Anta'S Impact On "World No.1" Is Like Walking On Thin Ice

Behind the net profit surpassing ADI, Anta is "walking on thin ice".

The Tokyo Olympic Games are the top priority for Anta.

"I want to go from two ways. Marketing at the brand level needs to dig a point and tell a story to consumers; Effect marketing, we will design a lot of Olympic related products from the design side and the product side. "

Earlier, in the sports industry carnival, Anta brand vice president Zhu Chen, who gave high hopes for the Tokyo Olympic Games, told the media.

Unconsciously, Anta's market value has exceeded HK $400 billion. In 2020, Anta surpassed Adidas with a net profit of 5.162 billion yuan for the first time (with a net profit of about 3.314 billion yuan), becoming the most profitable sports brand company in the world outside Nike.

However, behind these brilliant figures are the opportunities and challenges Anta is facing.

　　01 The road of brand upgrading

What do you think of Anta?

In the past few years, Anta has grown rapidly: it surpassed "big brother" Li Ning in 2012 and maintained double-digit growth since 2014. In 2015, its revenue exceeded 10 billion yuan, and its market value exceeded 200 billion Hong Kong dollars in 2019, greatly surpassing Adidas.

The fierce growth is due to more and more Chinese consumers to buy Sports Leisure and professional clothing, but also due to the company's multi brand strategic layout: the main brand positioning, high cost performance, seize the masses of consumers; At the same time, multi brand strategy is used to cut into the middle and high-end market and segment the market.

So, how is Anta's brand upgrading realized?

In 1991, Ding Shizhong, a shoe dealer in Beijing, realized that OEM was not a long-term solution. Only by being his own brand could he have a higher premium ability. So he returned to his hometown of Jinjiang and co founded Anta - "start a business with ease and be a down-to-earth person".

Under his leadership, the factory turned the main business of the original brand processing into a sideline, and began to operate Anta brand.

Since then, Anta's development has experienced three stages of success.

The first stage (1999-2010): promotion of popularity, launch of sub brands, acquisition of FILA.

In 1999, Anta signed a contract with Kong Linghui as the image spokesman and put advertisements on CCTV, completing the construction of business model from production to brand wholesale. Subsequently, the company continued to make efforts in marketing and R & D, and began to operate offline stores directly.

In 2005, the company's sales doubled.

In 2007, Anta Sports entered the capital market in Hong Kong.

In 2008, Anta launched its subsidiary brand Anta children.

Anta acquired FILA in 2009.

The second stage (2011-2015): challenges and opportunities, anti Li Ning, FILA ushered in strong growth.

In 2011, affected by the financial crisis and the post Olympic inventory crisis, the sporting goods industry entered a period of adjustment. During this period, the company timely adjusted the structure of stores, inventory and channels, and expanded the product coverage.

Long term dependence on the wholesale mode of distributors can easily lead to brand merchants not sensitive to market demand changes, but also unable to perceive consumers' demands for products, resulting in serious inventory backlog. Therefore, Anta set off a wave of shop closures from 2011 to 2013.

Anta surpassed Li Ning in 2012 and became the first in China's sporting goods industry.

In 2013, the company launched the retail oriented transformation strategy, and the operation of FILA entered a turning point. The gross profit rate increased all the way from 45% in 2014 to 58% in 2020.

The third stage (from 2016 to the present): through the "buy and buy" mode, we will stay at the top of the domestic market.

In 2016, the company put forward the development strategy of "single focus, multi brand and omni channel", and FILA started to expand for three years. At the same time, the company accelerated the pace of brand acquisition and supplemented the professional segmentation positioning.

In 2020, the company's revenue will reach 35.6 billion yuan, ranking first in China sports group and approaching to world head sports brand group.

Since its establishment, Anta's competitive advantage in the sporting goods industry actually stems from two major transformations: one is the transformation from brand wholesale mode to brand retail mode; the other is from brand wholesale mode to brand retail mode; The other is to establish a multi brand operation strategy, spend a lot of money to win the brand right of FILA in China, and expand to high-end products.

The brand retail mode enables Anta to conduct retail management on dealers according to the unified standard, improve the overall quality and operation efficiency of the sales network, and then improve the inventory turnover efficiency, so as to realize the anti surpassing of Li Ning, and become the "first" of domestic sports brands.

However, under the multi brand operation strategy, the successful experience of the acquisition of FILA has made Anta a "sports brand factory" through the "buy buy buy" mode. This also makes people worry about whether Anta's multi brand strategy based on acquisition will eventually bring down Anta?

　　 02 Multi brand strategy or a stumbling block?

How to get on the world stage has been arranged by Ding Shizhong for many years.

In 2014, Ding Shizhong said at the half year performance meeting that Anta would learn from the sample of Lenovo's acquisition of IBM Business and let the enterprise go abroad through M & A and acquisition.

Subsequently, with the support of capital, Anta opened the "buy buy buy" mode.

Up to now, Anta has increased its sub brands to more than 30 by means of acquisition and M & A. among them, what made Anta famous in the first World War was the purchase of FILA China brand from belle.

This is the beginning of Anta's high-end layout and the beginning of internationalization.

Since 2018, FILA has contributed a considerable proportion of Anta's revenue.

According to the financial report, from 2018 to 2020, the revenue of FILA is 8.492 billion yuan, 14.77 billion yuan and 17.45 billion yuan respectively. In 2019, the revenue of FILA in the whole group accounts for 43.5%.

In 2020, the revenue of FILA will reach 17.450 billion yuan, with a gross profit margin of 69.3%, accounting for 49.1%, surpassing Anta, the main brand.

Anta's gross profit margin was 44.7%. That is to say, 9922 Anta main brand stores make less money than FILA 2006 stores.

This data makes the outside world begin to question whether "Anta's FILA or FILA's Anta" is. Therefore, Anta has even encountered the muddy water of well-known overseas shorting institutions for five times in a row.

Some people in the industry pointed out that Anta has not learned much about management, brand building and fashion design with such high-end brands as FILA in hand.

Anta did not learn much about Anta in an attempt to replicate the success of FILA.

After the acquisition of FILA, Anta has successively acquired the UK's sprandi (spandi) and the Hong Kong brand kingkow (xiaoxiaoxiaoniu), as well as Amer sports and other internationally famous sportswear brands such as Archaeopteryx, Salomon and Wilson.

With the continuous expansion of multi brand strategy, Anta still failed to rebuild a FILA.

As the senior clothing expert Cheng Weixiong commented: "we can't blindly expand the scale of performance through mergers and acquisitions, but we need to consider the internal factors of the sluggish development of the main brands. To truly reflect the value of retail, we need to tap the potential inside, not too diversified.".

　　 03 Hidden worries of "world Anta"

For domestic sports brands, Anta can go to the present position, has been very great.

However, Anta wants to become "Anta of the world", there are two hidden worries:

1. Li Ning and Adi follow closely

In the past 30 years of development, Anta's two important advances are anti super Li Ning and Adidas.

However, these opponents who were overtaken by Anta did not give up. They were always ready to pull back a game.

After three consecutive years of losses, Li Ning, the founder of the company, returned to the front line of company management at the end of 2014, bringing immediate positive effects. In 2015, Li Ning began to turn losses into profits; In 2016, it achieved revenue of 8 billion yuan and net profit of 643 million yuan.

To some extent, Anta's brand power is weaker than that of Li Ning. In recent years, Li Ning has been focusing on design, taking advantage of the international fashion week of New York with the help of the international fashion week. Wade's road has attracted a large number of young fans. Anta's main brand has only promoted "brand remodeling" since the second half of 2018, aiming to be closer to the young people in the first and second tier cities, but there has been no phased results so far.

With Li Ning, a strong enemy, making continuous efforts in scientific and technological innovation, the market share of Anta professional sports field in the future is still likely to face the risk of being carved up by Li Ning.

The strength of Adidas, which has just been taken away from the seat of "ten thousand year old second" by Anta, can not be underestimated.

In recent years, with the sinking market ignited, Nike and Adidas also aimed at Anta's "hinterland" - the mass market of low-level cities in China, and began to actively layout e-commerce business.

During the period of 618, double 11 and other activities, there was a big discount on commodities, and even offered a low price of 30 or 40 yuan for a piece of sleeve and 100 yuan for a pair of shoes.

Although such a price is slightly inconsistent with the image of high-end sports brands, consumers are quite impressed. During the promotion of Taobao double 11 in 2020, Adidas achieved a sales record of more than 100 million in one minute.

Therefore, once Nike, Adidas and other brands begin to popularize in the mass market of low-level cities, Anta may no longer be yyds in the hearts of young people in small towns.

In addition, it should be noted that Anta's net profit surpasses Adidas in 2020 is largely due to the objective factors of repeated overseas outbreaks.

With the large-scale vaccination of the new crown vaccine, the overseas epidemic situation showed signs of improvement.

In the future, whether Anta can maintain the state of surpassing Adidas still needs a question mark.

　 2. "Jinjiang system" replicates Anta's road to success

In addition to Li Ning and Adidas, there are also "Jinjiang brothers" such as Tebu and 361 degrees, who are trying to replicate Anta's success.

The first is to create a multi brand matrix. Taking Tebu as an example, since 2019, it has acquired the operation rights of jogging shoe brand sokoni, mountaineering sports shoe brand myle, leisure shoes brand gasway and military boot brand paladin in the Chinese market.

As a result, three main business lines have been formed, including professional sports (including sokoni and Melo brands), fashion sports (including gasway and paladin brands), and mass sports (mainly the main brand of Tebu), which are the same as Anta's strategy.

Capital is also optimistic about Tebu's strategy. Recently, Hillard capital has invested HK $1 billion in tempo, of which about HK $500 million will be used to develop the global business of TEB's "gasway" and "Paladin" brands.

The market was more enthusiastic about this. On the day of the announcement (June 15), the day of the announcement, Tebu rose by more than 30% at one time, and finally closed up by more than 20%.

Secondly, for their own main brands, most domestic sports brands, like Anta, are making efforts in technological innovation to enhance the product strength and professionalism of the brands themselves. For example, Anta launched a series of running shoes, and Li Ning launched a series of running shoes? Series of running shoes, etc.

In the competition of R & D and innovation, although Anta has the most investment, many patents and abundant capital and other first mover advantages, from the perspective of market reaction of product sales, Anta's large investment seems to have no obvious effect of leading peers.

Take marathon racing shoes as an example. As shown in the figure, among the same type of products of four brands, Anta marathon racing shoes have higher cost performance, but the sales volume is the least. This may indicate to a certain extent that Anta's main brand products still have much room for improvement in consumer experience and word-of-mouth.

At present, Anta has a clear road ahead of it: to keep its position as the leader of domestic sports brands, to seize the first place in domestic market in more market segments, to cross the two mountains of international brands Nike and Adi at home, and even try to leverage the firm backyard of giants - the core markets of the United States and Europe.

As the leader of the local sporting goods industry, the goal of "world Anta" has taken a big step, and the future can be expected, but it may be like walking on thin ice.