From The Five Major Domestic Sports Brands 2015 Earnings Report To See Such Clues.

The sales performance of sports brand is often regarded as a barometer of sports industry in the past.

Anta, Lining, XTEP, 361 degree, PEAK have announced the 2015 earnings report, and we can find some signs of industry change from these 5 earnings reports.

Compared with the current hot sports industry in China, the Chinese consortium's big acquisitions of upstream IP and the fierce competition among the major platforms for rare copyright, the sports shoe and garment industry, which is in the lower reaches of the industry, has been very calm in this field.

In 1989, the first pair of PEAK sneakers went public, and by 2015, Anta's annual business income exceeded 10 billion. China's sports brand actually has a history of 27 years.

From the toddler to the competition and the pformation, the Chinese footwear industry is becoming more mature and has much to do with the monopolies, the pursuit and the ups and downs that they have experienced.

Globally, sports Brand Company are changing from purely sporting goods manufacturers to sports technology companies, sports marketing companies and sports sponsors. The revolution from the lower reaches will affect every move of the upstream industry at any time.

With the announcement of the 2015 earnings report of several major sports brands in China, such as Anta, Lining, XTEP, 361 degree and PEAK, we can find some signs from the earnings report.

1, the five major local brands have an annual turnover of 31 billion 800 million yuan.

The total revenue of the five local brands in 2015 amounted to 31 billion 800 million yuan, of which Anta's revenue amounted to 11 billion 125 million yuan, which achieved the goal of breaking the 10 billion mark of China's local sports brand revenue. Before that, Lining's 9 billion 400 million business achievement in 2010 was the closest attempt.

Although Anta has a gap of 18 billion 190 million yuan from Adidas's Greater China in 2015, its revenue growth in 2015 was 24%, which was 20% higher than that in two consecutive years.

It is worth noting that since Lining himself replayed Lining, Lining first realized profits in 2015, and its operating revenue grew from 3.6% in 2014 to 17% in 2015.

2, the average gross margin of the five major local brands is 43%, and the average net interest rate is 11%

In 2015, the average gross profit margin of the five sports brands reached 42.68%, the average net interest rate was 10.99%, and the net profit amounted to nearly 3 billion 500 million yuan.

Anta and Lining did better in cost control, with gross margin reaching 45%, similar to Nike and Adidas (48.3% in fiscal year 2015).

In terms of net profit margin, Anta is the highest. Lining has made a profit for the first time since 2012 (although only 0.2%). PEAK, XTEP and 361 degrees have similar net profit in 2015, about 12%.

3, Anta is widen its gap with other rivals.

Judging from the development in the past 5 years, the five companies in the 2012-13 years are closest to each other, but in the 2014-15 years they began to split up. Anta started to compete with other rivals in terms of revenue and net profit.

These 5 years are also the stage of China's sports brand pformation.

Most of China's sports brands began to build overseas brands as OEM foundries at the early stage of their development, which is why the Chinese sports brands were born in Jinjiang, Quanzhou and Putian of Fujian.

Over the past 20 years, advertising on TV and selling products wholesale to dealers have led to the competition of companies. The competition of companies often stays at the number of stores. Even so, the Chinese consumer market, whose consumption demand has not yet been upgraded, and the functional demand of sporting goods is more than the demand for brand image and product design, is still full of brands. Ding Shizhong, chairman and CEO of Anta board, has been called "an era of making money with eyes closed".

The 2010-11 year is a turning point, and the sports industry bubble has disappeared.

In 2012, Anta and Lining closed nearly 1000 stores in a single year. By 2013, five sports brands totaled up to 2 billion 940 million of the "hard to digest" inventory, making the sporting goods manufacturing industry overwhelmed by the fast moving industry.

4, from shop expansion to upgrading store efficiency

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Before the 2008 Beijing Olympic Games, the number of shops, stores and dealers at all levels began to peak in 2011.

The crazy expansion caused the main inventory to be concentrated in the channel, and the pressure of the inventory faced by the channel business is far greater than that of the brand dealer.

Blindly placing and opening stores makes the inventory turnover days of each brand and its dealers increase significantly, resulting in an unfavorable situation of pressure and unsalable sales.

Also because the main inventory pressure on the channel, so that all brands can not feel the market response in time, finally, the whole industry downturn in 2012, and the increase of rigid fees such as store rents and labor wages became the last straw in the pformation of local sports brands.

In 2012, local brands began to deal with such measures as shrinking management and closing down inefficient stores, but the store was closed, and the inventory in the store remained unsolved.

Li Ning Co suffered a 2 billion loss in 2012.

As of 2015, we can see that the "clear stock" campaign of major brands is still continuing, but the trend of the number of stores has basically leveled off.

The strategies diverged in 2015, though Lining expanded its sales outlets for the first time since 2011, adding direct outlets.

Anta and XTEP continue to reduce the number of stores.

From the result, Anta and PEAK have gained a rapid increase in the average benefit of single store in the past year.

As the industry gets warmer, orders increase and industry concentration increases, the adjustment of the sporting goods industry since 2012 has basically ended. The era of competition and scale of major brands has become a historical trend. China's local sporting goods industry is entering a new era of competition and homogenization.

The number of days of inventory turnover is the number of days that a company starts from acquiring stock, until it consumes and sells, representing the speed of inventory realisation.

The average turnover date of trade receivables is the account period, that is, the time when the company receives the corresponding accounts after the goods are sold out wholesale.

Anta's performance in 2015 represents the pformation path of local sports brand from new store expansion mode to upgrading store efficiency.

It is precisely these fine management capabilities and integration of the supply chain that enable them to lead other competitors in a number of financial data.

Anta's inventory turnover days in 2015 were 58 days, an improvement of 0.17 days from the same period last year. The group accounts receivable also improved. The turnover days of accounts receivable decreased by 1.84 days to 33 days compared with the same period last year. Two data showed that Anta and its dealers' inventory and repayment pressure had stabilized.

In operation and management, Anta first cancelled the sales area, its organizational structure was flat, the proportion of Direct stores increased year by year, and category management improved from the classification of shoes and clothing to items, such as running, basketball, football and so on.

Anta has achieved ERP coverage in most stores across the country, pushing single store orders to shorten production cycle.

5, category structure is still relatively simple.

Compared with Adidas, the domestic sports brand has a single product structure and a high proportion of shoes and garments, except for Lining.

Sales accounted for more than 95% of the total sales.

Lining's product sales structure is mainly due to Lining's good cultivation of badminton and table tennis market.

In the aspect of badminton, we bought a professional badminton racket to sponsor China national badminton team, SUDI man cup, world championships and China open.

In table tennis, its "red double happiness" brand has signed a large number of national players as equipment suppliers for the world cup, the world cup and the 2020 Tokyo Olympic Games.

In the 2015 annual report, Anta also disclosed that it would establish joint ventures with Desanto, a subsidiary of Tokyo listed company, DescenteGlobalRetailLimited of Japan and Itou Tada, a subsidiary of Tokyo listed company ITOCHUCorporation, in order to operate exclusively in China, excluding Hongkong and Macao, and engage in the design, sales and distribution business of all categories of products with "Descente" trademarks.

"Descente" will open the way for Anta to enter the Chinese ski market.

At the end of 2015, Anta completed the acquisition of outdoor leisure and mountaineering brand Sprandi (Sprang Di). In 2013, Li Ning Co also authorized LI-NINGADVENTURE outdoor brand LI-NINGADVENTURE to the team of former Lining people in Hunan.

But with the national fitness campaign and the Winter Olympic Games approaching, there is great room for development of our local sports brands in skiing equipment and outdoor areas.

As early as in 2013, the 361 degree portable hand focused on cross-country and winter sports Finland brand OneWay to form a joint venture, although the performance has not been achieved, but early layout will help to take advantage of the market segments.

6, begin to work hard in the market for children and women.

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With the relaxation of the "two child" policy, the demand for Chinese children's clothing and children's shoes will usher in a new round of development in the coming years. The market has great potential for growth, and all brands will cut in early to seize the children's market.

The 361 degree children's wear brand, which started in 2009, now has 2350 stores. In 2015, the income increased by 16% to 589 million yuan, accounting for 13.2% of the group's total income.

The Anta children's sporting goods store, launched earlier than 361 degrees, is the first local brand to enter the market. It grew rapidly in 2015 and reached 1458 stores.

In addition, Anta sub brand FILA has opened 50 FILAKIDS stores to target high-end children's clothing market.

The policy dividend makes the children's market not to be belittled, and XTEP has developed a smart tracking shoe for children's positioning.

And by attaching importance to the children and women's market, the battlefield from the sports brand is turning to the women's sports product line, which is also the pursuit of Adidas in the Chinese market.

Important strategy.

By sponsoring endorsements from world-renowned women tennis players, PEAK sponsors Wuhan tennis open, Zhuhai elite and WTA Singapore year-end finals to increase competitiveness in women's sporting goods market.

A more fractionable market will lead to greater profit margins, and local sports brands are making efforts in the market for children and women.

7. XTEP has the highest proportion of advertising input.

In the advertising and promotion costs, XTEP has the highest proportion of investment, focusing on the dual marketing of sports and entertainment. While cultivating marathons, the sponsorship of the National Collegiate Football League, "up to day" and "running brothers" are among the most popular among young people.

Lining, who has always been criticized in sports marketing, seems to be cautious after changing the slogan "anything is possible". The investment in advertising has been greatly reduced, and the annual sales expenses have dropped by 1.6% compared with the same period last year, and the proportion of sales expenses in revenue has dropped by 7.3 percentage points over the same period last year.

In the past 5 years, Lining has invested a lot in advertising and marketing expenses, but the assessment is not satisfactory enough.

In 2015, Anta signed the national team captain Zheng Zhi and became a strategic partner with the Jiangsu Sports Bureau and Hengda football school, and officially entered the football market.

In terms of R & D expenses, it has been designed to imitate foreign brands and homogenization is serious. In the past, rough management also made local brands do not attach importance to R & D capability. Although Lining and Anta set up their headquarters in Portland, Nike, Adidas and UA in 2007 and 2015, with a view to learning advanced design concepts and recruiting excellent designer shoes, local brands still far away from the huge success achieved by international giants in the combination of sports and technology and new materials.

The introduction of Lining's intelligent basketball and intelligent football, serving the self-training and data collection of trainers, is a new breakthrough made by domestic brands to sports and technology.

In the era of sports brand moving towards technology companies, and paying more attention to the era of individuation, although local brands have tried, but being limited to their own resources and strength, following and learning may be the safest choice.

8, the label of "China's local brand" is still very strong.

The 2016 is the sports year. Every brand has made enough preparations in 2015. 361 degrees, as the sports brand that continuously sponsored the international comprehensive sports meet in recent years, became the official two level sponsor of Rio Olympic Games in 2014. All the torch bearers, volunteers and technicians' shoes and clothing were provided.

At present, 361 degrees have 116 and 415 stores in the United States and Brazil respectively.

As the most favorite overseas market in China, PEAK has also achieved the exposure of the brand in the Olympic year by sponsoring sports delegations, national teams and athletes.

Earlier in 2011, PEAK became the FIBA global official holiday sports partner and FIBA's exclusive official clothing partner in the Asian region and sponsored the Stankovic cup intercontinental basketball tournament, which has been sold in over 90 countries and regions.

In the domestic sports brand, PEAK has the highest overseas income, but compared with the regional revenue structure of the international brand Adidas, the label of "China's local brand" is still very strong.

9, the degree of concentration of industry brands is getting higher and higher.

The two sporting goods giants Nike and Adidas have obvious advantages, and the market share has been over 24% for three consecutive years.

China's sports footwear market CR8 increased from 39% in 2007 to 51% in 2014. China's sports brand market was pformed from low concentration competition to low concentration and oligopoly.

Under the oligopoly of core markets such as soccer and basketball, Adidas and Nike monopolize the market, seize the oligopoly market and seize the new consumer market with the strategy of price differentiation.

CR8 interpretation: the industry concentration rate (CRn index) refers to the proportion of the largest n enterprises in the industry accounting for the total market share of the total industrial market.

The industrial market structure is roughly divided into two categories: oligopoly type (CR8 > 40) and competitive type (CR8<40%).

Among them, oligopoly was subdivided into high oligopoly (CR8 > 70%) and low concentration oligopoly (40% or less CR8<70%); competition type was subdivided into low concentration competition type (20% CR8<40%) and dispersed competitive type (CR8<20%).

10, summary

In the 2015 annual report of the five companies, we often see the words "change" and "mission". If 2015 is the capital year of China's sports industry, it symbolizes that the Chinese sports industry has entered a new period of rapid development. Then 2015 is also the turning point of the development of Chinese Sports brand. From the horse racing enclosure to the intensive cultivation and the store efficiency, from the pure sporting goods production to the sports technology exploration, the 2015 of China's sporting goods market is not only a breakthrough in turnover, but also a turning point in the profits of the company. What's more, the sports brands begin to segment the market and find their breakthrough points to try to break through the homogenization operation.

In China's sports industry, the sporting goods industry is in the lower reaches of the industry. There is still a long distance from the mature industry with complete category, group segmentation and perfect market structure, but it is still the largest piece of cake in the sports industry.

It can be said that looking at the earnings of the five major brands in 2015, compared with the bright spot of the figures, the growth of the industry seen from it is more important.