market reaction of most parts."

Therefore, PEAK is also a selective solution to the problems in the early development.

This is also a strategy for PEAK to open a store in the United States. Su Jia said that the speed of opening stores in the early stage would not be too fast, because the key to the two shops is not sales performance, but to gather information as a tentacle to contact the US market.

"In the process of operation, we can further collect market feedback, and when there are enough data and cases to support, product improvement will be more effective."