Bags / Shoes & Accessories

Recently, the news that the market value of Canadian sportswear brand lululemon has overtaken the German sportswear giant Adidas has attracted attention. As of the latest trading day (16:00 on July 11, Eastern Time), Adidas (ADDYY.US) closed at $81.8 per share, with a total market value of about $31.428 billion; lululemon (LULU.US) closed at $281.76 per share shares, with a total market value of approximately $35.934 billion.

Times Finance found that not only lululemon, but also Chinese sports shoes and apparel group Anta, has a market value that surpasses Adidas.

Since the beginning of this year, the market value of the giant Adidas has been overtaken by Anta (2020.HK). As of July 12, Anta Sports' share price was HK$94.9 per share, with a total market value of HK$257.523 billion (about US$32.81 billion), surpassing Adidas but not as good as lululemon.

This also means that Adidas' position as the world's second largest sportswear group has been challenged and threatened by an unprecedented amount. However, as of now, the market value of lululemon, Anta, and Adidas is far less than the nearly $170 billion Nike Group (NKE.US).

It is understood that following the continuous plunge in technology stocks, the retail sector of US stocks has also ushered in a moment of shock this year. In the sports shoes and apparel industry, investors seem to be the first to lose faith in Adidas. In the past six months, Adidas shares have fallen nearly 44%. In comparison, lululemon’s stock price has fallen by nearly 19% in the past 6 months, and Nike’s is 30%.

Many analysts attribute the weakness of Adidas in the capital market to its performance in the Chinese market. Data show that in the first quarter of this year (as of March 31), Adidas' revenue reached 5.302 billion euros, excluding the impact of exchange rates, down 3% from the same period last year. The sales in Greater China fell from 1.402 billion euros in the same period of the previous year to 1.004 billion euros, a 34.6% year-on-year drop in neutral currency. Prior to this, the performance of Adidas Greater China had declined for three consecutive quarters.

Although Adidas management has repeatedly stated that the growth of the Chinese market has only been delayed, in the long run, it is still full of confidence in the Chinese market. At the same time, management also expects to offset the impact of the Chinese market on the overall performance through "strong double-digit growth" in other regions.

But one analyst said, "China has always been the fastest-growing sportswear market in the world, and under such circumstances, such performance is a big blow to Adidas."

According to Rui Euro Consulting, the top five companies in China's sports shoes and apparel market share in 2021 are Nike China, Anta Group, Adidas China, Li Ning Group and Skechers China. That year, Anta Group completed the overtake of Adidas China with a market share of 14.8% with a market share of 16.2%, jumping to the second place. And the ranking code is bad, which is smashed and leaked, and the surname of neon is 25%.

In the increasingly complex competitive environment of the Chinese market, it is obviously not easy for Adidas to regain the lost Chinese market. Another independent analyst pointed out directly, "While Adidas has achieved double-digit growth in overall net sales over the past year, local Chinese rival Anta's revenue has grown by more than 55% over the same period."

The analyst also emphasized that although Anta is still in a growth phase compared with established companies like Adidas, this difference in growth is to be expected, but it means that local brand Anta is dominating the Chinese market. It is the source of the rapid growth of Adidas in the past few years."

However, due to the impact of the epidemic, Anta's performance in the second quarter of this year also paled slightly. The latest operating performance announcement for the second quarter and the first half of the year released on the evening of July 11 shows that in the second quarter of 2022, the retail sales of Anta brand products (calculated by retail value) recorded a negative growth of mid-single digits compared with the same period of the previous year. , while FILA branded products recorded high single-digit negative growth.