Gifts / Sports & Toys

"The domestic sports shoes and clothing market is no longer the double super pattern of Nike and ADI. Anta is not only surpassing ADI, but also making an impact on the top."

Anta's revenue in 2021 was 49.33 billion yuan, while Adidas fell to 34.34 billion yuan, and Nike ranked first was 51.02 billion yuan.

Anta, as one of the representative brands of domestic sports brands, undoubtedly gives the whole industry a sample. International brands have declined in the domestic market, and the performance of domestic brands has increased against the trend, forming a sharp contrast. We also need to see its foundation.

Anta is only one step away from Nike

According to Anta's annual performance announcement in 2021, the group's total revenue reached 49.32 billion yuan, a year-on-year increase of 38.9%; Business * * * increased by 20.1% year-on-year to 10.99 billion yuan, and * * * exceeded the 10 billion mark; Net return to parent * * * increased by 49.6% year-on-year to 7.72 billion yuan.

According to the latest data, Anta also achieved a positive growth of 10% ~ 20% in the first quarter of 2022.

However, the market performance of international giants Nike and Adie in Greater China suffered a decline. Especially ADI, Anta has completely surpassed ADI and has reached Nike's revenue level last year.

In contrast, in the first quarter of this year, Adidas had a revenue of 5.302 billion euros, an increase of 0.6% over the same period last year. However, there was a serious decline in business * * *, down 38% to 437 million euros, and the business * * * rate decreased by more than 5 percentage points to 8.2%. The main reason is the poor market performance in Greater China. It is reported that greater China is Adidas's third-largest market, with revenue falling nearly 35% in the first quarter of this year.

Nike's sales performance in Greater China also suffered. According to the financial report, Nike's revenue in Greater China decreased by 20% and 5% year-on-year respectively in the second and third quarters of fiscal year 2021. In the second fiscal quarter ending November 30, 2021, Nike's sales revenue in Greater China fell by 20% to $1.844 billion. In the third quarter ended February 28, 2022, Nike's revenue in Greater China decreased by 5% year-on-year to $2.16 billion. The reasons given by Nike are constrained by the supply chain and affected by the epidemic.

However, it can be seen that the decline of international brands and the rise of domestic brands form a counter attack.

An analyst revealed to us: "in the past, international brands and domestic brands were lying down. But now Nike ADI's position in domestic sports brands has begun to shake, and this force is the rise of domestic consumption. Next, the following strategy of domestic brands should be transformed into the leading strategy."

Of course, the challenges remain enormous. According to Euromonitor data, the top five market share of sports shoes and clothing in 2021 are Nike China 25.2%, Anta 16.2%, Adidas China 14.8%, Li Ning 8.2% and SKECH China 6.6%.

Morgan Stanley predicts that Anta Sports' total revenue will grow by 13% and 18% this year and next year, while its net profit will grow by 7% and 28%.

It is Anta's goal to face the top of the market. Ding Shizhong once set the goal of occupying the first market share in China by 2025 and achieving global * * * by 2030. This also shows Anta's ambition, but to truly achieve global prosperity, of course, the challenges and pressures are very great. Anta needs stronger concentration and more killer Maces.

The market still has great explosive potential

In fact, not only Anta, but also domestic brands have performed prominently in this wave. Li Ning achieved retail sales growth of 20% ~ 30% in the first quarter of this year. Tebu's retail sales in mainland China increased by 30% ~ 35%; There are 361 degrees, noble birds, etc. it can be said that domestic sports brands usher in a good time.

From the market side, domestic brands still have big explosive points.

Consumption upgrading has enlarged the market cake. Benefiting from the improvement of consumers' health awareness, the sports loving population continues to expand, and the domestic sports shoes and clothes continue to expand. According to the data, it is expected that the scale of China's sportswear market is expected to reach 600 billion yuan in 2026, with a CAGR of about 15%.

Similarly, when we look at the consumer side, we will find some obvious changes. Domestic goods are becoming the mainstay of the consumption of post-90s, post-95s and post-00s.

We observed that in the consumption of sports shoes and clothing brands, domestic brands are more and more recognized among young consumers. A large number of events about the rush purchase of domestic brands can be found from major social media platforms.

Fundamentally speaking, the rise of domestic brands is still strong enough.

The investment of domestic sports brands in innovation, R & D and supply chain is the internal driving force of brand growth, which makes it accelerating internationalization. In addition, the new retail and marketing methods make it possible for domestic brands to overtake in more corners.

Anta's foundation

According to our long-term observation, the change of Anta almost represents a new path of self transformation of domestic brands.

For example, in line with the industry trend of high-end and differentiation, Anta has adopted the layout of multiple brands corresponding to each subdivided field. For Anta, its high-end route began to form a high-end brand matrix with the acquisition of international brands one after another. These high-end layout also contributed to higher revenue.

Anta adopts multi brand strategy in its playing method. It has taken the means of acquisition to enter the high-end market. In recent years, it is its "multi brand strategy" that has led Anta to step out of the cold winter of the industry and expand its own development. Anta obtained the operation right of FILA China in 2009, acquired sprandi in 2015, signed a cooperation strategy with Descente in 2016, included Kolon sport in 2017 and acquired yamafen sports in 2019... This series of acquisition events are Anta's ambition to enter the high-end market.

In particular, the successful operation of FILA has brought high revenue growth to Anta and become an engine of performance growth. In 2020, FILA's revenue exceeded that of Anta's main brand. According to the current brand layout of Anta, the layout has been basically completed not only in the high-end market, but also in the high-end professional market.

According to relevant data, for outdoor sports brand groups with desente and Kolon sport as the core, it can be regarded as the third and high potential growth curve. At present, Anta has more than 10 brands. All three growth curves performed well.

In the first quarter of 2022, the retail amount of Anta's main brand recorded a positive growth of 10% ~ 20% compared with the same period last year, and the retail amount of FILA brand products recorded a positive growth of medium units year-on-year. The retail value of all * * * products recorded a positive growth of 40% ~ 45% compared with the same period in 2021.

In addition, Anta children also showed eye-catching performance on the subdivision track. According to the data, Anta children's sales share in China's sports shoes and clothing market accounts for 2%, 0.2% higher than Nike children and 0.4% higher than Adidas children.

In addition, as a strategic direction, DTC is an important step in Anta's transformation in recent years. DTC has become a new strategy for domestic sports brands. From the perspective of model, the transformation from "brand retailer" to "direct retailer" can face consumers, control consumption data and improve consumption experience.

Anta announced in August 2020 that it would transform Anta's main brand into DTC and transform the stores originally operated by offline distributors (about 35% of nearly 3500 stores) into direct sales mode.

According to the financial report, Anta has established a complete retail business process and various operation standards, which has greatly increased the store revenue of shopping centers in first to third tier cities. DTC business accounts for nearly 70% and the store efficiency has been improved by more than 25%.

It also confirms the * * * brought by DTC from the side. Anta executives have said that commodity * * * will increase to 75% in 2023. DTC accounts for 70% of the whole, and the annual compound of online flow is 30% +. Now the goal is almost achieved.

The proportion of online business also continued to increase, bringing new growth. Anta has also found the help of the new model. For example, through full retail, store live broadcast, KOL grass planting and other ways to improve the transaction rate.

Anta continues to invest in "full coverage", and the two engines online and offline are driven at the same time. According to the data, in 2021, the group's e-commerce business revenue increased by 50% year-on-year, and the proportion of revenue contribution reached 29%. Online business aims to account for 40% of the overall business in the next five years.

Founder Securities previously released a research report on Anta sports, a listed company, which mentioned that by 2025, Anta's private domain will account for more than 20%, the number of effective members will reach 120 million, and the number of members will be * * * 40%. Its brand FILA is also expected to account for 40% online in 2025.

There are also more performances in the intelligent upgrading of logistics and supply chain system. For example, the average turnover time of goods has been accelerated by more than 15 days, and the single piece logistics cost has been reduced by more than 15%.

Then focus on ESG. In 2021, Anta Group * * * increased by 38.9%, while the total greenhouse gas emission density increased by only 12.2%.

This is also the long-term path that Ding Shizhong must take to "not be Nike in China, but Anta in the world". This road has a long slope with thick snow.