With a loss of 700 million yuan a year, "North American Foot Fitness" entered Amazon for change

With a loss of 700 million yuan a year, "North American Foot Fitness" entered Amazon for change

The sports brand, which was once popular both at home and abroad in the past two years and was rushed to buy by celebrities and aristocrats, has now been exposed to have been losing money for many years in a row, and the losses are still expanding.

 

That's right, today's protagonist is the environmentally friendly sports shoe brand Allbirds. Maybe many people have not heard of this brand, but it does not prevent it from becoming popular all over the world.

 

Abroad, many Hollywood stars, including Leonardo DiCaprio, have been its loyal fans. In China, it has become a social currency for the middle class to "low-key show off their wealth."

 

 

With a loss of 700 million yuan in one year, is the environmental protection card no longer effective?

 

It is understood that Allbirds is a sports brand founded in San Francisco, USA in 2016. It was co-founded by former New Zealand international Tim Brown and renewable materials expert Joey Zwilinger.

 

 

In November 2021, Allbirds was listed on the Nasdaq with an IPO price of $15 per share and a total fundraising of $300 million. After the listing, the company's market value once exceeded $4 billion.

 

One of the points Allbirds promotes to the outside world is that the carbon footprint of its products is 30% lower than that of ordinary sports shoes.

 

The upper is woven from eucalyptus fiber, the sole is developed from sugarcane, and the insole is infused with castor seed oil ... When these raw materials are laid out, people don't think of them as sneakers at all, but more like a plate of salad.

 

Because its simple design is very consistent with the dressing style of Silicon Valley programmers, Allbirds was selected by the New York Times as one of Silicon Valley's "iconic clothing" in August 2017, becoming a "special suit for technology circle bigwigs" on par with plaid shirts and down vests.

 

Many domestic consumers affectionately call it "Silicon Valley Foot Pedal" and "North American Foot Fitness".

 

Although Allbirds attracted a wave of fans in its early days with its image as an "environmental fighter", the reality of starting a business was soon a damp squib.

 

In 2022, the financial report showed that Allbirds' net loss more than doubled from the same period of the previous year to $101.4 million (about RMB 700 million), but its revenue only increased by 7.3%. Today, its stock price has fallen by 93%, and its market value is only $150 million.

 

As a simple and comfortable sports shoe, Allbirds ' classic Wool Runner was once rated by Time magazine as "the most comfortable shoe in the world." However, according to consumer feedback, the most complained problem about it is that it is not comfortable to wear.

 

According to many consumers, Allbirds' flagship wool sneakers have very poor air permeability and become smelly after one day of wearing. Another mesh shoe has an upper that is too thin, which often results in the embarrassing situation of the big toe breaking the upper.

 

 

In addition to product problems, Allbirds has also made many mistakes in decision-making . It is reported that due to the company's growing losses, Allbirds' leadership decided to start transformation after many discussions and tried to enter the professional sports shoe category.

 

However, this transformation exhausted Allbirds' very limited resources and failed to make any splash. The functionality of the new products was far inferior to that of professional sports brands.

 

Finally, Allbirds had to admit that its excessive investment in professional sports was a wrong decision made by its management.

 

Allbirds struggles to change by entering Amazon and developing wholesale channels

 

Recently, foreign media reported that Allbirds had put its products on Amazon as early as November 14 this year, including Tree Runners, Tree Breezers and other shoe styles, and all the products were shipped by Amazon.

 

The move comes as Allbirds is aggressively expanding its distribution network. While Allbirds doesn’t consider Amazon as a wholesale channel, the brand has been steadily expanding its distribution partnerships with multiple retailers, such as REI, Public Lands and Zalando.

 

“Many consumers choose to buy apparel and shoes on Amazon, and while some are aware of Allbirds, many are not, ” the company wrote in an emailed statement. “ Our goal is to meet consumer demand and provide them with more environmentally friendly alternatives to products currently on the market.”

 

After searching, it can be found that Allbirds' layout on Amazon is still in its infancy, with monthly sales of each product only 50+ and the number of reviews being a pitiful twenty or so.

 

 

In terms of search term rankings, the keyword allbirds ranked 47737 in the US this week, up 11042. The rankings of the keywords allbirds mens and allbirds shoes men also climbed to varying degrees. Only the ranking of allbirds women shoes dropped, which shows that the brand is more attractive among male consumers.

 

 

According to data from Google Trends, the search volume for the keyword allbirds in the United States saw a small peak at the end of November. Of course, this is largely due to the traffic brought by Black Friday and Cyber ​​Monday.

 

 

From the current situation, Allbirds does not seem to have made any splash after entering Amazon. Of course, we cannot predict its future development just from the past few months.

 

In addition to Amazon, wholesale will be another strategy for Allbirds. At the third quarter earnings conference just past, Allbirds' CEO said seriously: "Wholesale will be a key channel in the future. It can provide us with opportunities to increase brand awareness and achieve profitability.

 

Previously, Allbirds adopted a direct entry strategy in the international market, but now it has begun to transform to a distributor model. At present, its distributor cooperation in multiple markets has been finalized, and it is expected to complete the transition by mid-2024.

 

In fact, whether it is the previous attempt to transform into a professional sports shoe, or the current entry into platforms such as Amazon and the continuous expansion of distribution channels, a key word surrounding Allbirds is "change."

 

In the future, how high Allbirds can fly depends on whether consumers are willing to vote for it with real money.

 

Allbirds enters the market, and related domestic brands going overseas may be affected

 

In recent years, the enthusiasm of footwear brands to go overseas has been high . In addition to the old sports brands Li Ning and Anta, many emerging brands have also begun to appear overseas, including VIVAIA, the flagship brand of Shenzhen's big seller Starlink .

 

It is understood that VIVAIA claims to make a pair of shoes with 6 mineral water bottles, and its environmental protection concept coincides with Allbirds.

 

In terms of channels, VIVAIA has entered cross-border platforms such as Amazon and Ebay, as well as built its own online independent website, selling through a variety of channels.

 

Now that Allbirds has entered Amazon in a high-profile manner, VIVAIA , another environmentally friendly footwear brand, will definitely lose some of its traffic.

 

However, although it also dabbles in men's shoes and sports shoes, VIVAIA 's main product is still women's shoes. The previous article concluded that Allbirds is more popular among male consumers, which indicates that VIVAIA will not be directly impacted by Allbirds.

 

In addition to VIVAIA, Putian's overseas sports shoe brand ONEMIX may also be affected to a certain extent.

 

It is understood that as early as 2016, ONEMIX launched its brand cross-border e-commerce project and quickly deployed overseas e-commerce platforms such as AliExpress, Amazon, and eBay.

 

As a sports shoe brand, if Allbirds can really rise again, it will inevitably have an impact on ONEMIX's sales and traffic.

 

By then, domestic big sellers may need to make relevant responses in terms of strategy or marketing.

Allbirds

Amazon

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