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    Lining, Anta, XTEP Revenue Rose, The Sports Industry Is Really Facing The Cold Winter?

    2019/8/30 14:32:00 0

    Lining

    In the first half of 2019, Sino US trade continued to dispute, leading to a slowdown in global economic growth. The world economic outlook released by the International Monetary Fund has pointed out that the growth rate of 70% of the world's economy will still decrease this year. But in this environment, China's economy has maintained steady development through strong measures, giving the domestic market enough kinetic energy to ensure the stability of the market, including sports industry.

    At the end of August, a number of enterprises in the sports industry released the interim results announcement in 2019. As part of the high proportion of the industry market, Lining, Anta, XTEP, the head of sports products, all handed over a steadily rising transcript in the first half of the year.

    Compare the interim reports of these sports brands. It is worth noting that in terms of market control and brand innovation, they have made similar arrangements in many aspects. Is this the secret that will affect the revenue growth of several head brands?

    Lining: "Lining experience value" is the core.

    In the first half of 2019, Lining's revenue reached 6 billion 255 million yuan, up 32.7% compared with the same period last year. The net profit of listed shareholders reached 795 million yuan, up 196% compared with the same period last year, and the net interest rate increased from 5.7% to 12.7%. The net interest rate of listed shareholders increased by 109% to 561 million yuan and net interest rate reached 9% after deducting unrelated profits and losses.

    Lining's interim report points out that in the first half of the year, Lining's business focus remained on products, channels and retail operations, as well as supply chain management. Aiming at the increasingly subdivided and mature consumption demand, Lining put forward the consumption mode based on "Lining experience value".

    These models are ultimately reflected in the young trend of Lining's efforts. The new brand, "China Lining", has been on the fashion week of New York many times, and the sales volume of the mid term financial reporting movement has increased by 54%, accounting for 29%. At the same time, Lining will focus on its professional products around basketball, running, badminton, training and sports and fashion five major categories, to increase the deployment of Oteri J, shopping centers and electricity providers, and vigorously enhance the multi category efficient shops, closing the loss of Direct stores. As of June 30, 2019, Lining dealer contributed 48.6% of revenue, an increase of 4.2% over the same period, and sales to 28.1%, down 5.1 percentage points.

    In order to narrow the distance from users and bring users a better consumption experience, Lining not only sought breakthroughs in the creativity and shop experience of e-business, but also increased user awareness of brands through online activities such as "Wade China trip", "3+1 basketball game" and "Vanke happy running", thereby increasing user stickiness. In general, the "professionalization, youthful" products and the strategy of "single brand, multi category and multi-channel" make Lining brand more competitive in the industry.

    Anta: consumer oriented, multi brand comprehensive development

    In the first half of this year, Anta's total revenue amounted to 14 billion 810 million yuan, an increase of 40.3% over the same period, of which the main brand accounted for 51.2%, and FILA accounted for 44.1%. Gross profit margin rose by 1.8 percentage points to 56.1%, and net profit of listed shareholders increased by 27.7% to 2 billion 500 million yuan.

    Behind this proud report card is Anta's constant innovation in the international brand market. Ding Shizhong, chairman of Anta's board of directors, pointed out: "after years of development, Anta sports has gone through 4 stages of innovation: 1 manufacturing, 2 creating brands, 3 retail transformation, 4 more brand development, and each transformation is a subversion of the past."

    "Single focus, multi brand, all channels". By segmenting the three categories of specialty, fashion and outdoor, we launch a brand matching brand for each category, and then match an independent team to co-ordinate retail, procurement, production and business to achieve the best synergy. This is the current market strategy adopted by Anta.

    In order to meet more differentiated consumption needs, Anta's multi brand strategy has covered Anta, Anta children, FILA, FILA FUSION, FILA KIDS, KINGKOW, and outdoor sports including DESCENTE, KOLON SPORT and many other brands. According to the financial report, the top 9 billion 150 million of Anta's revenue in the first half of the year was clothing products, accounting for 61.8%. In this regard, FILA accounts for a large proportion. For other brands, Anta also showed strong self-confidence, they said: "DESCENTE will be the next year's brand of over 1 billion water, KOLON is also growing."

    In addition to building multiple brands and adhering to the consumer oriented strategy, Anta is still improving its sales channels. Apart from traditional street shops, department stores, Oteri J, shopping centers and e-commerce platforms are also constantly being incorporated into Anta's distribution network. Anta has put forward high standard benchmarking requirements for the layout of these new channels, and is eager to provide customers with more personalized consumption experience through the transformation of shops.

      XTEP: Innovation Based on acquisitions and cooperation. New strategy of multi brand operation

    Revenue rose 23% to 3 billion 357 million yuan, net profit of listed shareholders rose 23% to 463 million yuan, gross margin increased from 43.7% to 44.6%. This is a performance answer that XTEP handed over in the first half of 2019.

    Over the past few years, XTEP has been committed to the strategic transformation from wholesale business to brand plus retail management. In this process, XTEP has also explored the importance of brand differentiation and consumer experience in the current sporting goods market. "At present, Chinese sporting goods brands have shifted their focus from promoting product functions to building customer emotional dependence and brand loyalty," XTEP reported.

    Adhering to the mission of "becoming the preferred brand of Chinese runners", XTEP has invested a lot of effort in running. In addition to sponsoring over 21 marathon events in China, it has also acquired many high-end and professional sports brands at home and abroad (K-Swiss, San Kang, Mai Le, Paladin, etc.), and has continued its consistent professional sports strategy. This is also reflected in the earnings report, 57% of XTEP's revenue comes from footwear products.

    In XTEP's view, the influence of social media, stars and key opinion leaders has promoted the trend of leisure sports in the world. Young people will play a crucial role in the future development of sports. Therefore, XTEP has changed the direction of product research and development from functional to "functional and fashion elements with a sense of technology". At the same time, it is eager to use "sports + entertainment" dual marketing to promote brand innovation. Signing the famous star Jeremy Lin and sponsoring sports variety "this is dunks 2" is an important step for XTEP.

    In June 2018, XTEP worked with Alibaba group to establish a new retail marketing mode with customer as the core in e-commerce, all channels and community operation. As of June 2019, e-commerce accounted for over 20% of XTEP's revenue. At present, there are 40 exclusive agents under XTEP, which control 60% of the direct line stores. XTEP's deployment of offline stores is still continuing. Only the next step is to focus on the new shopping centers with larger shopping centers, and this goal will continue in the coming years.

       Sports brand development enters a new stage "War Within Three Kingdoms" situation further escalated

    I believe you can clearly see the industrial layout and development direction of the above three brands, "targeting the young group, adhering to the multi brand and multi-channel comprehensive development", the overall strategy of the domestic sports brand has been very clear, which means that the three companies on the market in Hongkong have launched a fierce battle in the new stage.

    The reason behind it is that with the improvement of the overall economic level of the whole nation, the public has higher requirements for the quality of life. After unprecedented attention to health and sports, Chinese people's enthusiasm for sports and their desire for consumption stimulated the development of sports goods industry. Compared with most of the professionalism of previous sports products, the main consumers are more concerned about fashion and star effect. This also urges the brand to make more efforts in promoting marketing. XTEP's earnings report shows that sales and distribution expenses accounted for about 19% of revenue in the first half of this year, up 1.4 percentage points, because the increase in advertising and promotion costs.

    According to the report released by China sporting goods, in 2018, the gross domestic product value of the mainland sporting goods market reached 264 billion 800 million yuan, up 19.6% over the same period last year. The National Bureau of statistics pointed out that in the first half of 2019, the mainland's retail sales and gross domestic product were 9.8% and 6.3% respectively. This means that the domestic sporting goods industry is still keeping up momentum.

    But how to maintain a certain share in the growing market is not easy for every brand. From the current "War Within Three Kingdoms" situation, the market development strategy goal has been very clear, but this means not only their overlapping field competition, but also their positive confrontation with NIKE, ADI and other global sports brands.

    According to Tianfeng securities data, in 2018, the market share of local brands in China's sports user market was only 28.6%, and the international brand was 54.3%. For domestic sports brands, there was still a long way to catch up with brands such as NIKE and Adi, but they were catching up quickly.

    Source: Internet + Sports

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