Can The High-End Market Help Anta Run Faster?

According to the world clothing shoes and hat net, Jinjiang, Fujian, is known as "China Shoes Capital".

Sports is an unknown sports product company.

"We must support more domestic products, and our goods are no worse than other brands."

Anta sports Jinjiang

Shop manager Li Li told reporters.

As the winning side of the shoe industry "go to inventory war", Anta sports has made frequent achievements in recent years.

The 2016 annual report shows that Anta sports achieved 13 billion 348 million yuan in operating revenue and 2 billion 383 million yuan in continuing business profit.

The same brand from Jinjiang, Fujian.

XTEP international and noble bird net profit last year were only 400 million yuan, 520 million yuan and 290 million yuan.

Comparatively speaking, the income and profit scale of Anta sports far exceeds that of other brands.

Compared with Lining, an old rival, Anta is still in the air.

In 2016, at the same time improving the original running, basketball and leisure products, and accelerating the remodeling and optimization of fast fashion brands, Lining finally turned a profit.

In 2016, Lining's operating income was 8 billion 33 million yuan, with a profit of 250 million yuan.

Although this achievement has been the best achievement of Lining in the past five years, it is still not as good as its performance in 2011.

In the years since 2008, when the "Prince of gymnastics" Lining launched the "flying Apsaras" at the Beijing Olympic Games, Lining was still the leading brother in the industry from the scale of income.

Data show that from 2007 to 2010, Lining's income was 4 billion 300 million yuan, 6 billion 600 million yuan, 8 billion 300 million yuan and 9 billion 400 million yuan respectively.

In the same period, the income of Anta sports was only 3 billion 100 million yuan, 4 billion 600 million yuan, 5 billion 800 million yuan and 9 billion 400 million yuan.

At that time, Anta was still a chaser.

But in 2011, everything changed.

Data show that the sports industry listed companies such as PEAK sports, Lining and other listed companies in 2007 increased by more than 90%, and by 2008, the growth rate remained above 75%.

However, in the 2010 and 2011 years, the growth rate continued to move downward, and the growth rate of revenue dropped by 4.77% in 2012.

PEAK sports, Lining and other companies operating income and profit growth even showed a negative growth.

It can be said that the turning point of the industry's performance has arrived.

While Lining and other brands were weak, Anta sports began to exert their strength.

In 2011, Anta realized a profit of 1 billion 700 million yuan. In the same period, Lining's net profit was only 385 million yuan.

In 2012, Anta sports had a firm foothold.

In the same year, the profit of continuing operation was 1 billion 350 million yuan, while Lining suffered a huge loss. The loss reached 1 billion 900 million yuan, and the loss lasted until 2015.

The reversal of Anta sports and Lining's status has caught us off guard.

The reason behind it may not be that Anta has done the right thing, but that Lining has done something wrong.

Although it was said that before 2010, Lining's income scale was far ahead.

But in terms of profits, as early as 2007, Anta had surpassed Lining.

In 2007, Lining and Anta realized net profit of 470 million yuan and 530 million yuan respectively.

The main reason why Lining's income is huge but does not make money is directly related to "extravagance and waste".

Data show that the proportion of Lining's sales expenses to income has been at the highest level in the industry since 2006.

In 2011, its sales expenses accounted for 28.3%, of which advertising and marketing expenses amounted to 1 billion 567 million yuan, accounting for 17% of revenue.

In the same period, the sales expenses of Anta sports accounted for only 16%, and advertising and publicity expenses accounted for 13.7%, amounting to 1 billion 200 million yuan.

Since then, Lining's sales costs have always been higher than peers.

Lining can have such a large scale of income, which is directly related to its high promotion and sales expenses.

On the other hand, Lining's operation ability is quite general.

Based on the key indicators of inventory in the retail industry and the turnover days of accounts receivable, data show that in 2006, Lining's inventory and receivables turnover days were 69 days and 54 days respectively, while Anta was 41 days and 19 days respectively.

The shorter the inventory turnover time, the quicker the turnover of enterprise inventory is, and is considered to be a symbol of sales activity of retail enterprises; and accounts receivable turnover days represent the bargaining power of enterprises to downstream dealers.

The shorter the receivable turnover time, the quicker the repayment rate.

Compared to these two data, Anta sports are slightly better.

The number of stocks affected by Anta sports was much lower than that of Lining.

The data showed that before 2015, no matter how high Anta sports were in revenue, the number of stocks was much lower than Lining's, until the sharp decline in Lining's inventory in 2016 and higher than Lining.

Affected by this, Anta's average inventory turnover in 2005 -2010 reached 9.3%, compared with Lining's only 5.8%.

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It reflects exactly the difference between the two enterprises: the ability of inventory management.

In the 2010-2015 year, the sports goods industry has a profound impact on the inventory cycle.

In the early 2008 Olympic Games in Beijing, the industry was in a stage of rapid development.

Almost all sporting goods companies accelerate the expansion of enterprises through leverage.

Take Lining's number of stores as an example.

In 2007 and 2008, Lining opened 936 stores and 1012 new stores respectively.

By the end of 2008, Lining had opened 6245 stores and expanded in the next 3 years. At the end of 2011, there were 8255 stores.

The path of Anta sports is more similar. In 2007 and 2008, 608 stores and 1065 new stores were opened, and 9297 stores reached the end of 2011.

Around 2011, the industry cycle is coming.

The "great leap forward" style of opening shop directly led to the closing of stores in 2012, and the number of Lining shops was particularly serious.

Lining, who had the most previous inventory, used "rude" shop to clean up inventory, but the effect was not satisfactory.

In 2012, Lining closed 1821 stores.

Anta sports took a relatively modest way to clean up inventory.

In the same year, the number of shops closed by Anta was only 389.

In addition, Anta paid more attention to inventory cleaning and other issues, and expanded factory stores to sell stock shoes.

Reporters visited Anta's factory store in Jinjiang, and shopkeeper Zhu said that in recent years, Anta has sold its shoes for non seasonal products to factories at discount prices of around 70 percent off.

Besides, inventory management also makes Anta's shoe turnover more flexible.

Li Li said that stores would not bulk up their stores.

"In the past, the old way was to produce orders every quarter, and the factory would produce more according to the number of orders, so as to cope with the increasing demand.

If the dealer can't sell it, it can be returned to the factory in the past.

This is not the case now.

Now the quantity of the order will be produced and the dealer will not be allowed to return it. "

The reporter interviewed Anta's dealer and got the answer "not to return the order".

Anta sports and Lining's different business strategies in the face of market decline are another major cause of development and differentiation.

It is a fact that Lining is willing to throw money in the market.

But in the early days of the market downturn in 2011, Lining still decided to take risks and formulate a more radical strategy.

In May 2012, it threw 2 billion yuan to become the main sponsor of the CBA League. In October, it signed NBA superstar Dwyne Wade at a high price of 10 years and 100 million dollars. In December, the channel revival plan was launched, which is expected to cost 1 billion 400 million to 1 billion 800 million yuan, and nearly three yuan in three months.

It is easy to see that Lining adopted the international strategy of "going abroad and facing the world" in terms of market positioning.

Meanwhile, in 2010, Lining CEO Zhang Zhiyong took charge of a brand remolding campaign, including replacing the LOGO that had been used for 20 years, and changed the slogan "anything is possible" to "let change happen", and repositioning the customer base, calling out the slogan of "after 90 Lining".

Behind the internationalization and youth is the whole rise of brand pricing.

The price of clothing products has risen by more than 17.9%, and the advantage of price performance is no longer.

But in terms of product positioning, Lining has been swaying between "leisure" and "professional sports".

After a great deal of loss of the original 70 and post-80s old customers, Lining, who was bold in pformation, did not grasp the heart of the post-90s generation.

When Lining implemented the strategy of comprehensive change, Anta always focused on the middle end of the mass market.

Anta's basic strategy for opening a store is to open more stores in big cities and big stores in small cities.

At present, Anta accounts for 20% of its own outlets in the first tier cities, while the two or three line market accounts for 60%.

On the other hand, the development of high-end brands through the acquisition of international brands.

The annual report shows that in 2008, Anta launched its subsidiary brand ANTAKIDS to enter the Chinese children's shoes market; in 2009, Anta acquired the high-end brand FILA of Italy; in the same year, Anta established a joint venture with Desanto and Itou Tada, distributing exclusively Desanto products in the mainland region, and flagship skiing products.

On the other hand, the strategy of Lining and Anta is not the same as laying and decorating the store.

Anta's stores are very neat.

Shop assistant told reporters that this is a unified sixth generation store style, and stores in flagship stores have adopted the seventh generation of decorative style.

And Lining used in the channel construction is "direct shop + franchise store".

Most franchised stores are old in image, poor in operation and sales, resulting in a large backlog of over season products.

In recent years, Lining has realized this problem and is gradually closing the franchise store.

For high-end brands, Anta sports is not without ambition.

Li Li told reporters that Anta sports in the past two years or the middle end customers.

"In the past two years, the unit price of Anta has also risen, in fact, it wants to attract customers through the middle and end products, but now it still wants to go to the high-end.

Now our products are also made of high-end products such as air cushions and running shoes, but the market is still in the process of acceptance.

A few days ago, the announcement of financing issued by Anta sports also revealed the clue.

The announcement shows that Anta sports has recently received an official reply from the China Securities Regulatory Commission, which has approved the application of Anta sports to China's eligible investors to issue publicly traded corporate bonds whose total principal amount does not exceed RMB 3 billion 600 million yuan.

The proceeds from corporate bonds issued are intended to repay loans and operate as group general working capital.

It is speculated that Anta sports will issue a total of no more than 3 billion 600 million yuan of bonds, probably because it "stares" PUMA, like the acquisition of FILA from BELLE international, which will bring Puma revenues into its pocket.

This reporter interviewed Anta sports responsible person, did not receive a response.

The change of Anta sports and Lining reflects precisely the different risks faced by different enterprises in the face of industry changes and the opposite result of different measures.

Lining, who fully announced his return in 2016, has led the brand to turn around.

How to consolidate the position of Anta in the face of a comeback opponent will be a big challenge.

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