In 1978, the classic movie "Game of Death" starring the famous kung fu movie star Bruce Lee was released, and in that classic fight sequence, Bruce Lee wore a yellow jumpsuit and stepped on golden tiger claw pattern onitsuka tiger shoes, leaving a classic screen image in film history.
Bruce Lee was a big fan of the Onitsuka Tiger brand, and at that time, whether it was for movie shooting or daily training, he liked to wear the Onitsuka Tiger.
With the passage of time, the Onitsuka Tiger brand and its parent company Asics have also gained a large number of fans in the Chinese market. According to ASICS' 2024 financial report, the group's net sales reached 678.5 billion yen (about 33 billion yuan), a year-on-year increase of 18.9%.
Sales in the Chinese market are growing rapidly. From fiscal year 2022 to fiscal year 2024, the net sales of ASICS in the Chinese market will be 62.4 billion yen (about 3.03 billion yuan), 77.615 billion yen (about 3.77 billion yuan), and 100.498 billion yen (about 4.88 billion yuan) respectively, showing a linear growth trend. In fiscal 2024, China will become the third largest market for ASICS in terms of sales, with Europe (net sales of 179.3 billion yen) and North America (net sales of 135 billion yen).
For sports brands, the importance of the Chinese market cannot be overstated. According to the "Outdoor Industry Research Report" released by Shanghai Securities, the penetration rate of outdoor sports in China is only 28%, which is still a large room for growth compared with the penetration rate of more than 50% overseas. In addition, according to data released by the General Administration of Sports of China, the total size of China's outdoor sports industry is expected to exceed 3 trillion yuan by 2025.
China's trillion-dollar outdoor sports market and high growth space have attracted many international giants to pour in, and ASICS is one of them. In the fierce competition in the industry, how did ASICS rise? In the era of the rise of many international giants and domestic products, what kind of survival rules did ASICS find in the cracks?
Attracting 30 billion yuan a year, running shoes are the revenue engine
In the 2024 fiscal year, ASICS delivered a stellar report card.
According to the financial report, ASICS' net sales reached 678.5 billion yen (about 33 billion yuan), a year-on-year increase of 18.9%; The annual operating profit exceeded the 100 billion yen mark for the first time, a year-on-year increase of 84.7%; Net profit increased by 80.9% year-on-year to 53.8 billion yen (about 2.6 billion yuan), and all financial indicators hit a record high.
ASICS's high growth is in stark contrast to other sports brands. In the case of Nike, Nike Group revenue in fiscal 2024 was $51.4 billion, up 1% year-on-year on a constant currency basis. It was Nike's slowest annual sales growth since 2010. Nike's net profit for fiscal 2024 is $5.7 billion, a year-on-year increase of 12%, which is far less rapid than ASICS.
In terms of business areas, ASICS divides its business into five major segments, namely performance running (P.RUN, i.e., running shoes), core functional apparel business (CPS, including tennis, volleyball, table tennis, badminton, etc.), apparel and equipment business (APEQ), sports fashion business (SPS) and Onizuka Tiger (OT).
Among them, the performance running business has always been the core pillar of ASICS, and it is also the foundation of ASICS. In fiscal 2024, the business generated revenue of 326.9 billion yen, up 14.3% year-on-year, contributing 48% of the group's revenue.
The stable performance of the performance running business is inseparable from ASICS's leading technology - GEL cushioning glue technology. According to ASICS, GEL cushioning glue is a jelly-like gelatinous material, which can improve the comfort of running and the softness of the sole, so as to play a role in cushioning and protection, and the foot feeling is "stable and elastic", and the GEL series of running shoes has also become the revenue engine of ASICS.
In 2024, the sports and outdoor industry will set off a retro trend, which has also brought good sales of ASICS GEL series running shoes. According to the ASICS Tmall flagship store, the sales of a variety of GEL series running shoes have exceeded 100,000 orders. According to the transaction information on the Dewu platform, more than 33,000 people have purchased the GEL-KAYANO 14 retro shoes. At the release of the interim financial report for fiscal year 2024, Gao Kai, President of ASICS China, mentioned, "The data presented in the financial report can indeed see that the millennial retro trend has a certain role in boosting the sales of trendy lifestyle products. ASICS will increase its investment in running shoe products in the future."
In terms of net sales, in fiscal 2024, after the performance running business, the sports fashion business and the Onitsuka Tiger business grew strongly, becoming the other two pillar businesses, and the net sales of both businesses have approached 100 billion yen.
Specifically, the sports fashion business contributed 98.4 billion yen in revenue, a year-on-year increase of 66.1%, and the profit margin was 27.3%, 7 percentage points higher than the previous fiscal year; The Onitsuka Tiger business contributed 95.4 billion yen, up 58.3% year-on-year.
The other two businesses, core functional apparel sales, increased by 9.0 percent with sales of 78.6 billion yen, mainly due to sales growth in Europe and Southeast Asia and South Asia. Sales in the Apparel & Equipment business were 38.0 billion yen, with net sales up 5.2 percent, mainly due to sales growth in Europe, and a significant increase of 333.2 percent, mainly due to improved gross profit margins.
Generation Z bought ASICS's 100 billion revenue
"Into the pit of Asics, it's too versatile." "More than 300 wins, dressing is effortless." "ASICS allowed me to discover the New World of Retro."
In the sports and outdoor market in the past two years, retro, Y2K and other dressing styles have become a trend, and on social platforms such as Douyin and Xiaohongshu, the recommended content of "retro running shoes wear" has almost become a traffic password, and ASICS, which has simple lines and classic patterns, has taken advantage of this trend and become one of the main brands of bloggers.
These Generation Z have also bought ASICS's high-growth performance in the Chinese market.
In fiscal year 2024, ASICS' sales in the Chinese market exceeded 100 billion yen, achieving a rapid growth of 29.5%, becoming the second largest growth market, and the fastest growth rate was in the Southeast and South Asia regions, achieving a high growth rate of 37.6%; In the Chinese market, ASICS' operating profit increased by 47.5% to 19.3 billion yen in fiscal 2024. Operating margin reached 19.3%.
ASICS' success in the Chinese market is inseparable from its localization strategy.
In 2019, ASICS established a China R&D center, mainly to develop products for the local market in China. For example, in response to the common situation of Asian people's wide feet, ASICS has launched a "wide last" to solve the problem of fit.
In addition, there is the TECH PLUS technical fabric series, which also comes from this R&D team. The fabric series includes D.Fresh technical fabrics that are sweat-resistant, sweat-absorbing and quick-drying, and AAA antibacterial, and 7D ultra-thin graphene fabrics with thin breathability, sunscreen and ultraviolet resistance. Adaptive fabrics with functions such as ice cooling, sweat and stain resistance. According to the different characteristics of these fabrics, ASICS has also subdivided product lines such as protective and cushioning.
ASICS also mentioned in its earnings report that its growth in China was due to the production and development of products based on local demand.
In addition to targeted research and development of products, ASICS also keeps pace with the times in marketing and actively promotes the channel development strategy of online and offline integration. Offline, different types of stores with high specifications have been created; Online, we will cooperate with Tmall Little Black Box and other platforms to hold new product launch conferences to expand our influence.
In addition, ASICS is also sponsoring various local competitions in China. For example, it has become the official strategic partner of the 2025 Chengdu World Heritage Marathon, the sponsor of the "Shanghai 10km Classic", the official sponsor of the "Shanghai Rolex Masters" tennis tournament, and also launched the "Chinese Runners X ASICS Speed Breaking Camp" activities, "ASICS Youth Tennis Tour" and other events.
These high-quality events have not only helped ASICS to consolidate its position in the hearts of professional consumers, but also further expanded its influence among popular sports enthusiasts and accumulated brand equity.
Onizuka Tiger turned over, the most profitable sub-brand
"What is the relationship between Asics and Onizuka Tiger?" On social platforms, many consumers have raised questions.
Judging from the founding time, Onitsuka Tiger is in the front, and Asics is in the back. In 1949, at the age of 32, Kihachiro Onizuka founded the Onitsuka Tiger brand, which initially produced basketball shoes, but due to poor sales, it turned to the development of running shoes, and in 1951 launched the first pair of running shoes "Tiger" series.
In 1953, Japanese athlete Shigeki Tanaka won the Boston Marathon in the Onizuka Tiger running shoes, which immediately raised the brand's international popularity. Later, at the 1964 Tokyo Olympics, Onitsuka Tiger once again launched the RUNSPARK spikes, establishing the recognizable "Tic-tac-toe" logo, which completely launched the brand's reputation.
There is also an episode at this time. At that time, the American Phil Knight noticed the Onitsuka Tiger and wanted to sell its products to the United States, so he and William Bowerman (William Bowerman) each invested $500 each to establish the Blue Ribbon Company in 1964 as an agent for the Onitsuka Tiger, and these two Americans, who were later the founders of the sports giant Nike.
During the introduction process, Bowerman noticed that Onitsuka Tiger's Mexico 66 running shoe was a little inadequate, so he added a midsole, and Onitsuka Tiger agreed with this design, which led to the production of the famous Onitsuka Tiger Cortez. In 1971, after participating in the design of the Onitsuka Tiger running shoes, Le Cordon Bleu jumped from an agent to a manufacturer, began to produce its own running shoes, and redesigned the logo, inspired by the Onitsuka Tiger running shoes, and designed the Nike's "Forrest Gump Shoes" that would later become famous.
In 1977, Onitsuka Tiger merged with sportswear and merchandise manufacturer GTO and sportswear manufacturer JELENK to form the ASICS Group, and Onitsuka Tiger changed its name to "ASICS" and briefly disappeared from the attention of consumers. However, the integration of ASICS, GTO and JELEINK was not smooth, but had different business philosophy, and finally parted ways. Onitsuka Tiger also resumed the brand name at this time and separated out.
However, within a few years of the "disappearance" of the Onitsuka Tiger, the sports market turned to the professional era, and the retro casual Onitsuka Tiger lost the market and had difficulty in operating. It wasn't until 1999 that ASICS acquired Onizuka Tiger and repositioned it as a sports fashion brand, which was relaunched in 2022.
Fashion is a cycle, and the sports and outdoor market is no exception.
In recent years, with the popularity of retro style, the performance of Onizuka Tiger has also skyrocketed. In fiscal 2024, Onizuka Tiger will have sales of nearly 100 billion yen and become the "profit king" of ASICS Group in 2024 with a net profit margin of 34%.
According to the latest Big Facts trend report released by StockX, a well-known trend trading platform, the growth of the Onitsuka Tiger brand is particularly significant in 2024, with the transaction volume of its Mexico 66 shoes increasing by 845% year-on-year. In addition, the most searched shoe type, Onitsuka Tiger Tokuten, is in the top five, with a 2,607% increase in searches in the third quarter of 2024 compared to the same period in 2023.
When Nike's footwear business grew sluggishly and Adidas struggled with the aftermath of Yeezy, ASICS tore up a new track with the double helix strategy of "building the foundation of the main brand technology + breaking the circle of the Onitsuka Tiger trend".
But the crisis is also surging, HOKA, Saucony and other new forces are eyeing the tiger, ASICS's next step may be whether it can continue to maintain the fundamentals, and break through innovation, and seize every trend of the times.