The Acquisition Of Amer Is Only The Beginning Of Anta Value Investing.

Background

In 1999, the Fortune Global Forum was held in China for the first time. The slogan of the conference was "to dominate the world and compete with China first".

20 years later, China has become the second largest consumer and importer in the world.

In the next five years, China's commodity market will rank first in the world, and China will import more than 10 trillion dollars of goods and services.

China's importance to multinational corporations is increasing.

In 2018, BMW group contributed more than 1/4 of new cars sold in China.

More and more multinational companies set up headquarters in Asia or Asia Pacific region in China, and even become the second largest markets in the world except many of their local markets, especially in the consumer goods industry, retail industry, sporting goods industry and so on.

20 years ago, multinational corporations put forward the slogan of "Think global, Act local".

In China, successful multinationals have followed such a path.

When multinational companies compete in China, local companies born in China are also competing for the world.

One of the ways is to acquire international brands and enter the high-end market.

The latest case is Anta group.

In March 12th, Anta sports (2020.HK) issued a notice that the acquisition of Amer Sports (hereinafter referred to as Amer) has been approved by the competent authorities of various countries. At present, 94.98% of Amer's shares are accepted by the tender offer (according to the latest April 12th bulletin, which has reached 98.10%), and the total paction amount is 5 billion 600 million euros (the final total cost accounting).

Amer has Canadian outdoor equipment brand Arc'teryx, American ball equipment brand Wilson, Austria ski equipment brand Atomic and so on.

The completion of the acquisition will not only help to enhance the development of Amer in China, but also expand the territory of Anta group to the major markets in Europe, the US and the Asia Pacific region.

Ding Shizhong, chairman and CEO of Anta group board, said: "the success of the offer enables us to work hand in hand to change the future of the global sporting goods industry."

Buy global, Create local

The acquisition of international brands and international advanced technology, Buy global, combined with China's large market is not new.

These years often hear a view that Chinese companies are rich, have market, lack technology and brand, then go to buy it internationally.

But in fact, the international brands of "buy, buy and buy" by Chinese companies these years have not been very successful.

In the field of sporting goods, Italy's LOTTO, which was acquired by Li Ning Co in 2008, has become a burden.

Like Anta sports, it can make the acquired brand (such as FILA) grow up rapidly in China, and become a market leader from the brand that is dying before the acquisition. When Anta's brand innovation and development are developing, it can be said that the second brands of Anta group are few and far between.

Buy global is important, but more importantly, the localization of creativity is Create local!

Buy global, Create local, has two meanings.

First of all, for China's consumer company (2C), the acquisition of international brands is indeed the only way to achieve world-class firms.

First, because the brand is behind the market, culture and consumer cognition, it is impossible to achieve overnight.

Two, some brands have unique technologies, such as Solomon, Salomon, a Amer outdoor boots and ski equipment. They can not catch up with the new materials and technology used in the short term. Many Olympic champions and professional sportswear do not have two of them.

These two points constitute the reasons for Chinese companies to buy internationally.

The reason why international brands are willing to sell is also very simple. They want to maximize the return on capital.

Therefore, acquisition is necessary and possible.

Secondly, acquisition really generates value and other factors besides capital.

In the past, people always said that the acquisition is mainly to solve the problem of cultural integration.

As long as we have a good relationship with the acquirer, attach importance to local consumer demand and attach importance to localization talent team, the acquisition will be successful.

This view can not be said to be wrong.

But from the experience gained by Anta, the key to the success of the acquired international brand in China is that the Chinese operation team of the brand has the ability of localizing creativity.

As the main body of the acquisition, Chinese companies must first create extremely strong local capabilities, especially sales channel management, brand management, retail management, supply chain and logistics management, consumer insight and research and development capabilities, in order to make the international brand back to show its demeanor.

Strong local capability is the brand's "amplifier".

In a sense, the success of international brands in China is not pplanted to China's natural success, but only through the re creation and reprocessing of China's local capabilities.

In this regard, Anta's development in the past ten years is indeed remarkable.

For Chinese enterprises who want to achieve world-class firms, Anta's two track development path of "local capacity building + international brand driven" is worthy of attention and reference.

In short, multinational companies in China win the strategy is Think global, Act local; Chinese enterprises to build global company, win the strategy is Buy global, Create local, of course, this is not the only strategy, but it is an effective strategy.

The core of this case study is how Anta's ability is formed.

The second generation of the generation

The formation of Anta capability has gone through several processes.

In 1991, Ding he mu, Ding Shijia and Ding Shizhong, father and son three people started business in Jinjiang, Fujian.

This is a very legendary town after the reform and opening up. The private sector, the main form of "joint fund raising", was first developed. In 1984, it became Fujian's first industrial and agricultural output value of "billion yuan town".

At the beginning of 90s, Chen Dai town government proposed that the footwear industry should be a pillar industry with the coordinated development of relevant industries such as hardware, plastics, clothing and so on, so as to promote the scale and internationalization of shoe production in Chai Tai.

In 1995, Chai Tai shoemaking enterprises increased to more than 1500, and the industrial chain was initially formed.

Ding Shizhong grew up in such an environment.

In 1981, his father Ding Hemu worked with people to make shoes. Ding Shizhong was in the shoe workshop. He went to Beijing with his 10 thousand yuan borrowed from his father and 600 pairs of Jinjiang shoes in 1987 when he was 17 years old.

In 1991, when he returned home, he told his father that from selling shoes in Beijing, it is a long road to make a brand, open a store and expand its distribution channels.

In 1994, he discussed with his father and brother, the three people, the factory name and product brand as "Anta".

Since then, Ding Shizhong has been responsible for the operation and management of the company and is the general manager of the company.

Anta's first innovation is to set up a brand wholesale mode, give distributors permission to sell exclusively Anta brand products in designated areas, and distributors also promise not to sell other brands.

Anta provides seasonal products to distributors through early seasonal ordering.

During the Asian financial crisis in 1997, many OEM shoe manufacturers in Jinjiang went bankrupt, and Anta had survived because of its own brand sales network.

With the pition from the production of single sports shoes to the production of many kinds of sporting goods, Anta also tried the terminal mode of Anta, that is, to build its own sporting goods store.

When I study the history of Chinese private enterprises, I find a phenomenon that can be called "the second generation in the first generation".

That is mainly the father's entrepreneurship, but his son also participated in entrepreneurship, and then took over the two undertaking.

Ding Hemu and Ding Shizhong of Anta, Hong Zhaoming and Hong Zhongxin of the powerful are examples.

The advantage is that the second generation not only inherits the spirit of the first generation of hardworking and hardworking, but also can surpass the first generation because of youth, new ideas and international vision, and will make the family industry flourish and become an enterprise of China and even the world level.

Ding Shizhong can be regarded as the leader of the second generation of the generation.

Growth, crisis and change

In 1999, Anta made a profit of several million yuan a year.

This year, Ding Shizhong proposed to seize the historic opportunity to promote "Olympic marketing" to shape the company's brand.

He decided to invest in all the profits of the company and put an advertisement in CCTV5 during the 2000 Sydney Olympics. The slogan is "I choose, I like".

With the international influence of the Olympic Games, Anta has been popular all over the world, with sales breaking 300 million.

Anta has also entered the first sustained high growth period. Its brand marketing mode of "sports star + CCTV advertising" has been widely imitated. CCTV5 advertising time has poured into many Jinjiang sports brands and become the "Jinjiang phenomenon".

From the Sydney Olympic Games to the Beijing Olympic Games, it is the golden age of sports industry's whole industry growth.

Foreign brands and Chinese brands are growing.

Because of sponsoring a large number of sports events and national sports teams, Anta is known as the "China Sports League engine", and its growth rate is even better.

In 2007, Anta sports was listed in Hongkong.

But at this time, Anta's core competence is not perfect.

The real formation of Anta's ability is not in the triumphant advance, but after the Beijing Olympic Games, the entire sporting goods industry has been inflated too fast, overcapacity and overstock, and the crisis has been revealed.

Before and after 2011, Anta's performance declined for more than two years.

But the sea is crossing the river, showing its true colors.

After the crisis, Anta made profound changes, promoted the pformation from the batch business model to the brand retailing, and adopted a multi brand development strategy at the same time.

The "chassis" supporting these changes is Anta's innovative spirit and strong executive power.

After fruitful changes, Anta's core competency has been formed.

Retail pformation

Let's talk about retail pformation first.

After a Anta crisis, Lv Hongde, an independent director, said that companies around the world had fallen by more than 20% over the past two years, and only 10% had come back.

Ding Shizhong was very touched and took immediate measures.

One is to solve inventory problems at any cost, the two is to avoid future inventory backlog, from "brand wholesalers" to "brand retailers" pformation.

In the "brand + wholesale" mode, it is difficult for the brand to truly understand the needs of consumers. When the dealer's shop reaches a certain scale, once the macroeconomic downturn occurs, the terminal will not sell, and a large amount of stock will be generated. Dealers will no longer purchase goods from the brand.

To this end, Anta put forward the concept of "only one party", that is, branding and distributors must face the final consumer of Party B.

"Brand wholesale", even if the goods are sold out of the warehouse, the "brand retailing" is the only way to sell the goods to the consumers.

Anta has taken a number of effective measures to help retailers pform their wholesalers, supporting them like brotherly brothers, helping them with fine retailing, such as setting the right goods, setting up operating standards, improving display space, and so on.

Anta trains all terminals through self built retailers' College, from shopping guide to Deputy store manager, store manager, store manager and retail operation director. Each layer has detailed training plan to help retailers establish financial system, retail capacity system, recruitment and incentive system, and performance appraisal system. The goal is only to improve the efficiency of retailers.

In the process of retail pformation, Ding Shizhong and others developed a set of calibration operation system for sale and operation. From the 5 dimensions of operation, commodity, finance, channel and manpower, 25 indicators were used to evaluate the health status of more than 30 distributors and their stores in Anta.

An interesting criterion is the "wall effect" put forward by a salesperson at the terminal, that is, the value of the wall should be converted according to the area of the four walls of the shop, and how the best location of the wall should be displayed. How should the minimum wall of "performance" be improved and improved?

According to this suggestion, Anta adjusted the relevant retail assessment standards and achieved remarkable results.

In order to let the retail standards sink into single store management, Anta's whole sales system has made drastic changes.

For example, the classification of more than 8000 stores at that time (street shops, department stores, Oteri J, etc.) and classification (flagship stores, general stores, etc.) management, linking the responsibilities of the five major departments of the group's operations, commodities, finance, channels and manpower to distributors and stores.

The performance appraisal of headquarters staff has changed, which initially assessed Anta's own wholesale performance and changed the retail index of the distributors managed by the assessment.

In order to achieve the same store growth rate, new product sales rate, store efficiency and other core retail indicators growth, headquarters personnel must sink to the management of retail front-line, to plan for the content marketing of stores, and train the terminal salesmen in person.

If the quality of a shop assistant is not good, the Training Department of the headquarters should bear the responsibility. If the spatial image is not good, the retail department of the headquarters should bear responsibility.

The retail pformation was basically completed in 2014, and the headquarters management staff of the Anta sales system was reduced by nearly half.

Under the guideline of "quality" instead of "quantity", the number of outlets in the distribution network dropped from 8075 in 2012 to 7622 at the end of 2014, and sales revenue began to pick up.

After the retail pformation, Anta made another revolution around the electricity supplier.

In 2015, "double eleven", Anta's electricity business in sports category ranked only eighth, Ding Shizhong put forward the "online and offline status matching" goal, made online business five years strategic planning, the first step is to turn the third generation generation of online business and flag shop into self run, cultivate their online retail application ability, build their own team.

Without much time, Anta set up a big data analysis system. Through accurate understanding of consumer demand, we pushed ourselves to improve the level of management refinement and the quick response capability of replenishment and replenishment, so as to create a fast, accurate and flexible supply chain.

In 2015, Anta has become the third industry in the world and the first brand in China.

Over the next few years, Anta started a comprehensive upgrading of its brand, products and channels.

We have absorbed excellent products and brand management talents from home and abroad, and have been rapidly upgrading in commodities. In the US, Korea and Japan, the design team has been deeply grafted with local teams from China to create products of high cost performance, high quality and international standard, creating a classic case of Chinese brands being queued up to sell for 160 US dollars in the US.

The pformation of retail channels has also changed the image of the terminal. The Anta brand has gradually shifted to the shopping centres gathered by young consumers with the advent of the golden age of China's sports market. The high standard store has constantly refreshed consumers' awareness of national brands. The flagship store of 800-1000 square meters has established a brand new image in the mainstream market, and the annual sales volume has been constantly emerging in several million or even tens of millions of stores, accelerating the development process.

FILA case

Next, let's take a look at Anta's multi brand development, focusing on the case of FILA.

In 2009, the retail giant BELLE group sold Anta's trademark rights, operation rights and related marketing network to Anta in China.

From November 2011 to June 2012, Anta acquired all FILA agents left behind by BELLE.

BELLE just acquired FILA's related assets in China before the Beijing Olympic Games. It lost money due to poor management, so it soon sold abroad.

BELLE has a strong retail power, but can not make FILA bloom, Anta?

In October 2012, Ding Shizhong participated in the FILA Strategy Symposium and put forward the idea of "500 times 500", that is to say, 500 stores in each ten years, 5 million yuan per store per year and 2 billion 500 million yuan in total.

It was considered impossible at that time, but in 2018, sales of FILA China exceeded 10 billion yuan.

How did Anta do it? Simply speaking, it is bold innovation in business mode and expand retail stores through direct retail mode.

At that time, no one believed that a brand dealer could cover the whole greater China through direct retail terminal.

But the FILA team believes that there are too many intermediate links in the original distribution mode, which is difficult for brands to understand the real intention of consumers, and to meet the changes of consumers' demands through product adjustment.

Moreover, if there are problems in the distribution of interests among the various links, there will be a crisis in the whole chain.

For nearly three years, they have pformed the dealer mode into a retailer mode and become the only brand in the sporting goods market in China that is directly retailing.

At the same time, FILA has positioned itself as the high-end fashion sport brand in the Chinese market.

Anta has provided its own experience in commodity planning and supply chain, set up an internationalized FILA core team with multicultural background, played the positioning of high-end fashion movement formed by FILA brand on the basis of a hundred years of gene, and studied FILA ad endorsement selection, store overall image design, shopping bag and shoebox design in an all-round way, creating the unique brand tonality of Live Your Elegance.

In 2016, FILA began to shape the brand group.

Besides focusing on the 25-40 year old crowd in the FILA main brand, the FILA KIDS children's clothing brand for the 3-15 year old crowd has achieved profitability in the first year.

At the end of 2017, the FILA Fusion tidal brand product for the 16-24 year old crowd appeared at the Jun Tai Department Store in Xidan, Beijing.

Through the construction of brand group, FILA can meet people's demand for high-end fashion sports products in different age groups and different life scenes.

When opening a new store, FILA adopts a strategy of "multi stores" and the establishment of a comprehensive flagship store, that is, different brands of retail stores in the brand group cooperate to enter shopping malls or integrated flagship stores to achieve superimposed growth.

Obviously, the huge success of FILA's international brand in the Chinese market is inseparable from Anta's super operational and innovative capabilities.

If it were not for Anta to operate, but for some other sporting goods company to operate, FILA would repeat the loss of BELLE operation.

The success of FILA has revolutionary significance for Anta, and has strengthened Anta's confidence in taking many brands.

At the end of 2015, Anta bought Sprandi (Spandi), and reached a joint venture agreement with DESCENTE (Desanto) in Japan in 2016, and bought the KOLON SPORT (Ke Long) of Korea in 2017.

Where are the advantages of multi brands? For example, the 7 tier of Hyatt department in Xidan, Beijing, brings together 15 sports brands, and the Anta group has 4.

Men's sports shorts from top professional positioning to mass market positioning, Anta group has a brand, Desanto sells from 350 yuan to 790 yuan, FILA is around 350 yuan, Anta is up and down 100 yuan.

The market width of Anta has been covered from 18 yuan Anta brand sports socks to 5500 yuan Desanto functional sports coats.

Ding Shizhong said: "now there is only one way to cover many brands and channels, and only Anta in the clothing industry.

We can go from the high-end Xinguang world to the cities above the county level, which is competitiveness.

Execution and innovation spirit

Through retail pformation and multi brand development, Anta is thrived in China's sporting goods market.

The ability to create such a powerful localization is behind Anta's execution and innovation spirit.

The DNA of Anta culture is "Iron Army Culture".

Anta believes that no good strategy is implemented without implementation.

Take the promotion of retail pformation as an example. At that time, Group executives and sales managers voluntarily worked overtime one day a week, and executives often flew from Xiamen to Guangzhou at 7 a. m. to guide the pformation of stores.

When they arrived at the store, the distributor's store manager was still drinking tea outside.

After being moved, distributors and store managers are also working hard.

According to Anta's requirements, distributors set up "General Manager Store Day". The general manager of the distributor goes to the store one day a month to work, and the store manager, together with Anta's managers, analyzes the problems in terminal operation and proposes solutions.

In terms of innovation, Anta has always had a strong sense of crisis.

Over the past ten years, Anta's competitiveness has been controlled by channels.

But Ding Shizhong believes that in the next ten years, the competitiveness of survival depends on the wisdom of the terminal, that is, better understanding of the needs of consumers than competitors, and the core of consumers.

These two years' jeans are very hot, but consumers will not shout "which pair of jeans with holes to sell" on the road, or even realize that they want holes in jeans.

Anta has launched a new "intelligent store", which has added "smart function" such as cloud storage rack, pressure bar interactive screen, Anta excellent mall and instrument shoes. It can serve consumers more accurately from four dimensions, such as stroll, look, test and knot.

For example, when a consumer picks up a product from the shoe wall, the information of the product will be projected onto the display screen. On the one hand, the consumer can clearly understand the product's function. On the other hand, Anta can collect the shoe's "take up rate" in the background, and analyze the data according to the actual sales data.

If the "take rate" is very high, but the turnover is below the average level, it may be the design of the shoes is attractive, but the comfort of the upper foot is not up to standard.

Relevant personnel should be quickly adjusted.

Zheng Jie, executive director and group president of Anta group, told me that R & D investment accounted for more than 5% of the group's sales cost. Besides Xiamen headquarters, California, Japan, Tokyo, South Korea, Seoul, Italy Milan, China Hongkong and Mainland China also had R & D centers, which had over 200 foreign designers.

Last year's Winter Olympic Games in Pingchang, which was worn by Wu Dajing gold medal, is the lightest and least resistance short track costume in the world.

Domestic sports shoes did not dare to sell more than 1000 yuan in the past. Last year, Anta's basketball shoes sold for 160 dollars in the United States.

This is the value of innovation and design.

In April 11th, Anta group held a meeting with amamin sports, announcing the establishment of the new board of directors of the amamin sports group, and Ding Shizhong took the chair of the board of directors of amamin sports.

This marks the end of the half year overseas acquisition of Chinese enterprises involving 4 billion 600 million euros, and Anta group's internationalization process is further developed.

The way of the winner

All the people are not old, and the scenery is good.

Anta's case study makes me see the possibility of a world class Chinese company - a combination of China's market, Chinese capital and international brands, rather than the ability of China to re create international brands.

Chinese companies can eat "International Rice" on their ability. This is a special value for me.

What really matters is not money, but Kung Fu. It is the creativity of local creation and the strong executive power of "I must be able to be".

Ding Shizhong said that in the field of sports goods, "single focus, multi brand, and all channels", especially the road of multi brand, no one has passed. We need to take a road. This is the way of Anta.

In my opinion, to achieve world-class Chinese companies, capital market can be provided without capital, and investment banks and consulting firms can help without the purchase target.

But if you lack the vision of your heart and lack the ability to really be strong, then a lot of money and a good brand will be smashed in your hands.

The case of Anta tells us that the road of ability is just how to get around.

Opportunity can be sought outwards, and Kung Fu can only be sought from within.

China is a highly changing emerging market and an international market where global brands are fully competitive.

If we can establish strong management and innovation capabilities in China, Chinese companies will be able to manage global leading brands and provide consumers with the best products and services in a global perspective.

The new era of China's economy is a new era driven by innovation and capacity.

The winners of this era must be strong, and putting them before the big ones will be their basic characteristics.