From XTEP'S Acquisition Of Gestapi, The Past And Present Of Domestic Sports Brands

Recently, the frequency of XTEP buying and buying is a bit high.

In the past March, XTEP announced the establishment of a joint venture with Wolverine. With the start-up capital of 155 million yuan, XTEP has successively taken the agency power of Merrell and Merrell.

Then, in April 19th, XTEP announced an agreement with the Korean clothing retailer's love and love group to acquire K-Swiss, the US tennis shoes brand of the group. The scale of the acquisition is about 300 billion won, or about 270 million US dollars.

Chop pepper knows that the San Kang Ni brand enjoys the reputation of "Rolls-Royce in sports shoes" in the United States. It is one of the world's four most famous running shoes brands with professional quality and high-end technology. Mai Le is mainly aimed at outdoor sports market, and is one of the most popular outdoor outdoor brand of the American people.

XTEP's 2019 purchase in the spring is also easy to recall. The consortium headed by Anta in March this year finalized the acquisition of "Amer Sports", which is as high as 4 billion 600 million euros (about 37 billion yuan), and is also the largest foreign mergers and acquisitions in China's apparel industry.

And after the acquisition of dust settled, Anta has owned FILA, Descente, Kolon Sport, Sprandi, Kingkow and other high-end brand matrix, Amer Sports will undoubtedly speed up the expansion of its multi brand layout.

It is not hard to see that the goal of successive acquisitions by Anta XTEP two sports shoe and garment enterprises is not only to enrich the brand diversity inside the group, but also to pursue more high-end customer groups through the professionalism of foreign sports brands.

Indeed, in today's sports track, the professionalism of shoes and clothing has also become a stepping stone to the high-end market.

The higher the consumption level, the higher the consumer's attention to professionalism.

This is a challenge and an opportunity for the traditional sports brand in China.

The horn has blown up. Who will kill the next match?

Once the fashion symbol, now the town light.

In 2018, there was such a headline that the Party News was hot: "Ali programmer's blind date was rejected because of a pair of XTEP shoes".

The reporter wrote that the programmer came directly after wearing XTEP shoes for a blind date, and the woman refused directly: "your 27 year old boy is not suitable to wear XTEP shoes for a date."

Once the news came out, it became the focus of heated debate at that time. The XTEP named also was embarrassed by capitalization.

Equating with the three or four line sinking market has also become the dilemma that most Chinese traditional sports brands have to face.

Now, 20 years ago, the light of town was the most dazzling fashion symbol.

In the 90s of last century, the scale of shoemaking in Jinjiang, Fujian Province, was well known throughout the country.

Anta, XTEP and 361 degrees were born here.

At that time, most of the Jinjiang Department companies were OEM and brand wholesale. XTEP's predecessor Sanxing company was producing various styles of sneakers for international famous brands, earning intermediate profits.

With the rise of Lining brand sports shoes and clothing, Jinjiang shoe factories also have the trend of changing from OEM to launch sports brand.

And how to win fame in the market, sponsoring the Olympic Games and star endorsement has become the marketing standard.

In 2000, when the Sydney Olympic Games was held, only one hundred million Anta sales were sold to tens of millions of dollars in 2000.

That year, people all over the country knew Anta through the brainwashing advertisements of the Olympic Games.

In 2001, Sanxing company also became "advanced" to become XTEP, the main fashion sport style, signed the most rebellious little life Nicholas Tse as spokesperson at the time of millions of endorsement fees, pioneered the brand-new model of entertainment stars endorsing sporting goods, and created a fashionable, rebellious and unique personality for XTEP brand, which promoted the implementation of XTEP brand differentiation strategy.

The prosperity of the capital market and the hosting of the Beijing Olympic Games have brought unprecedented opportunities for the development of domestic sports brands. During the period from 2005 to 2009, the major shoe and clothing enterprises were listed on the market, and a large number of shops were opened in the whole country, with the total number of new stores reaching nearly 2.

According to the statistics of Ou Rui International, the scale of China's sporting goods industry has reached 103 billion 900 million yuan in 2008. Apart from Lining's obvious lead in 9% of the market share, the market share of Anta, XTEP and 361 coming out of brand recognition is 5.8%, 4% and 3.7% respectively.

However, such a grand occasion did not last long.

Although the rapidly expanding tens of thousands of stores have spread their fame to the brand, they also aggravate the conflict from inside the channel, and to some extent, hide the hidden danger of high inventory.

Since the beginning of 2012, the major traditional sports brands in China have been suffering from bitter effects: oversupply of the market has led to a backlog of stocks and funds.

These funds can be used to create new value for brand product R & D, marketing and so on, but the huge amount of stock has to make this part of the fund idle and cause losses to the development of traditional sports brands.

Before and after, Nike ADI and other internationally renowned sports brands also entered China in succession, and hit the Chinese market with their professional design and high-end positioning.

However, the traditional Chinese sports brand, which has already been homogenized, has no time to come up with its design.

At the same time, the electronic business platform has begun to emerge gradually.

In the early days, the major e-commerce platforms opened up price wars in order to increase sales, and shouted super low discounts to attract consumers' attention.

To a certain extent, this is the best way to release stock pressure for traditional shoes and clothing brands.

There is no doubt that frequent price war will increase sales volume temporarily, but it will also exert a subtle influence on consumers and seriously affect brand image.

But in such a situation of internal and external troubles, even if the electricity supplier sells goods is "drinking poison to quench thirst", it can only drink in tears.

According to publicly available financial data, XTEP's revenue reached 5 billion 550 million yuan in 2012, but its annual revenue plunged by 21.8% in 2013. Anta also ushered in the first decline in net profit since listing.

Transformation and development under labor pains

After the inventory and brand crisis in 2012, the major traditional sports brands in China began to think about change.

Anta took the lead in opening up flat retail channel reform, strengthening retail management, helping dealers to clean up inventory and optimize orders through monitoring sales data.

At the same time, while recovering the control right, it also promotes the brand image of the direct store and constantly optimizes the experience in the shopping process of the entity store.

In 2014, Anta became the first brand to get out of the stock crisis, and its performance recovery was on the rise.

The results showed that the net profit of that year was 19.4%, which was 10 points away from the second runways of the same runway. The former sports brother Lining was more difficult to get away from -11.1%'s net profit loss.

And this year, Anta became the first domestic brand in China's sporting goods industry, second only to ADI and Nike.

With the steady improvement of performance, in 2017, Anta sports revenue and net profit had reached 5 times that of 2007.

Also in the 2018 earnings report, Anta sports remained strong growth, revenue rose 44.4% to 24 billion 100 million yuan, and gross profit increased 54% to 12 billion 687 million over the same period last year.

To promote Anta's continuous growth, besides the early reform of retail channels, it is more important to "never stop" buying and selling rationally.

The most foresight is in 2009 when Anta spent HK $650 million to buy FILA's business in mainland China and Hong Kong and Macao.

At that time, FILA was not known, and it still lost money in the Chinese market.

Nowadays, FILA has been concentrated in the central business circle of all the second tier cities, and has become the new favorite of young consumers in the field of sports and fashion in recent years.

In June 2018, Wang Yuan, the spokesperson for the spokesperson, expanded the consumption potential of the millennial generation.

At the same time, Zheng Jie, the president of the group, revealed that the growth of Anta in 2018 is also the "great man" is FILA, the annual flow of over 10 billion yuan, sales growth of more than 80%, is the biggest contribution to the growth of the brand.

Anta's multi brand strategy drives high performance

It can be seen that Anta group has stabilized the existing three or four line market through the high cost performance of the main brand Anta, and then combined with FILA to cater for the consumption upgrading of the second tier cities.

With the FILA's fashionable sports field constantly pouring out the same type of opponents such as PUMA, Cage and so on, the homogenization competition is becoming more and more intense. The rainy day Anta will expand the field of vision to aim at the domestic blank outdoor market, introduce Desanto, and run the Korean brand Konlonsport China business, plus the newly clad Amer Sports, Anta sword 2022 Beijing Olympic Winter Games ambition has no doubt.

And the recent purchase and purchase of XTEP also has a close connection with Anta's success mode.

Due to the long time of the 2012 crisis, XTEP began its formal pformation in 2015. Its main direction is also aimed at retail channels and brand management.

At the end of 2017, XTEP reused 150 million yuan for a one-time purchase of products made before 2015, even though XTEP's turnover in 2017 dropped by 5.26% compared with the same period last year. But this time, it also completely cleared XTEP's historical burden and formally declared the end of the pformation.

XTEP's total revenue reached 6 billion 383 million yuan in 2018, up 24.84% compared to the same period last year.

It is worth mentioning that at the moment, XTEP has taken the power of taking Saint John's, Mai le and the acquisition of gestus.

But now it is already different from the past. With the competition in the sports market becoming more and more intense, the success of copying Anta mode is not the same as entering the new market.

Multi brand operation will be a new challenge for XTEP.

Competition in the sports market at home and abroad has reached the stage of white heat.

Unlike Anta and XTEP, Lining, who has IP and national characteristics, tends to expand inside herself and give greater play to the true brand value.

None of the conspicuous Chinese characters, Huang Hong matching and Chinese style elements are subverting Lining's old image.

In February 2018, Lining landed in New York fashion week.

This 28 year old brand of Chinese goods seems to prove that between "excessive" and "damp" is the distance between a fashion week.

The successful success of the show made a good start for Lining's brand younger.

Not only is Lining soaring, but also a shoe.

A word has been circulated in the sports consumption market: before it had no money to buy Lining, now it is (really) no money to buy Lining.

Behind the bustle, Lining also handed in a good earnings report: as of December 31, 2018, Lining group's annual revenue grew 18.45% to 10 billion 511 million yuan, net profit increased 39% to 715 million yuan.

After 8 years of waiting, Lining finally completed the goal of breaking billions of revenue and gradually recovered its performance.

At the same time, driven by the new series, the retail sales of Lining sports fashion category increased by 42% over the same period in 2018, which was higher than that of all other categories. The annual sales volume of sports fashion clothing exceeded 5 million 500 thousand, and the sales rate of new products sold in 6 months was 70%.

In the latest autumn and winter fashion week in New York, Lining continued to enlarge the logo IP of "China Lining".

In the design, it continues the sense of retro, and integrates Chinese landscape into the design of sportswear, which has more Chinese characteristics. Once online, it has been given various kinds of praise by the domestic media.

But for Lining, this is just the beginning of change.

In the current sports market dominated by young people, Lining, who specializes in IP style, will easily lead to the purchase and empathy of consumers, and can continue the current brand potential, but the premise must be fine and professional operation.

At the beginning, chop pepper said that with the higher level of consumption of sports goods, the higher the consumer's attention to professionalism, the same on Lining.

The price of new and old products in New York increased in 2018 after the stunning four in the fashion week of Lining.

Among them, the average unit price of China's Lining series is more than 30% higher than that of traditional Lining products.

"The price increase of old products represents the promotion of brand power," Ceng Huafeng said.

This change also shows that in 2018, Lining's gross margin increased by 1 percentage points to 48.1%.

If you want to continue to maintain such a high premium, in addition to the continuous recognition of value-added benefits from the "China Lining" brand IP, more consumers are required to voluntarily pay for the professionalism of the product itself.

In 2018, Lining launched a series of high-end basketball shoes -- Wade's way, and the new selling price is over 1000, which is close to the average level of professional basketball shoes of Nike and ADI.

In March 1st of this year, the "sneaker talk" on the sneaker evaluation platform has launched a program called "Lining Tucao conference". Many of Lining's old customers have carried out the omnibearing evaluation of the brand's "love and hate".

"How can a pair of actual basketball shoes get more than 1000 yuan, so expensive?"

"The product should be done with care. Lining's shoe last is too wide, like Wade's gills."

"Their focus is on fashion week. Look at the design of basketball shoes over the past two years, and now we have no time to design."

Unlike the capital market's praise for the rise of Lining's performance, the feedback from loyal customers may represent the direction of the brand's future improvement.

For Lining, the birth of Chao IP has given the old Chinese goods a chance to return to the arena, but such feedback is ultimately limited and short-lived.

As a brand that specializes in professional sports, continuous and highly effective product research and development can really provide the brand with a steady flow of perpetual motion.

Ending

Whether it is the successive acquisition of Anta XTEP or the rebirth of Lining's national tide, the head strength of China's traditional sports brands basically bid farewell to the old development mode and embarked on a new journey.

But this new journey is still full of opportunities and challenges. Besides the running in of the internal market, the external force is still fierce and powerful.

According to Nike's 2019 quarter fiscal year third quarter earnings report March, the Greater China region continues to lead, with revenue of $1 billion 588 million, and has achieved double-digit growth for 19 consecutive quarters.

In its 2018 earnings report, Adidas also announced that the Greater China region grew by 23%.

Number one.

This means that in the second tier cities with high purchasing power, Nike and ADI's brand discourse rights have not received greater challenges.

This is still a long road to Chinese traditional sports brand.

But the trumpet has blown up. In this so-called "capital cold winter" in recent years, we are looking forward to a bright future full of sports and blood.