Gifts / Sports & Toys

On August 20, the data report of "Tik Tok 818 New Trend Good Things Festival" was released. The report shows that during the event from August 1st to 18th, Guochao Goods was welcomed by consumers, and sales increased by 443% year-on-year; in the "Shaking in Hot Style List" area, the number of domestic brands accounted for more than 70%, accounting for 74.9 %. Among them, the sales of sporting goods increased by 407% year-on-year. Li Ning, Hongxing Erke, Huili, Anta, and Guirenniao were the top 5 domestic sports brands in sales during the period.

At present, domestic fashion sports brands are forming a "national trend heat wave", which can be seen from the performance reports recently released by various brand companies. However, I wonder if this wave of heat wave is a sprinter-type sprint, or can it be turned into a marathon-like boost for domestic brands for a long time?

Domestic brands are hot, foreign brands are cold

On March 24, 2021, a statement on the H&M Group’s official website attracted great public attention. Many domestic e-commerce platforms removed H&M products. Searching for keywords such as H&M and HM on Taobao, JD.com, Pinduoduo, Vipshop, etc. Show related shops and products.

Since then, foreign brands such as Nike, Adidas, Uniqlo, GAP, New Balance, ZARA and Under Armour have also been affected. At this time, domestic sports brands leaped to the front and received unprecedented attention. At the close of trading on March 25, Anta's stock price rose nearly 9%, and Li Ning's price rose more than 10%. On March 26, Li Ning's strong market continued, rising to 9% in early trading, and the official announcement of the spokesperson Xiao Zhan detonated the Weibo topic index. The situation of "cold outside and hot inside" in the domestic sports brand market has begun to take shape.

In the following months, the performance of many domestic sports brands ushered in significant growth. On July 8, Anta Group announced its operating performance in the second quarter and first half of 2021. In the second quarter, Anta brand retail sales increased by 35%-40% compared to the same period last year; the first half also increased by 35%-40% year-on-year; its FILA Retail sales in the second quarter increased by 30%-35% year-on-year; sales in the first half of the year increased by 50-55% over the same period. As of August 21, the market value of Anta Sports exceeded 430 billion Hong Kong dollars.

In late July, the performance of Hongxing Erke, which was touted by donating materials to help Henan, also increased dramatically. Take Taobao live broadcast as an example. In the two live broadcasts on July 24-25, Hongxing Erke’s live broadcast room had more than 13 million viewers, and on the 24th, nearly 20 million viewers, and its offline store products were quickly sold out. However, after the hot spot, the viewing data of Hongxing Erke's live broadcast room continued to decline.

According to Feigua data, from August 14-20, Hongxing Erke gained 104,000 followers through live broadcast on Douyin, but it also lost 107,000 followers. At the same time, the sales of the live broadcast room this week was only 6.509 million yuan, less than 1/10 of the sales of the hot week from July 17-23. A staff of Hongxing Erke's offline store told reporters that in fact, they were also very worried that the store would return to a deserted state after the heat passed.

On August 13, Li Ning Company announced the group’s first half of 2021 performance. During the period, the group’s revenue reached 10.197 billion yuan, a year-on-year increase of 65.0%. This was the first time that Li Ning’s half-year revenue broke the ten billion mark; the gross profit during the period was 5.699 billion yuan. A year-on-year increase of 86.4%. On August 17, 361 Degrees announced its first half of 2021 results. During the period, revenue was 3.107 billion yuan, a year-on-year increase of 15.7%. According to the financial report, the increase was mainly due to a 22.9% year-on-year increase in sales of clothing and footwear products and due to market conditions. The recovery and the positive impact of the incident of supporting the use of Xinjiang cotton during the period under review.

In contrast, many foreign sports brands are cold in the Chinese market. According to a report by Morningstar, a US investment research organization, in April this year, Adidas and Nike’s Tmall flagship store sales fell 78% and 59% year-on-year, respectively. Uniqlo’s sales fell by more than 20%, while Li Ning’s Tmall flagship store sales rose. Over 80%, Anta also has a significant growth.

On June 25, Nike released a report for the fourth quarter of fiscal 2021. During the period, Nike’s sales in Greater China were US$1.9 billion, which did not reach the expected level of US$2.2 billion. On August 5, Adidas released its second quarter 2021 financial report. During the period, revenue was 5.077 billion euros, an increase of 51.5% year-on-year. It is worth noting that its sales in Greater China dropped by nearly 16%, and China became the only negative growth company. Region.

Wayfinding and chasing

However, despite the unprecedented popularity of domestic sports brands this time, feelings cannot smooth all the gaps. Objectively speaking, there is still a certain gap between domestic sports brands and foreign sports brands, which exists in all aspects of product design and development, market operations, and corporate management. The influence of foreign big names in China still exists, and some consumers may still return to foreign sports brands such as Adidas after a period of time. How to adjust the brand strategy, enhance product power and brand power, and transform the momentary enthusiasm into consumer support for brand power is a question worth considering for domestic brands.

After the release of the financial report for the second quarter of this year, Li Ning Group CEO Qian Wei emphasized that in the future, Li Ning will continue to implement the "single brand, multi-category, and multi-channel" strategy, and there is no plan to acquire a new brand. The company will focus on tapping the potential of Li-Ning's experience value and creating a "muscular corporate physique". In order to make the brand more focused, Li Ning chose to take the initiative to shrink. According to the financial report, as of June 30, Li Ning had 6,745 offline stores, a decrease of 188 from the end of last year.

In terms of internationalization strategy, Li Ning is still cautious and conservative. Although since the start of the New York fashion show in 2018, Li Ning has subverted the old brand impression and entered the international market. However, in actual business, Li Ning's overseas sales have been hovering at a low level. According to the financial report, only 1.2% of Li Ning's revenue in the first half of this year came from the international market, and the rest came from the Chinese market. Li Ning also responded earlier, stating that China has many opportunities to do so, and therefore will continue to dig deeper and expand the depth and breadth of Li Ning's domestic market.

Unlike Li Ning’s insistence on a single brand, Anta adopts a multi-brand and omni-channel strategy to meet the needs of different consumer groups and consumer levels. In 2009, Anta acquired FILA. Since then, Anta has also acquired Sprandi, Descente, Kolon Sport and other foreign countries. Brand. Among them, Anta's main brand is for the mass market, and FILA is focused on the mid-to-high-end market.

With the growth of FILA's performance, it has now surpassed Anta's main brand and has become the core of Anta's performance growth. In contrast, Anta’s main brand experienced weak growth in the first half of the year, and with the exception of FILA and Anta’s main brands, other brands contributed very little in revenue. According to institutional analysis, as a "combined giant", putting aside FILA and other acquired brands, Anta is still the Anta. In the face of the current national boom, Anta has also begun to think about the main brand of "public, professional, and new domestic products". Future development.

On July 8, Anta released its strategic goals for the next 5 years and a rapid growth plan for the next 24 months for the main brand. I hope to maintain the leading position of Chinese sports brands by 2025.

The route planning of the leading domestic sports brands is still being adjusted and perfected. However, it is worth noting that even though Li Ning and Anta have achieved outstanding results among domestic brands, there is still a gap between them and Adidas and Nike in terms of product development and innovation. . According to the financial report, Anta's R&D expenditure in 2020 is 871 million yuan, and the R&D investment ratio is 2.45%; in 2020, Li Ning's R&D investment is 323 million yuan, and the R&D investment ratio is 2.23%. It is understood that the R&D investment of Adidas and Nike has remained above 7% over the past year. Domestic sports brands still have a lot of room to catch up with in terms of R&D and innovation.

The domestic product sentiment and the momentary popularity cannot ensure that the company will stand firm in the market for a long time. While domestic sports brands are favored by more consumers, Dongfeng can use this to further promote the research and development and innovation of related products, and attract consumers with better products. According to the data of iiMedia Consulting, the market size of China's sports shoes and apparel industry will reach 385.8 billion yuan in 2021; and according to Euromonitor Consulting, the relevant market size will reach 599 billion yuan in 2025. The track of Chinese sports shoes and apparel is still wide, and the product strength and brand strength of domestic sports brands still have great room for improvement compared with foreign big brands. There are more opportunities and more and greater challenges.