"Brand Diversification" Has Been Recognized By The Industry. Can Anta Become The Benchmark In The Industry?

Recently, Anta sports announced the first quarter earnings in 2019, of which Anta's main brand sales rose more than 10% over the same period, and the sales of sub brands increased by 65% over the same period last year.

It is worth noting that in the data gathered by GF Development Research Center, more than 35% of Anta's revenue in 2018 was contributed by FILA (FIE) brand.

In 2009, Anta formally bought the management and trademark rights of the famous international brand.

In addition to Felix, Anta has acquired many famous brands abroad for many times, and it is these acquisitions that help Anta pform from the middle end to the high-end, and become the first brand in the domestic market movement.

With the success of Anta, over the past two years, more and more domestic sports brands, such as Lining, 31st, XTEP, have launched the international acquisition business, laying the strategy of diversified brand development, and thus seeking the pformation of their own development.

"Brand diversification" effect is obvious, Morgan raised Anta's revenue expectations.

Looking back at Anta's mid term performance report in 2018, Anta's revenue grew by 44.1% over the first half of 2018, reaching 10 billion 550 million yuan.

In 2015, Anta's annual revenue exceeded 10 billion. In just two and a half years, Anta realized the pformation from billions of annual revenues to billions of revenue in half a year.

According to the 2018 annual revenue report, Anta achieved annual revenue of 24 billion 100 million yuan, an increase of 44.4% over the same period last year, and net profit of 5 billion 700 million yuan, an increase of 42.9% over the same period last year.

Anta official WeChat claims the 2018 earnings report is "best performance in history".

Among them, Anta's "brand diversification" development strategy is the key to success.

In 2008, Anta launched the children's brand ANTAKIDS.

Then, in 2009, Anta officially purchased the FILA related trademarks in mainland China, Hongkong and Macao, and retail business in Hongkong and Macao from BELLE international, with a total price of HK $600 million.

In 2008, FILA brand lost 39 million 178 thousand yuan in China.

Perhaps at that time, no one would have thought that 35% of Anta's revenue today was contributed by FILA international brand.

After completing the acquisition of FILA, through strong operation adjustment, Anta changed a large number of FILA stores to direct business, adjusted the product positioning of FILA, and developed customized FILA products for Asian markets and consumers.

FILA brand stronger premium capability, coupled with the cash flow that Anta brand already owns, Anta is committed to promoting FILA brand store expansion and R & D investment, helping FILA gradually turn around and gain profits, and expand rapidly in the domestic market, increasing its share in Anta's overall revenue.

More importantly, thanks to the success of FILA, before and after 2012, when other similar brands in the country were going through the inventory cycle, Anta not only achieved a reversal, but also ushered in a rapid growth.

Since the FILA brand, Anta has acquired Spandi and Desanto, and has established a joint venture with the dragon company to win the trademark ownership of internationally renowned children's wear Xiao Xiao cattle. Recently, it has begun to acquire Amer (Ya Mafen) sports.

The brand of amvin includes 13 private brands, such as Salomon, primitive bird, and Wilson.

At present, the Anta brand can be broadly divided into functional functional (Anta and Spandi), fashion (Fila and Xiao Xiao cattle) and outdoor (Desanto, Ke Long, Amer's Acr teryx and Salomon).

A commercial empire in sports has been formed, while all the brands within Anta will share the supply chain and retail channels, and cooperate with each other and cooperate with other industries.

In April 28th, JP Morgan announced that Anta's FILA brand grew strongly, far higher than the bank's expectations.

Plus new brand management initiatives can bring good synergy, especially Anta's 2019-2021 year profit forecast 3-7%, while the target price increased from HK $47.5 to HK $66, rating "overweight".

Is the strategy of brand diversification recognized?

XTEP and Lining are also buying.

In fact, as early as 2010, Lining's revenue has reached 9 billion 400 million yuan.

In 2011, Lining's performance declined sharply, and even changed the brand language that the company used for many years.

Because of blindly raising the price of products and marching into the first tier cities crazily, the rapid development of enterprises brought about by the Beijing Olympic Games has come to an end since then. Lining's brand upgrading has been blocked.

In 2012, with the help of the London Olympic Games, Anta successfully squeezed Lining out of the top spot of the industry with a net profit of 1 billion 700 million yuan.

With Anta's successful acquisition and pformation of Italy sports brand FILA, Lining also acquired the Italy sports brand, including Aigle, Danskin and so on.

In October 2016, Lining established a cooperative relationship with the United States, the integration of Danskin and AI brand resources, and began to exert the strength of the women's sports market.

In fact, as early as in 2014, Lining launched the Lining "self surrender" (Seoul studio) products.

Among them, Lining joined Korean pop star Jung Soo Yeon Jessica to design Lining's "self Sika" sportswear.

In April 2019, Lining formally acquired Kappa, accelerating the layout of its own product line and promoting the diversified development strategy of the brand.

And with the rise of performance, the recovery of classic brand slogan and the development of international brand acquisitions, especially women's sports brands, Lining's sales accounted for 80% of new products in 2018.

Similarly, with the two brands and sales rights of Saint John's and Mai Le, XTEP signed a cooperation agreement with Wolverine in March 2019, marking the beginning of XTEP's multi brand strategy.

San Kang and Mai Le belong to the high-end brands. Apart from brand recognition, Saint John and melle will integrate their own supply chain and product advantages with XTEP, and integrate the online and offline consumption patterns to help XTEP further develop.

Not only that, but in April 2019, XTEP announced an agreement with the Korean clothing retailer's love and love group to buy the US tennis shoe product gestapi at the price of 300 billion won.

According to XTEP management, XTEP international has been talking about acquisitions with many overseas brands, and it is expected that the target will be targeted at domestic consumers.

The strategy of brand diversification is not just a simple acquisition.

Of course, for XTEP, in early March, it reached an agreement with the US Wolverine, which invested 155 million yuan, and began buying takeway in April.

Such a dense acquisition in a short time will inevitably bring trouble to enterprise's capital and business management.

And for XTEP's product positioning, there are people in the industry analysis, whether smoothly for a second-line consumer recognition in the short term there is a great deal of uncertainty.

After all, in addition to brand awareness, product experience and enterprise innovation ability are more important.

Take Anta as an example. In March 2019, Anta sold its first global limited basketball shoes KT3Rocco in the US.

Thousands of people queued up at NiceKicks Anta shoe store in San Francisco. This is the first time that Chinese mainland brand shoes have caught up in the US.

For Anta, it is a long and arduous journey to let consumers understand and recognize the unique technology and technology of their brand.

As a leader in the global sporting goods business, Anta has been making vigorous efforts in the footwear industry in recent years, and has launched a number of innovative and innovative products.

At the end of 2018, Anta released a "wormhole" running shoes A-FLASHFOAM.

Compared with ordinary damping materials, "wormhole" running shoes have better elasticity, and the cushioning effect can also better protect the knee, ankle and other parts.

Coupled with the advanced technology of flying fabric and Hu Xi net, the "wormhole" running shoes can save energy effectively while the user is running.

It is Anta's series of "innovation and technology" new products, successfully let Anta from the past "cost-effective" positioning, pformation into "product innovation", the production of high value-added products.

From the last ten years of "cost-effective" positioning, turned into the next ten years, "product innovation."

The strong innovation stone made Anta achieve Anta's many star products, and also made Anta a brand that consumers wanted to buy.

Of course, although Anta has many brands, it only focuses on sports shoes and clothing that is best suited to itself.

According to Anta's development plan, by the end of 2019, the total number of Anta stores in China, including Anta children's independent stores, will reach 10100-10200.

The total number of FILA stores in mainland China, Hongkong, Macao and Singapore (including FILAKIDS and FILAFUSION independent stores) will reach 1800-1900.

Based on more than 10000 stores, Anta will continue to promote the pformation and upgrading of retail channels.

In an interview in 2018, Deng Zhiwei, director of Anta retail standards, said that Anta accounted for nearly 50% of the eighth generation of image stores, and the new ninth generation "smart store" has been experimenting in many places.

With the help of big data, Anta will enhance customer service experience and forecast market development trend besides multi brand management and technological innovation.

Conclusion:

Innovation is the way to Anta's success.

During the two sessions in 2018, Ding Shizhong, chairman of Anta's board of directors, said in an interview that Anta's contribution to innovation products accounted for more than 60%.

While Anta's research costs account for over 5% of the cost of sales, it has design and research institutes in many countries and has built an international research and design team.

If we are busy buying, promoting brand diversification, ignoring the innovation and operational capability of enterprises, it will be difficult to develop smoothly.