China's sportswear market has become the world's second largest market after the United States. According to Euromonitor data, the overall market size of mainland sports shoes and apparel will reach 371.8 billion yuan in 2021, an increase of 19.1% year-on-year.
Since 2004, the top two chinese sports brand market shares have been firmly occupied by nike and adidas two major international brands. But now that ranking is changing.
According to Euromonitor data, the top five market shares of China's sports shoes and apparel in 2021 are Nike China, ANTA, Adidas China, Li Ning and Skechers China, accounting for 25.2%, 16.2%, 14.8%, 8.2% and 6.6% respectively.
On March 22, ANTA released its 2021 financial report, with annual revenue of 49.33 billion yuan, surpassing Adidas China's 34.34 billion yuan and second only to Nike China's 51.02 billion yuan.
Among them, the revenue of ANTA's two major sports brands "ANTA" and "FILA" increased by 52.5% and 25.1% respectively to 24 billion yuan and 21.8 billion yuan, accounting for 48.7% and 44.2% of the group's overall revenue, respectively.
During the reporting period, an ANTA brand had 9,403 ANTA stores worldwide, including ANTA Children's independent stores.
Anta Group said that the revenue growth was mainly due to the easing of the epidemic and the improvement of the brand's performance in the Chinese mainland retail market, increased consumer demand and reduced retail discounts. In addition, the e-commerce business of the two major brands has also maintained growth. It is reported that ANTA's online sales on Tmall ranked first, and Nike and Adidas ranked second and third, respectively. Industry experts predict that if ANTA continues to maintain its current growth rate, its market value will soon surpass Adidas and slightly lag behind Nike.
Unlike in the past, today's Chinese brands are gradually getting rid of low-price dependence, and "cost-effective" is no longer the marketing choice. Especially the industry's leading enterprises.
With the rise of the national tide, local brands have been recognized and favored by more and more young consumers. As the official partner of the 2022 Beijing Winter Olympic and Paralympic Winter Games, ANTA also signed Gu Ailing as the brand spokesperson, which has won it a lot of attention.
At the same time, local brands such as ANTA have better upstream and downstream industry chain advantages, compared with foreign brands, the production and sales of new products in China are more streamlined, and the response to the market is more rapid.
Nike twice last year publicly said supply chain problems were hampering sales growth.
In the second fiscal quarter of 2022, Nike's revenue in Greater China was only $1.84 billion, down 20% year-on-year. Similarly, Adidas' local revenue fell by $650 million (4 billion yuan) in the third quarter of fiscal 2021. Despite this, foreign sports brands still have market space in China.
Nike said sales in China fell 8 percent year-over-year and better than analysts expected 12 percent during the three months to Feb. 28. This is a significant improvement from Nike's more than 20% decline in the previous quarter. China has always been Nike's most profitable market. Wedbush analyst Tom Nikic said in a note that the biggest suspense for Nike stock is China, but now the region is "moving in the right direction."
Adidas is also actively reinvigorating the Chinese market. In the third quarter of fiscal 2021, Adidas Greater China sales fell by 15%. Recently, Adidas announced Adrian Siu as Managing Director of Greater China, succeeding Jason Thomas, who took office in 2019. Xiao Jiale has held various positions at Adidas in Hong Kong and Shanghai, and has served as CEO of Chinese fashion brand Cosmo Lady.
Although ANTA's official sales data is eye-catching, the challenges of international mature brands are still there, and THE CURRENT DEVELOPMENT OF ANTA also reflects the dilemma and breakthrough of Chinese manufacturing when it realizes brand upgrading for the world.
In 2009, ANTA acquired FILA's franchise and trademark use rights in China. In 2016, ANTA established a joint venture with Descente Desante, in 2017, it established a joint venture with Kolon Sport, and in 2018, it won the Finnish sporting goods company Amer Amer fin Sports, which includes well-known brands such as Archaeopteryx and Wilson.
According to incomplete statistics, as of now, ANTA has increased its sub-brands to more than 30 through acquisitions and mergers and acquisitions. The multi-brand strategy has increased ANTA's profitability and helped it enter the international market faster. But it also has the potential to defocus the ANTA brand itself.
As another well-known local sportswear brand, Li Ning Group has chosen a "single brand" strategy. On March 18, Li Ning Company (02331. HK) announced its 2021 annual results, in which the Group achieved sales revenue of RMB22.572 billion in 2021, an increase of 56.13% over the previous year, and net profit attributable to the parent company of RMB4.011 billion, a substantial increase of 136.14%. The Group said that Li Ning Group continued to deepen the implementation of the "single brand, multi-category, multi-channel" strategy to fully support and reflect the value of Li Ning's experience.
Behind the establishment of the brand is a contest about long-termism, and the final effect of different playing methods has yet to be tested by the future market and users.
According to a recent fair observer report, Michael Norris, research and strategy manager at consultancy AgencyChina, believes that "ANTA is seen as a strong choice, but it is still not the first choice for many, even if it is now definitely seen as a quality alternative to foreign brands." ”
In any case, in the era of transformation and upgrading of China's manufacturing for global brands, becoming a substitute for international brands is no longer their ultimate goal, how to find their own power point, how to continue to tell the Chinese story through products and marketing, and establish a solid moat for brand reputation and sales, which is more expected by the outside world.