Xu Zhihua: China Has To Build An Influential Sports Brand.

July 30th 2016 NetEase annual summer meeting of economists is held in Beijing.

In the era of capital - opportunities and risks,

Group CEO Xu Zhihua keynote speech.

He said that the sports industry is now facing the opportunity of rapid development, because our people's living standard has been raised to money and leisure. I hope China has sports that are influential in the global field.

。

The following is a written record:

Xu Zhihua: Good afternoon, ladies and gentlemen. I am very pleased to be invited to participate in this sports industry forum this time.

Here, I would like to share with you a brief understanding of PEAK's understanding of the sports industry and what PEAK should do when it comes to the next sports industry.

Just now, Mr. Yi mentioned that we hope that China has a sports brand which is influential in the global field. This is the common dream of all sports people and all sports industry people.

As PEAK, we have been working hard to fulfill this dream and carry out such efforts.

The sports industry is now facing the opportunity of rapid development. I think the most important reason is that our people's living standard has been raised to have money and leisure. According to foreign experience, after more than 8000 dollars, the people can participate more in sports and take the movement as the main way of life.

As you can see, sports have become a very important way of life for Chinese people.

The way we used to socialize might be drinking, and playing around now is a mainstream way.

Of course, I agree with Yi's judgement just now that the real sports population in China is still very small. This is why our sporting goods industry used to say that we built a professional brand, but the sports industry in China used to be an industry selling sheep's head and selling dog meat. It was sold to pan sports population, but sports leisure, not real sports.

With the change of lifestyle of ordinary people, the real sports population will be more and more. Of course, this growth rate will certainly not be like some capital strength, like the Internet, which can be changed from hundreds of millions to tens of millions of people overnight, and there is no way to do it in a short time.

This is a long-term trend. I also agree with Yi's view that sports industry is at least ten years old. If we hope to get an explosion in a short time, it will be very difficult for us to make profits in a short time.

In the past, China's big sports industry was more deformed, and the sports equipment manufacturing industry was thriving, like PEAK in sports equipment manufacturing industry. Why is this? Because our sports equipment manufacturing industry is from the beginning of our birth to the whole city. At the very beginning, we are competing globally, without any policy protection, without any policy support.

Under such circumstances, we have exercised our abilities.

Several other branches of sports industry, including sports events and other extended products, are restricted by the traditional system and the structure of talents. They have never been rapidly growing up, and it is difficult to achieve a larger profit model.

With the improvement of the real sports population and the improvement of the population who really engage in sports population, China's sports industry will break into subdivision, and the demand for genuine professional sports will rise.

In this case, all kinds of capital come in, as sports practitioners are very welcome to come in, but we should also fully understand that the sports industry may not be like we used to invest in other industries. I will invest five or ten times this year in two or three years. Maybe in most of China's current enterprises, it is very difficult to achieve such a goal.

I think more is to use long-term thinking in sports industry.

For PEAK, since the draught of sports has arrived, since the sports crowd began to rise, for PEAK, on the basis of the past sports equipment manufacturing industry and the next strategy, we put forward the establishment of the whole sports ecosystem, and the layout of the whole ecological circle will be built around the needs of the target consumers.

In other words, PEAK will come out to do the vertical integration of PEAK sports ecosystem.

Based on sports equipment and the accumulation of sports equipment manufacturing in the past years, we will start to attract a sports fan to our store around a sports fan or to buy one of our products online.

In the future, we hope that consumers will have more contact with us.

Maybe it's not just buying equipment, but also receiving sports training, basketball training, for example, taking a basketball lover as an example. In the future, PEAK may not only come to our store to buy a pair of shoes, but also can join us in Howard's training camp and so on. We can arrange them to interact with the rockets and the heat team and organize their American tourism. We can take the excellent NBA athletes as their agents, as their brokers, to achieve greater promotion and so on, including basketball courts. In the past, PEAK has done a PEAK basketball park such a project to carry out the pformation of the basketball court. In the future, we will continue to keep the project in depth.

In short, our goal is to make vertical integration around the needs of a consumer enterprise.

How to build this ecological mode? I want to combine the basic characteristics of sports industry, sports industry, I think the most important is two resources, one is the core IP resources, one is the talented person who understands this industry.

From these two points of view, PEAK will enter the industry, we will use internal incubation to the internal business, to angel investment, PE investment, VC investment, mergers and acquisitions and so on, we may extend the investment mode will be very much, we are based on the integration of sports industry.

{page_break}

Sometimes when I communicate with some funds, from my personal perspective of business, I feel that in my past 15 years of my life, I entered this industry in 2001. Over the past 15 years, more and more of our sports equipment, sports equipment, sports brand and an international professional sports brand are being built.

As there will be 20-25 years in the future, I will persist in deep plowing in the sports industry.

Here we also use this platform to welcome all aspects of cooperation with PEAK, whether it is capital or talent.

One of the advantages that PEAK has accumulated in the past is our positioning. In the past 20 years, we have been positioning ourselves in international and professional sports brands, especially in basketball field. We also have more resources and connections. Now we have deep cooperation with NBA teams, including FIFA, basketball related system, PEAK in the past 20 years, and we will carry out further development in this area.

Using PEAK's core resources, it is open to all entrepreneurs and all partners to build a basketball ecosystem.

I will not repeat the specific matches.

In short, the sports industry is a fast growing and irreversible industry in the future. But it is also an industry that can not burn its head by capital. If it is too hot money, it may not necessarily achieve the goal.

Because the sports industry needs deep tillage and needs to carry out deep tillage for every sport. I am very supportive and optimistic. In every field, a very professional person comes out to start a business, because in this field, his understanding of products and service will be more powerful than that of ordinary people.

Thank you for your time. Thank you!