Written by Li Jiaman
Editor|Yang Yong
Source | Produced by hydrogen consumption
ID | HQingXiaoFei
On April 30th, the FILA ICONA flagship store was grandly opened on this day, and the spokesperson Yang Mi came to the scene in person, wearing the same new Versailles collaboration. This is not only a simple "limited debut" press conference, but also an important symbol of FILA's brand image upgrade.
FILA, the century-old Italy sports brand, was once regarded as a "hot potato", but now it has become a "cash cow" under Anta.
ANTA's "buy, buy, buy" strategy has indeed achieved remarkable results in the short term.
But it is worth thinking about: will frequent mergers and acquisitions and resource integration also bring about the dilution of brand culture and the blurring of consumer cognition?
In three steps, ANTA acquired FILA
The first aspect to be optimistic about, that is, Anta's "integration" of FILA, is divided into three steps.
First of all, mergers and acquisitions have been effective. M&A is not only an exchange of funds, but also a deep integration of resources, culture and market, maintaining FILA's brand independence and injecting new vitality.
In 2009, Anta acquired the Greater China business of FILA, a century-old brand from Italy, for approximately RMB460 million. At that time, FILA did not have a firm foothold in the Chinese market, with an annual revenue of less than 100 million yuan and an annual loss of more than 30 million yuan.
In just over a decade, FILA has achieved an amazing transformation in the Chinese market. From a loss-making state in 2009, to a revenue of more than 10 billion yuan in 2018, and then to a revenue of more than 20 billion yuan in 2021, FILA has become an important growth engine for ANTA. According to the financial report released by Anta Sports, FILA achieved the annual target that exceeded expectations in 2023, with revenue reaching 25.1 billion yuan, a year-on-year increase of 16.6%, and net profit reaching 6.92 billion yuan, a year-on-year increase of 60.8%.
FILA's management also put forward a growth plan for the next three years: to achieve an average annual compound growth rate of 10%-15%, and to achieve a sales revenue target of 400-50 billion yuan within three years.
The second is the upgrading of brand positioning. Under the operation of ANTA, FILA has successfully transformed into a high-end sports fashion brand, and has continuously increased its brand influence and maximized its brand value through activities such as limited edition new products and celebrity endorsements.
FILA, the Italy brand born in 1911, started as a family-owned textile business. However, from the 70s, it gradually shifted to the production of sportswear and focused on the tennis apparel category. Over time, FILA continues to develop new product lines, covering almost all sports, from golf and fitness to skiing, mountaineering, basketball, and more.
ANTA has injected new vitality into FILA and clearly put forward the strategy of "returning to fashion".
ANTA Group launched a local celebrity marketing strategy, leveraging the influence of celebrities to enhance brand awareness and reputation. At the same time, FILA has also built a mature and efficient industrial chain, entering the second- and third-tier cities in a direct manner, and surrounding the first-tier cities.
In terms of design creativity, ANTA makes full use of FILA's design resources in Italy and carries out localized innovative design. In particular, FILA FUSION, a fashion line aimed at young people, is led by a local Chinese team that skillfully integrates Eastern and Western cultures to create unique fashion items. Yao Weixiong, president of FILA Greater China, once revealed to the media that FILA China's design team regularly visits the FILA Museum in Biella, Italy, to draw inspiration from it and work closely with international designers to ensure that the brand always maintains a leading position in design.
In terms of commodity structure, FILA's development in the Chinese market is also quite strategic. The launch of the three sub-lines of KIDS, FUSION and ATHLETICS has formed a clear product line structure for the children's wear, young people and professional sports markets respectively. This not only brings a broader market space for FILA, but also makes it stand out in the market environment where sports giants gather. With the help of Anta, FILA's channel expansion is also quite bold. With the help of Anta's traditional advantages, FILA has successfully entered the sinking market, opening a significant gap with similar European sports fashion brands.
FILA's performance in the footwear business is particularly eye-catching. The iterative upgrading of popular shoes such as cat's claw, fish sting, and Mars not only improves the performance of the product, but also leads the fashion trend.
In terms of marketing strategy, FILA is also flexible to respond to various challenges. For example, during the pandemic, FILA quickly developed a response plan and adopted a flexible and dynamic management approach. At the same time, seizing the opportunity of online traffic, he built his own live broadcast matrix on the Douyin platform, and formed a very good combination with the help of the current hot spots and the implantation of celebrities.
In recent years, FILA has also made great efforts to promote the commercial value of women's sports, officially launched the "FILA Latte Girl" program, and officially announced that Zhang Junning has become the spokesperson of fashion sports.
It is worth mentioning that FILA has also strengthened its high-end sports fashion positioning through cooperation and co-branding with global first-line luxury brands, emerging fashion luxury brands and Asian high-end outdoor fashion brands that are widely loved by young people, but also provides free extension space for China's local development.
The third is the help of scientific and technological innovation. FILA's introduction of cutting-edge fabrics and black technology has also provided strong support for ANTA's R&D system and the construction of intellectual property barriers.
This series of measures not only expands the light sports market, but also finds a new fulcrum for the sustainable development of the brand, and creates a "beautiful sample" for other companies to "acquire" the brand.
But now, from the perspective of product innovation, FILA's once popular "dad shoes" have gradually lost their market advantages, and the new series launched in the future have failed to trigger a market boom. At the same time, FILA's investment in R&D is relatively limited, which to a certain extent reflects the shortcomings of ANTA Group's R&D. Although Anta has announced that it will invest more than 1 billion yuan in R&D and innovation funds every year, the proportion of R&D investment still needs to be increased compared with international brands.
Can we find new growth points?
Looking at Anta's financial report data, Anta must be gratifying in terms of the proportion of FILA. But looking at the data "elongated and farther", the performance can only be regarded as mediocre.
Since 2015, FILA has gradually achieved breakeven and has become the growth engine of ANTA for a time. However, the good times did not last long, in the second half of 2021, the data showed that the current operating income reached 11 billion yuan, a year-on-year increase of 6.8%, but compared with the 25% growth in the second half of 2020, the speed has slowed down significantly.
The slowdown in revenue growth was mainly due to bottlenecks in both offline stores and online channels. Although FILA has successfully increased the monthly store efficiency from 485,000 yuan/store in the first half of 2018 to 703,000 yuan/store in the second half of 2019 by continuously expanding stores and improving scale effect, the risk of store expansion has increased sharply since 2020, resulting in FILA having to slow down the pace of expansion, and the total number of stores is basically flat.
Although the store structure was optimized by closing the low-performing stores and opening new ones, the benefits of the new stores did not compensate for the losses of the old stores. In the first half of 2021, FILA's monthly store efficiency increased to 911,700 yuan, and then began a downward trend.
At the same time, online channels are underperforming. According to the open source securities research report, in the second half of 2021, the year-on-year growth of FILA's GMV of sports shoes and apparel in Ali channels slowed down significantly. For FILA, which is positioned at the high-end, the deeper problem lies in the difficulty of monetizing brand equity. In the high-end sports brand market, consumers are usually willing to pay for product technology or brand culture, but FILA has clearly failed to impress consumers in this regard.
FILA's "past and present" data trend has also exposed Anta's three "controversial shortcomings".
First, the high-end market is a double-edged sword.
Reliance on the high-end market is like two sides of the coin, and over-reliance on the high-end market may cause FILA to miss out on a wider consumer base.
FILA's high-end positioning has brought it a loyal consumer base and considerable profits. Taking golf as an example, FILA has successfully created a series of high-end golf apparel with its in-depth understanding of golf and professional design, which has won market recognition. However, due to its over-reliance on the high-end market, FILA does not have a "profound cultural heritage" and cannot form a "luxury or aristocratic cultural barrier".
For example, in recent years, golf has gradually become a fashion trend in the Chinese market. FILA has keenly grasped this trend and sees the golf business as a new growth point. By sponsoring professional tournaments and signing well-known golfers, FILA has successfully linked itself to the game of golf and enhanced the brand's high-end image.
FILA also focuses on the expansion and upgrading of offline stores, and enhances the brand image by creating a high-end shopping experience. However, the barrier to entry for golf is relatively high, which also limits the audience reach of FILA. Secondly, the expansion of offline stores requires huge capital investment and refined operation management.
The second is the diversification of ANTA resources. ANTA has formed a multi-brand matrix through mergers and acquisitions and independent cultivation, but multi-brand management may lead to scattered resources and it is difficult to concentrate on building core brands. FILA faces the embarrassment of ANTA Group's internal positioning. With the continuous acquisition of high-end brands such as Arc'teryx and Salomon, FILA's position in the group has gradually blurred. Compared with the main brand, FILA lacks price advantage; Compared with the newly acquired high-end brands, its brand power is insufficient.
ANTA's multi-brand operation methodology focuses on "Mental Category Building" and "Retail Operation Excellence". Through the development of precision sports equipment, such as FILA's golf, tennis and running equipment. Through multi-brand layout and value building, ANTA has covered three core tracks, forming three growth curves of professional sports, fashion sports and outdoor sports. This layout may seem perfect, but every brand needs to invest a lot of R&D and marketing resources. Will the dispersion of resources affect ANTA's input and output in its core brands?
In addition, although ANTA's multi-brand retail operation capability is strong, it is also a major challenge to maintain and expand this advantage in today's increasingly competitive retail market in China, while helping newly acquired brands quickly build competitiveness in segmented fields and form their own growth engine. FOR EXAMPLE, ANTA'S LATEST ACQUISITION OF MAIA ACTIVE, ALTHOUGH IT HAS MADE UP FOR THE SHORTCOMINGS OF WOMEN'S SPORTS BRANDS, IT IS STILL UNKNOWN HOW TO SUCCESSFULLY INTEGRATE IT INTO ANTA'S MULTI-BRAND MATRIX.
The ability to operate globally and integrate resources is another major advantage of ANTA. With sales outlets, R&D and design studios and supplier networks around the world, ANTA provides strong support. However, operating globally also means higher administrative costs and a more complex market environment.
The third is the pressure of "new" market competition.
With the intensification of competition among domestic and foreign sports brands, will ANTA's multi-brand strategy continue to work? With the intensification of competition among domestic and foreign sports brands, FILA China's growth rate has slowed down, does this mean that its "fashion + sports" full coverage strategy has hit the ceiling? In the upcoming fourth five-year period, how can FILA go further in terms of strategy?
The slowdown in FILA China's growth rate does not go against the general law of market development. Under the increasingly mature and diversified Chinese consumer market system, new competitors are emerging in each segment. However, these new entrants often bring innovative ideas and differentiated products, which pose a considerable threat to traditional brands.
Deepen R&D and go to the road of brand advancement
Of course, looking at it now, Anta's localization layout of FILA is basically "a template", and it has achieved the maximization of "brand value". Review the localization of FILA, a brand that originated in 1911 in Biella, Italy, after a hundred years of vicissitudes, after Anta took over, it joined forces with many trendy brands to jointly create a series of high-quality products.
Digital transformation for ANTA and FILA is not only a technological innovation, but also an all-round reshaping of business models, market strategies and consumer interactions. Through intelligent supply chain management, ANTA is able to optimize inventory and logistics to ensure that products reach consumers quickly and accurately. Big data analysis helps ANTA gain more accurate insight into consumer needs and market trends, thereby guiding product design, pricing and promotion strategies.
In the past few years, brick-and-mortar stores have faced great challenges under the impact of the epidemic. However, through digital transformation, ANTA has channeled user traffic into the private domain and achieved more communication and interaction with customers. This not only enhances consumer stickiness, but also brings considerable profits to the business. At the same time, in response to the instability of the apparel industry's supply chain, ANTA has implemented comprehensive digitalization from the customer demand side to the management end and the supply chain side, and improved operational efficiency through informatization and intelligent technologies.
In terms of economic added value, ANTA's economic added value after digital transformation has shown positive changes, and in terms of innovation output, continuous investment in scientific research has brought many patents and core technologies to ANTA, and these intangible assets have brought the company to enhance its core competitiveness. In terms of customer stickiness, ANTA has not only increased member stickiness and loyalty, but also increased the repurchase rate of products through digital means to attract traffic and build a private domain traffic pool.
With the gradual saturation of the domestic market, after FILA "came in", Anta wanted to "go out".
In recent years, ANTA has continuously enhanced its international popularity and influence through cooperation with internationally renowned sports brands and sponsorship of international sports events. For example, ANTA partnered with NBA star Kyrie · Irving to launch the first signed basketball shoe ANTAKAI1. In addition, ANTA also actively sponsors international sports events, such as the Olympic Games and the World Cup, to further enhance the international recognition of the ANTA brand through exposure and publicity.
However, with fierce competition in the international market, with international giants such as Nike and Adidas dominating, Anta needs to find its own differentiated competitive advantage. Secondly, there are great differences in consumer needs and cultures in different countries and regions, and ANTA needs to deeply understand and adapt to these differences.
【Conclusion】
With the increasing pursuit of health, fashion and quality by global consumers, FILA's fashionable design and high-quality products are estimated to enable him to "ride the wind and waves".
At the same time, with the continuous advancement of technology and the rise of new media, ANTA has also used digital means to reach target consumers more accurately. Through big data analysis functions and online sales channels, consumer needs were clarified, and online platforms were used to promote sales.
In the future, ANTA is likely to continue to deepen the internationalization strategy of its matrix brands. Through in-depth cooperation with internationally renowned brands, increased investment in sports events and star athletes, and the use of digital means to improve marketing efficiency, we will further enhance our competitiveness in the international market.
In short, the localization of "imported products", Anta's combination punch is still worth learning.
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