In 2023, the retail sales of clothing, shoes and hats, and knitted textiles above designated size in mainland China will reach 1.4 trillion yuan, a year-on-year increase of 12.9%, which is significantly better than the overall retail level of consumer goods (7.2%). Among them, the competition in the sports shoes and clothing market is extremely fierce, the industry seat is rearranged, and the head brand can be described as some people are happy and some are worried. Who's making money? Who's declining? Let's take a look:
361° recorded the fastest growth in the past decade, with operating income increasing by 21% year-on-year to RMB8.42 billion, net profit increasing by 28.7% year-on-year to RMB961 million, and sales of its two core products, footwear and apparel, increasing by 23.0% and 9.8% year-on-year, respectively. The brand has successively signed stars such as Nikola Jokic and Aaron Gordon to continuously enhance its influence.
Some industry insiders pointed out that 361° is the beneficiary of the trend of "consumption downgrade". Of its 5,642 sales outlets in China, 76.3% are located in third-tier cities and below. The main products are cost-effective, and the main footwear products cover the low and medium price range of 200 yuan to 600 yuan.
Xtep's performance also hit a new high, with revenue of 14.346 billion yuan and net profit of 1.030 billion yuan, an increase of 10.9% and 11.8% year-on-year respectively. Founder and CEO Ding Shuibo said, "Our industry-leading position in the running sector continues to drive the Group's business growth. In December last year, the company announced the acquisition of Wolverine's interest in the 2019 joint venture and 40% of Saucony's intellectual property rights in China for US$61 million (about 440 million yuan). So far, it has wholly owned the operation rights of Saucony and Merrell shoes in Greater China.
Li Ning, which is rumored to be about to be privatized, saw its revenue increase by 7% year-on-year to 27.6 billion yuan, but its net profit fell by 21.6% year-on-year to 3.187 billion yuan, declining for two consecutive years. This was mainly due to factors such as the increase in the selling expense ratio. In the past year, the brand marketing has continued, and while continuing to cooperate with Xiao Zhan, it has also reached cooperation with the Times Senior Group, and held a China tour of the signing of stars Jimmy Butler and Dwyane Wade. This also led to a surge in advertising and publicity spending, which increased by 9.5% year-on-year to RMB2.596 billion, and its share of revenue increased by 9%, the highest since 2020.
Last year, ANTA achieved revenue of RMB62.356 billion, up 16.2% year-on-year, a record high, and net profit exceeded RMB10 billion for the first time, up 34.9% year-on-year to RMB10.236 billion. As a comparison, its revenue is equivalent to 2.26 Li Ning, 4.35 Xtep, and 7.41 361°, which is tens of billions higher than the sum of these three, and its net profit is almost twice that of the other three combined, and the growth rate is still in the leading position.
It is worth mentioning that Anta's gross profit margin reached 62.6%, an increase of 2.4 percentage points year-on-year and a record high. This is mainly related to the implementation of the DTC model (Direct To Customer) and the improvement of discounts.
By brand, ANTA's main brand revenue increased by 9.3% year-on-year to RMB30.3 billion, accounting for almost half (48.6%) of the total revenue, FILA's revenue increased by 16.6% year-on-year to RMB25.1 billion, accounting for 40.3%, and revenue of all other brands, including Descente and Kolon, increased by 57.7% year-on-year to RMB6.947 billion, accounting for 11.1%.
In the latest "2024 Hurun Global Rich List", Ding Shizhong, the helmsman of Anta, is the richest man in Xiamen with a net worth of 38 billion yuan. In addition, his elder brother Ding Shijia, sister Ding Yali and cousin Wang Wenmo are also on the list, with a net worth of 37 billion yuan, 12 billion yuan and 11 billion yuan respectively.
In terms of international brands. Lululemon, which focuses on yoga wear, is a dark horse that has emerged in recent years, and Chinese mainland has become its largest international market, accounting for 10%, an increase of 3 percentage points year-on-year, with revenue of about 964 million US dollars, a year-on-year increase of 67.2%. By the end of fiscal year 2023 (as of January 28, 2024), the number of stores in Chinese mainland reached 127, and half of the new stores opened here this fiscal year, with a net opening of 28 new stores.
Despite the poor global performance (revenue in euro terms fell by 4.8% year-on-year, the first annual loss in 31 years), Adidas' revenue in China performed well, with a year-on-year increase of 8.2% to 3.19 billion euros, especially in the fourth quarter of last year, which achieved a strong growth rate of 36.8%, and has achieved positive growth for three consecutive quarters. CEO Gulden said: "2023 is a turning point for adidas to return to growth in China", and expects to achieve double-digit revenue growth in Greater China in 2024.
In the third quarter of fiscal 2024 (ending February 29, 2024), Nike Greater China achieved revenue of US$2.084 billion, a year-on-year increase of 5%, maintaining six consecutive quarters of growth. EBIT (earnings before interest and taxes) increased by 3% to $722 million, making it the only region outside of North America to achieve positive earnings growth.
Write at the end
Since catching up with Adidas China in 2021 and surpassing Nike China in 2022, ANTA has further consolidated its top spot in China's sports footwear and apparel market. It is worth noting that Anta + Li Ning has surpassed Nike China and Adidas China combined, in other words, domestic companies have occupied a dominant position in the Chinese market.
2024 is a "big year for sports", with important events such as the Paris Olympics, the European Cup, and the Copa America, which also provides a big stage for major brands to show themselves.