Walk in the forefront of the trend and enter the first-line market

　　Domestic sports brands bravely compete for "gold medals" off the field

　　Our reporter Kang Pu

　　"People's Daily Overseas Edition" (10th edition on February 25, 2022)

　　14 years ago, at the Beijing Olympics, Chinese athletes wore Adidas when they received their awards.

At that time, compared with international brands, the gap between Chinese sports brands was not only in capital, but also in technology.

14 years later, in the Beijing Winter Olympics, Chinese sports brands such as Anta, Li Ning, Peak and other Chinese sports brands appeared together with athletes from all over the world.

Chinese sports brands have been catching up all the way and blooming brilliantly. The "foreign brands" of the Olympic Games have become history.

　　Since 2009, Anta and the Chinese Olympic delegation have been with each other, and they have gone through 3 Summer Olympics and 4 Winter Olympics together, created competition equipment for more than 20 Chinese sports teams, and used the hard power of technology to help Chinese athletes continue to refresh their achievements.

The story of Anta is the epitome of Chinese sports brands getting rid of cheap labels to achieve "counter-attack".

How did this domestic sports brand, founded in 1991, compete for the "gold medal" off the field?

　　From wholesaler to retailer

　　Time back to 2012.

　　This year, Anta’s turnover fell by 14.4%, and its net profit fell by 21.5% year-on-year. This is the first time that its performance has declined since its listing in Hong Kong in 2007.

Previously, Anta maintained rapid growth. From 2008 to 2011, its turnover increased from 4.627 billion yuan to 8.904 billion yuan, and its net profit increased from 895 million yuan to 1.730 billion yuan.

　　The problem that Anta encountered is actually the common dilemma of the sports brand industry.

That year, in China's sporting goods market, it was difficult for both local brands and foreign companies.

"There is a problem on the supply side. The industry has experienced several years of staking-style expansion. Brands rely on crazy store openings and advertising bombing to drive performance growth. Sometimes you can see several stores of the same brand on the same street." The key to Beijing Zhang Qing, founder of Dao Sports Consulting, said, "The brand side is caught in a homogeneous competition, and the product lacks features. If the logo is removed, there is no way to tell who owns the product."

　　Behind the extensive expansion is the hidden worry of peaking sales and weak growth.

Inventory was overstocked, revenue plummeted, store closures hit, and the crisis finally broke out.

According to statistics, in 2012, the total inventory of sports brands such as Li Ning, Anta, Xtep, and Peak reached 3.721 billion yuan.

　　How to break the game?

Anta believes that the problem lies in the business model.

"In the past, Anta was a wholesaler. It only sold products to dealers and dealers to consumers. As for how dealers operate and how consumers responded, the brand side did not know." Li Ling, vice president of Anta, said that from the distribution Businesses go through several layers of distribution and retailing to consumers, with a huge time lag in between. Consumers see new products, but they can’t buy them in time; companies are busy producing, but don’t know about market changes. “It is consumption that really drives market growth. We must be more consumer-oriented and connect more closely with them.”

　　Anta's idea is to transform from a brand wholesaler to a brand retailer.

The executives visited Anta's outlets in more than 500 cities and thousands of stores across the country, and implemented retail standardization and digitization one by one.

How to deal with inventory, how to display and price products, which used to be decided by local dealers and stores, has a unified standard.

　　In 2014, Anta's retail transformation bore fruit on the sales side: sales exceeded 10 billion yuan, taking the lead out of the inventory crisis, consolidating its status as a leading domestic sports brand.

　　Today, Anta's retail reform has not stopped, and the goal is to convert retail stores to direct brand management.

"This work starts in 2020. The direct sales model can help brands better understand consumer needs, cultivate private domain traffic, and better implement retail standards." Li Ling said.

The transition process was not easy, and that meant a re-slicing of the pie, "at a high cost, but it was worth it."

　　Create a brand matrix

　　The growing scale of Anta is still thinking about another thing: how to open up a world in the mid-to-high-end market with higher profit margins?

　　To enter the first-tier market, it is the most difficult to break consumers' existing impression of the brand.

Anta, which has grown from a shoe factory in Jinjiang, is difficult to achieve a major breakthrough in its brand image.

　　"It is also difficult for a single brand to cover the diversified needs of consumers, which requires precise positioning and clear division of labor among multiple brands." Li Ling said.

　　Anta set its sights on FILA.

This Italian brand, founded in 1911, is positioned in the mid-to-high end. It was once the third largest sports brand in the world. After entering the Chinese market in 2005, it was not smooth and suffered losses year after year.

In 2009, Anta acquired Fila's trademark use rights and franchise rights in China, and was responsible for the promotion and distribution of Fila's trademark products in Mainland China, Hong Kong and Macau.

　　Coming to Anta's hands, Fila regained its vitality.

In the first half of 2021, Fila's revenue reached 10.827 billion yuan, contributing nearly 50% of Anta's total revenue, and its profit proportion was even higher, becoming an important growth engine for Anta.

　　Acquisition is a high-risk matter, and Anta's successful transformation of Fila has become a model for the industry to learn from.

In the process of remodeling Fila, Anta's many experiences have also helped a lot in the transformation of the main brand.

　　"Our positioning for Fila is to follow the line of sports fashion. Although fashion is good-looking, it lacks sports attributes, and professional sports brands lack fashion sense. We use sports fabrics to make high-end sports fashion, which has a leading role in the market." Li Ling said, " The direct management of all brand stores is even more innovative, and all store employees are included in the company's roster, which is rare in the entire retail industry."

　　Since 2015, Fila's revenue compound growth rate has reached 56%, becoming the pillar brand of Anta Sports.

The successful operation of the acquired brand has enabled Anta to embark on the development strategy of "single focus, multi-brand and omni-channel".

The trademark rights and operation rights of the ski brand Descente and the outdoor brand Kelon in China have been successively acquired by Anta.

In 2018, Anta acquired Amer Sports, the world's third largest sporting goods group. The addition of its Arc’teryx, Salomon and other brands has enabled Anta to form a brand matrix covering professional sports, fashion sports and outdoor sports.

　　Today, Anta has about 20 sub-brands.

With so many brands, how to deal with the relationship?

　　Anta's thinking is very clear: emphasize differentiated management.

"Our advantage is the integration of the supply chain at the back end, the scale advantage of the group in production and logistics, and the different demands of consumers at the front end with different brand positioning, product innovation and retail models." Li Ling said , "Apparel brands will be affected by the life cycle, and the multi-brand strategy can stimulate new consumer demand in different consumption cycles and demand scenarios."

　　"Anta's various brands have clear positioning in terms of target groups, prices, categories, etc., which can attract consumers from the perspective of their own brands, make enterprises bigger and stronger faster, and form economies of scale." Zhang Qing analyzed.

　　"This kind of asset-heavy retail model requires not only good brands and products, but also channels and services. When the sports market is improving, it can quickly occupy the market segment, but when encountering market risks, you must pay attention to the financial pressure you face. ” said Cheng Weixiong, general manager of Shanghai Liangqi Brand Management Co., Ltd.

　　Strengthening the main brand is a must-answer

　　While Anta is developing its brand matrix, its old rival Li Ning has put more energy into strengthening the main brand.

In 2018, the "China Li Ning" series, which staged its "first show" at New York Fashion Week, attracted countless attention with the design of Chinese style and sports trend.

　　"China Li Ning" successfully injected a cardiac booster into the brand after testing the water.

Since then, Li Ning has landed on the international fashion week for many times, and has continued to launch co-branded models with major IPs to enhance its brand image through limited sales and limited store sales.

　　The target audience of "China Li Ning" series products is young, fashionable, and people with high spending power.

Today, the "LI-NING 1990" fashion sports brand stores with more niche target groups are also being launched offline.

Behind the continuous upgrading of the brand, the idea of ​​​​excavating the value of Li Ning's IP is clearly visible.

　　Anta also realizes that in order to achieve the goal of "becoming a leading world-class multi-brand sporting goods group", "buy, buy, buy" is not enough, and strengthening the main brand is a must-answer question.

　　The sports market has high requirements for professionalism and functionality, which is why a few leading brands dominate this market while the market concentration in other apparel fields is low.

"On the whole, local sports equipment brand companies already have advantages in channels, but there is still a gap in product research and development, and they are relatively weak in the competition of mid-to-high-end equipment. Domestic brands are struggling to catch up, but they still need to focus on marketing and channels. Increase investment in brands and products." Cheng Weixiong said.

　　"The core driving force for sports brands to achieve sustainable growth is products and brands, and the key to supporting Chinese brands to break through is not only scientific and technological strength, but also finding ways to intuitively present strength to consumers." Zhang Qing gave an example, "Nike's pioneering Digging a hole in the sole of the air-cushioned shoe is often referred to as 'opening a window', allowing the air-cushion technology to be visualized and winning the favor of consumers."

　　In September 2021, Anta held an innovation and technology conference for the first time, and the latest nitrogen technology midsole technology was unveiled in a high-profile manner.

Holding a press conference to "show muscles", electronic consumer goods companies such as mobile phones and computers often use this to announce new products and new achievements. Anta learns from this practice.

"Our core strategy is 'professionalism, brand up'. While introducing the technological content of products to consumers at the press conference, we can also convey the brand image of 'professional sports'." Li Ling said.

　　Another idea of ​​Anta is to apply the technology from the Olympic Games to products for the general public, so that scientific and technological achievements can benefit more consumers.

Anta has opened "champion stores" in first- and second-tier cities across the country, launching Olympic-quality professional sports products and the same leisure products for the national team.

The reporter came to the Anta Champion Store in Beijing Hopson Hui and found that many Winter Olympics-related products such as award-winning clothes and award-winning shoes were sold out or out of order, and many consumers still came to inquire.

　　The competition with international brands for the "gold medal" outside the arena is far from over, but Chinese sports brands are working hard to master more magic weapons.