Anta, A Local Sports Brand, Is Not Afraid To Compete With International Predators.

Same store sales growth is weak, orders will drop, profit margins are under pressure.

In the 2012 Olympic year, the local sporting goods manufacturers did not seem to have a good year. They were deeply troubled by the overstock after the Beijing Olympics. They had been discounted and cleared up, and all kinds of bad news poured in.

Anta and Lining have been competing for the mainland.

A brother's status, both in the mainland continue to expand stores, in 2011, Anta's business income reached 8 billion 905 million, and Lining's gap is only 25 million, in the performance of the obvious victory, but Anta sports chairman and chief executive officer Ding Shizhong does not seem to be too much reason to celebrate, he publicly said, half a year to 1 years, the industry situation is not optimistic, this has been verified at the order meeting in May, Anta in 2012 fourth quarter orders have double-digit decline, the total annual orders will be recorded in the annual total number of high unit percentage decline.

So what is the current predicament of the local sporting goods industry? Is it only a phased adjustment under the combined action of the economic cycle and the industry cycle? Or is the industry already facing a fundamental change? As an industry leader, how does Anta respond to the grim situation engraving? Ding Shizhong answered this candidly in an interview with the newspaper, showing the thoughts and responsibilities of the industry leaders between the lines.

Stick to the basic market

In 2011, the performance of local sporting goods listed companies slowed down and share prices fell sharply.

Lining's operating income has a negative growth of 5.2%, and the growth of your business revenue has dropped to 20.2%. Has the local brand entered the bottleneck of growth?

Ding Shizhong: in the second half of 2010 to 2011, many enterprises in the industry did have pressure, and the market was reflected. However, the market of Chinese sports apparel market was large, and the proportion of per capita expenditure and sales in clothing was obviously low in countries with well-developed standards and good sports atmosphere.

China's local sports apparel brand has been growing rapidly for nearly twenty years, with a period of adjustment of one to two years.

Of course, in the early stage, the industry is over competitive. During the adjustment period, some enterprises may get out more quickly, and the concentration of brands will be higher and higher. Some brands will do too much, some shops will go too far, and they will have to go through the inventory digestion period.

The industry adjustment will take two years to complete and there will still be many opportunities for powerful brand enterprises.

How many industries can eventually survive if the industry concentration is raised?

Ding Shizhong: in five years, there may be many surviving, but five of them can live well. I don't believe you walk.

Now there are dozens of brands, you live well, but look at the automotive industry, beverage industry, household electrical appliances industry......

Five of every industry can live well.

Adidas announced a quarterly report in 2012, China's market grew by 26%, and international brands strengthened the layout of the two or three line cities. Is it pressure on local brands to accelerate the adjustment?

Ding Shizhong: as early as 2008, the layout of international brands in the two or three line market is very complete. No city can see their stores, and the recent development efforts are almost the same as in previous years.

Between 2008 and 2011, there was little growth in international brands. The growth rate of domestic brands was quite fast. In 2008, sales of Adidas had reached 10 billion, while Anta's sales were only thirty or forty billion. In 2011, Anta's revenue was 9 billion, and the gap between Adidas and Adidas was not large.

However, some of the local brands have not been well controlled, and there is a certain pressure on the inventory. Discount sales promotion has caused the whole industry to follow up and produce a "Domino" effect, which is basically the situation.

We can not simply assert that the growth of international brands has passed the local brands according to the sales situation in 2011 and 2012.

Market share can prove everything, and the basic market of local brands has not declined.

Since 2008, we have been competing in the same market. The international brands in the first-line market are relatively strong. The two or three line market is stronger, and this pattern has not changed much.

The two or three tier cities are upgrading their consumption. Will the advantages of local brands not be reduced?

Ding Shizhong: to see the progress of local brands, this progress is faster than international brands.

First, several main sporting goods brands in China, the overall market share is larger than the international brands. The international brands except Nike and Adidas have basically not increased their market share. Second, the professional ability has been improved. In the past, the sponsorship of the professional sports teams in China was mostly carried out by international brands. For example, basketball players 90% wore international brands, and now 90% wore domestic brands. Third, the recognition of consumers is improving and the brand reputation is being precipitated. We have been doing market research, asking about Nike, Adidas or Anta, Lining, and 360 degrees. In the past, 10 people may 9 directly speak of international brands, and now this proportion is shrinking.

All these prove that the comprehensive strength of local brands is improving and consumer acceptance will be higher and higher.

Sports Sponsorship Resources, shops, supply chain and other aspects, domestic brands are basically at the same level as international brands. I dare say that China's clothing and apparel industry can compete with the world's predators in sporting goods.

Transformation of "retailers"

The 2011 Annual report shows that Anta has increased only more than 200 stores, much lower than in previous years. Will the growth rate continue to slow down in 2012?

Ding Shizhong: after 2008, local brands made use of the Olympic Games, and sales increased rapidly.

But the more we are optimistic, the more prudent we need to act.

Since 2008, many brands have problems.

The basic strategy of Anta in 2012 is to be prudent, safe and healthy. Our growth will maintain the basic level of an industry.

After four years of 2008 Olympic Games, it can be understood that it is a cycle. Moderate adjustment is normal.

2012 is the Olympic year. Shouldn't it be a year of strength?

Ding Shizhong: brand power does not necessarily represent the market.

Every big Olympic year, the opportunity to grasp well, the brand can be promoted, but do not think that the promotion of brand awareness, immediately can be reflected from the sales, the effect is gradually released.

After 4 years of rapid growth, what are the adjustments you need to make?

Ding Shizhong: management.

China's local sporting goods brand, the past development mode is basically "brand plus wholesale", that is, the first thing to do is to advertise the brand, then sell the goods to wholesalers, and think about the future from "wholesale" to "retail". The whole supply chain process must be considered.

Wholesale to retail, where are the essentials of change?

Ding Shizhong: if it is a "brand plus wholesale" mode, the point of view of the brand may not be considered by shops, only considering the needs of wholesalers. In the retail mode, we should take into account the situation of distributors under the jurisdiction of distributors. The demand of stores is more important than that of wholesalers.

In 2012, Anta will implement the IT integration project. By the end of next year, the IT system will basically cover 70%-80% shops.

All orders are taken by single store. The original order is wholesalers and franchisees ordering. Now 8000 stores in the country, 40% of the shops are dealers themselves, about 60% are franchisees, and the terminal management of franchisee stores must be strengthened. As the dealers themselves do, they require each store to order separately.

At the same time, under the traditional ordering system, the proportion of replenishment is relatively small. We are thinking about how to make the replenishment mechanism more flexible in the future.

Industry inventory pressure is so great, relying on the IT system, Anta should improve the reaction speed of service dealers.

Management differentiation

In the industry, some companies have suffered setbacks in brand pformation. Will Anta face similar risks during the adjustment period?

Ding Shizhong: the brand will eventually be put into operation. The essence of the operation of the brand is the ability to operate, for example, the same factory foundry Anta shoes, Anta at the same price to give them, some pairs of shoes can earn 10%, and some can only earn 3%, which is the differentiation of management ability, doing business, making brands are doing management.

The essence of differentiation is not only brand differentiation, but also the differentiation of business.

How to achieve business differentiation? This is a question of returning to business.

For example, as early as 5 years ago, we specialized in the design of professional design institutes in the United States, Japan and Korea. Anta can generate more money for advertising than any other company.

The most obvious possibility is that we use human differentiation. 90% of our employees are trained by ourselves. Maybe some 90% of enterprises need to rely on outside market, which is lower than the competitive brand in terms of manpower cost.

Is Anta differentiated in terms of products?

Ding Shizhong: differentiation is slowly taking shape. First, brand building is differentiated. Second, the professionalization level of products is improving.

The acquisition of FILA in 2009 is a trial run of your multi brand operation. How are you doing now?

Ding Shizhong: actually, Anta Kids and Anta life are two sub brands, not exactly the same as Anta's main brand.

Anta is a popular brand focused on professional sports. FILA should be a high-end brand, between life leisure and professional sports, and the two should be differentiated in terms of quality, target group, channel and so on.

I don't want FILA to make 1000 stores at once. It's impossible for us to choose 4 cities in Beijing, Shanghai, Guangzhou and Chengdu. Now there are more than 200 stores in China, all of which are the best shopping malls and shopping centers in China. Like the new world of Beijing, the domestic brands can't get in, but FILA still goes in and gets their approval. The price of Ping is the first and the price is 30% higher than the international sports brand. Why can we sell more 30%? The commodity must be better.

Are we still looking for opportunities for multi brand expansion?

Ding Shizhong: buying brands is not an opportunity.

In the future, Anta is a comprehensive company based on sports brand management and sports, leisure, fashion and multi brand operation.

When you come to this day, it is generally believed that you are strong in your personal learning ability. Is this talent or the habit you can cultivate after tomorrow?

Ding Shizhong: talking about learning ability, first of all, the dedication to the cause, the hobby, why do you want to learn? Because your career is here, so you have to continue to learn, constantly charging.

Where to recharge? First of all, you should pay more attention to your career and study insights. For example, when we go to the shopping mall, we will sometimes go to the brand that is not our industry, study other people's products, understand the trend of consumers' changes, and dress brands like you will look at them. Secondly, we should enhance our learning ability and make more efforts with the best players.

No matter business or individual is the same, they will have to work with the best players. I like to keep in touch with the talented people all over the world. I am not only limited to entrepreneurs or the industry, but also artists.