China'S Sports Brand Is In The Best Stage Of Development. Where Is The Opportunity?

In the past few years, the state was committed to pforming China into a consumer economy.

Benefit from this.

After the Beijing Olympic Games, the expansion of domestic sports brands led to a three year slowdown in performance.

Now, they are looking for a more streamlined operation mode. By reducing storage network, developing network sales channels and government support, China sports brand is ready to enter into the whirlpool of competition again.

China's sports brand is in the best stage of development. Where is the opportunity?

According to Feng Dawei, an analyst with Clsa Limited, in 2008, Beijing hosted the Olympic Games. Some of the Chinese leading sports brands expanded wildly from 2007 to 2011, adding about 1000 sales points each year. However, they were hit by counterfeit goods and fast fashion brands abroad, and sales were much lower than expected.

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.

The liabilities of some large sports Brand Company in China are gradually decreasing.

Anta cut and shut down 900 stores nationwide from 2012 to 2013. At the end of last year, the net liabilities and shareholder equity ratio dropped to 61%, reaching its lowest level since 2007. Last year, the stock market rose by 6% on the basis of Hongkong's Hang Seng index down 28%.

The situation also improved. After three consecutive years of losses, it made a profit again last year.

In 2011, the company reduced 8255 stores to 6133, although the company's share price fell 30% in the past 12 months, but more than half of analysts raised the company's stock rating to "buy".

As of December 31st last year, the company's liabilities amounted to 524 million yuan in cash.

Bloomberg intelligence analyst Catherine Lim revealed that Anta has adopted the commercial strategy of the US sports brand, through store marketing and close attention to the commercial layout, and will make major initiatives according to domestic situation. For example, after China opened the second child policy, Anta launched the brand of children's wear.

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.

In February of this year, Anta announced that it would spend $150 million to establish a joint venture with Desanto, a subsidiary of Tokyo listed company, Descente Global Retail Limited of Japan, and Itou Tada, a subsidiary of Tokyo listed company ITOCHU Corporation.

Anta sees the chance to host the Winter Olympics in China in 2022, igniting the craze for Chinese skiing and grabbing market share.

In addition, Anta has become a costumes sponsor for China's Winter Olympic Games.

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

The five major local brands made up of Anta, Lining, XTEP, 361 degree and PEAK, with a total revenue of 31 billion 800 million yuan in 2015, including Anta's revenue of 11 billion 125 million yuan, has achieved the goal of breaking the 10 billion mark of China's local sports brand revenue. Before that, Lining's business performance in 2010 was the closest attempt.

Although Anta is away from

In 2015, there was a gap of 18 billion 190 million yuan in revenue in the Greater China region, but its operating income grew by 24% in 2015 and 20% 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.

Although still lags behind Nike and Adidas, the five major local brands are listed in Hongkong and occupy a certain share of the local market.

As long as these brands occupy the market of small cities outside Shanghai, Beijing, the two or three tier cities with gradually increasing consumption power have become the key to the recovery of brand sales. But at present, Chinese consumers spend far less on sports goods, so the government will also support the industry for a long time to ensure that the sports industry continues to expand.