Anta Does Not Learn Nike As A Mass Market.

Since 2012,

The retail environment is bleak, and the clothing industry has never been out of the doldrums due to high inventories and closing stores.

Recently, Lining announced that the loss in the first half of the year was 550 million yuan due to the expansion of the direct selling network and the clearance of channel inventory.

While Shanghai and Hong Kong will open, we will chat with Anta chairman Ding Shizhong.

Does Anta's recovery represent the trend of the industry, or is it a case?

"Brand wholesale" leads to the whole industry dilemma.

Reporter: in 2012, the whole industry was in trouble. How did Anta get out?

Ding Shizhong: in 2012, when the whole industry was in a predicament, Anta was not immune to it. At that time, I had a long self review inside the company. I think there were two problems: first, the competition of homogenization; and two, the business model did not change.

At the earliest, the commercial mode of domestic sporting goods enterprises was actually "brand wholesale", and after the enterprises built the brand, they sold their products to dealers.

And do not bother to follow up the operation. This rough operation mode is used for more than ten years.

In order to solve these two problems of Anta, I propose that Anta should pform from "brand wholesale" to "brand retail".

Reporter: how to do it concretely?

Ding Shizhong: the specific pformation includes organizational structure flattening, mastering the retailer's sales performance and store inventory level, using ERP system to collect data, providing ordering guidance for retailers, strengthening retail discount policy, strengthening dealer's competitiveness and profitability, strengthening elastic supply chain management, optimizing the elasticity and efficiency of replenishment, and meeting the needs of product differentiation and seasonal main push products.

For example, in the past, Anta's R & D cost accounted for only one percent points of the cost of sales, but it reached four percent points in the first half of this year, nearly 100 million yuan.

This year, our gross profit margin has risen largely from the contribution of new products.

Reporter: high inventory is the focus of the industry's external criticism.

Ding Shizhong: the benefits brought about by the pformation are obvious. Although Anta still has 791 million yuan stock, the ratio of inventory to sales ratio (the ratio of inventory to sales is a reasonable index for detecting inventory) begins to decline.

At present, Anta's 4:1 is in a healthy state.

It should be said that too low inventory is not conducive to sales, healthy inventory level can ensure the needs of sales, and avoid large discount.

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Reporter: from semiannual reports, the total number of Anta brand shops is 7701, 56 less than last year, but the number of children's and fie brand stores is increasing.

Ding Shizhong: in Anta's pformation strategy, it is also important to adjust the number of shops, optimize and upgrade store structure, and enhance operational efficiency.

Over the past two years, Anta has closed more than 1000 stores, but the scale of retail sales has increased.

For Anta, what we used to pursue in the past is quantity. What we pursue now is quality.

Effective shop is the most important thing, invalid shop is not important.

Generally speaking, as long as the loss shop accounts for less than 20%, it is all right, and the figure of Anta is at a lower level.

Abandoning the CBA and signing the Chinese gymnastic team are all driven by market behavior.

Reporter: it is an important strategy for sporting goods enterprises to seek strong resources sponsorship rights and create brand image.

Two days before this year's earnings conference, Anta suddenly announced a comprehensive cooperation with the Chinese gymnastics management center.

This news is surprising. As a hot gold medal, the sponsorship of the national gymnastics team has been occupied by Lining for 23 years.

Ding Shizhong: in fact, at the end of 2013, the cooperation agreement between the national gymnastics team and the Li Ning Co expired, and the National Gymnastics management center began bidding abroad.

Lining, who has the priority to renew his contract, did not negotiate with the Gymnastic Center for the new cycle, which gave Anta the chance to negotiate.

Reporter: at that time, the competition with Anta also had many international brands, Anta won the victory, let the market full of "Anta into the Lining forbidden zone" and so on.

Ding Shizhong: sponsorship is not so complicated. It is just a kind of market behavior that matches the strategic objectives of the enterprise.

This sponsoring Gymnastics Center is market behavior. There are no other factors.

Two years ago, Anta gave up the 7 year extension of the Chinese men's Professional Basketball League (CBA).

At that time, the main reason why Anta gave up sponsorship of CBA was that the price of CBA bidding was too high, which made Anta feel that the input-output ratio was too low.

Reporter: signed the Chinese gymnastics team, the shareholders of the capital market are very concerned about the return of this investment.

Ding Shizhong: This is a long-term sponsorship, the impact on performance will not be so fast, but gymnastics is one of the best sports resources in China, I believe it will have a positive impact on the brand, and will enhance the brand income in the long run.

According to the strategic consideration of Anta, as long as it is possible to win the championship in the Olympic Games, it is the goal.

Especially the gold medal teams.

"Anta's core strategy is very clear, that is, focus on Chinese sports.

We hope that consumers can associate with Chinese sports and think of Anta.

Anta will be the mass market, and Nike will be finished.

Reporter: in a depressed environment, Anta is the first brand in the industry to achieve revenue correction. Does Anta's recovery represent the trend of the industry, or is it a case?

Ding Shizhong: Anta's recovery does not mean the recovery of the whole industry.

Not all enterprises can come out of the trough. In the short term, domestic brands will still face serious problems of homogenization and fierce competition.

But we also see that as the urbanization continues, the increase in the proportion of urban population will help to promote sports demand, and urbanization will increase the income of the people, and the future of sports goods will be good.

The market for sporting goods has been growing. For sporting goods companies, the key is to find the right position. In short, it is tempting not to follow suit blindly.

Domestic consumers are diversified, so there is room for survival as long as they identify their positions.

Reporter: many people compare Anta, Lining and Nike, Adidas and other international brands, hoping to become another Nike.

Ding Shizhong: I want to ask rhetorical question, why does China have a serious homogenization of all walks of life to a certain extent? The reason is that we have not found the gap.

If Anta is also an international brand to do OEM OEM, Anta will be finished. This is the way for the survival of the international brand.

My idea is very simple. International brand is the international brand market, and domestic brand is the market of domestic brand.

And the target market of Anta is the mass market. What the mass consumers are pursuing is the price performance ratio. Half of China's people can't afford to buy our products. How big do you think the space is?

The average 300 million people in the United States own 4.5 pairs of sneakers, but in China, this figure is only 0.5 pairs. The most popular sports shoes in Guangdong are only 1.2 pairs.

He said, "there are 1 billion 300 million people in China. If one of the 13 people buys Anta shoes, Anta can sell at least 100 million pairs, but now there is still a long way to go.

Reporter: give investors the prospect of Anta's next year's performance.

Ding Shizhong: Anta's gross profit margin and net profit in the second half of this year will remain the same as the first half of the year. Next year's performance will definitely be better than this year. I am confident.

I once asked a big shareholder of our company how to decide which stock to buy. He talked a lot about the model, but he didn't mention the key points.

To buy a company's stock, the first is to buy the industry, second to buy the performance, third, to buy the business mode, and the fourth to buy the team.

Anta is good in all four aspects.