Why Can Anta Ding Shizhong Squeeze Into The Richest 15 Richest List In The Global Fashion Industry?

At this moment, the global sports brand is embracing its golden age.

There are only 15 days left until the end of 2019. The coming 2020 will be called the "sports year" because of the Tokyo Olympic Games. It is no exaggeration to say that the upcoming 2010s is the ten year of sports brand and the ten year of global competitive brand competition.

Despite its rising stars and its own turmoil, the US sports giant Nike still takes the lead. The German sports brand Adidas and Puma have made a magnificent turn, and Skechers has been sitting on the second largest footwear brand in the United States, behind Nike. New brands such as lululemon become the biggest black horse in ten years.

In China, in 2011, when Lining's revenue would exceed 10 billion yuan, Anta was dramatically overturned and the latter became the largest sporting goods company in China. And after the founder's return and several years of internal transformation, Lining finally embarked on the tide of national rise and national self-confidence in 2018. He returned to China in a high-profile manner with "China Lining". Last year, revenue reached a target of 6 billion years ago, recording 10 billion 500 million yuan.

However, at the moment, the domestic sports market pattern has been initially established, and Anta, who earned 24 billion 100 million yuan last year, is sitting firmly in the leading position. It has made the most important acquisition of the global sports industry this year. In March this year, the consortium of Anta group and AnameredInvestments, a Chinese private equity fund, invested 4 billion 600 million euros to acquire the sports equity of the parent company of the first ewe parent company. After the completion of the transaction, Anta held 57.94% stake.

XTEP, the third place, bought 260 million international sports brands including K-Swiss, Palladium and supra for $260 million, aiming at the outdoor sports market. At the same time, it made fashion promotion by landing in London Fashion week. It seems to try to imitate Anta's multi brand group and Lining's fashion strategy.

Standing at the starting point of the next ten years, the capital market is more urgent for the future. Especially for Anta, who has just swallowed amamin sports, the acquisition is just the beginning. How to operate the international sports group with the "Fujian experience" will be the key to the overall development of Anta Sports Group in the next five years.

In December 11th, Anta sports (02020.HK) held an investor reception day in Shenzhen, detailing the strategic planning and deployment of amamin sports in the next 5 years with the help of Boston consulting group. Under the strategy of big brands, big channels and big markets, shoes and clothing, direct business and Chinese business will become the focus of the 5 years' development of amamin sports.

Anta also made 5 years of financial guidance for amamin sports, including increasing sales from 5% over the past 10 years to 10 to 15% in the next 5 years, and improving profitability.

The measures of the "Five Year Plan" include brand restructuring. The brand combination mode of amamin sports turned to focus single brand mode, and plans to create 3 single brands with 1 billion euro income volume, that is, core outdoor brand ARC TERYX, outdoor brand SALOMON and sports equipment brand Wilson.

After taking over Amafen sports, Anta will further enhance its international management capability and truly move towards the role of the global sports giant.

The signal that Anta wants to sort out the complicated brand matrix of AMF has been released. At the end of November, according to a source familiar with Bloomberg, Anta is considering selling Precor, a fitness equipment brand of amamin sports, at a price of about $500 million. Precor is mainly composed of treadmills, indoor bicycles and other fitness products.

According to insiders, although Anta hopes to build and expand most of the brands acquired from amamin sports, fitness equipment is not the core asset of its growth strategy. At present, several companies and private equity funds have indicated initial purchase intention, and the selling process may start as early as next year. Anta declined to comment.

The five year plan is to make amamin sports shoes and footwear business, increasing the sales of shoes and clothing products from 40% to 50% in 18 years.

Third, the retail transformation has increased the proportion of DTC direct selling business revenue to SAP from 30% in 2018 to 30%. Integrated group resources accelerate the updating of the global retail system, giving consumers a better retail experience.

Fourth, to accelerate the development of China's market and raise the market share of amamin sports in China to 5% in 2018 to 15%, especially in the Chinese market, such as the SALOMON, and so on. It is hoped that the number of ARC TERYX stores will expand from 100 or more to 300 to 400, and SALOMON business will also extend to the field of shoes and clothing, and expand the Chinese market direct stores.

Fifth, develop new management incentives and strategic guidelines. Amamin sports CEO and the main management continue to lead the company, all brand executives and core personnel remain behind after the acquisition. Management incentives will focus on long-term value creation, and the new board will also provide strategic guidance to management.

According to the research report released by Da and Anta, Anta is entering a new round of transformation and growth. With the completion of the acquisition of amamin sports, the company has arranged its five-year growth strategy. The bank believes that after the acquisition of Amer, the company can further consolidate its leadership in the mainland market and help the company to internationalized, reiterating the rating Anta's "buying" and believing that Anta is the industry's first choice.

Although the 2019 fiscal year has not yet ended, Anta group has released earnings beforehand this month. According to the preliminary calculation of the company, as at the end of December 2019, net profit in 2019 will be no less than 45% compared with the previous year's 4 billion 100 million yuan, with an analysis and estimate that its net profit in the 2019 fiscal year is likely to be as high as 6 billion yuan. Operating margins will also rise, mainly due to Anta brand and other brand products sales continued strong growth, resulting in the company's 2019 fiscal year revenue growth of more than 35%.

However, the announcement said that the figures did not include the loss of MascotJVCo (Cayman) Limited of the joint venture company (JVCo), and JVCo was a holding company of AMF sports. The group said earlier that JVCO was expected to bring a loss of less than 650 million yuan to Anta group's report in the process of sports integration.

With the strategy of "single focus, multi brand and all channels", the group handed over the best report card in 11 years last year, and its revenues, operating profits and profit attributable to shareholders reached a record high, and maintained double-digit growth for five consecutive years. In 2018, group sales increased by 44.4% to 24 billion 100 million yuan compared with the same period last year, net profit increased 32.9% to 4 billion 103 million yuan, gross profit margin increased 3.2 percentage points to 52.6%, and operating profit increased 42.9% to 5 billion 700 million yuan compared with the same period last year.

According to fashion business Express monitoring, Anta group has never been in a mess since it has been hit by short selling agencies this year. Anta shares have risen steadily this year, rising nearly 100% to HK $71. In October, Anta's market value exceeded HK $200 billion, recorded HK $201 billion 700 million, surpassing the dark horse lululemon in recent years, becoming the third largest sports apparel group in the world, behind Nike and Adidas, and far away from Lining, the biggest competitor in China.

However, Lining has performed well in the capital market this year, with its share price soaring from HK $8.2 at the beginning of the year to HK $24.25 today, or up to 195%, and its current market value is about HK $56 billion 100 million.

According to data from the "Forbes real time rich list" and the Bloomberg billionaire index list, the US media BusinessInsider concluded that the 15 richest men in the global fashion industry today are worth nearly $400 billion. Ding Shizhong, chairman of Anta sports board, is the only Chinese fashion group owner who is worth $5 billion 800 million. He also served as chairman of the amamin sports board.

Ding Shizhong was born in Jinjiang, Fujian in 1970 and participated in the establishment of Anta in 1991. In 1999, Ding Shizhong urged the world champion Kong Linghui to be the spokesman of Anta brand with 800 thousand heavy funds, and pioneered the marketing mode of "sports star + CCTV" at home, so that Anta moved forward from the OEM to the branding of Jinjiang shoe enterprises, and rapidly expanded the influence of Anta, and promoted the strong growth of sales from 20 million to 2 hundred million.

In the field of sports marketing, Anta is the first batch of adopters and beneficiaries.

Subsequently, Anta completed the construction from production to brand wholesale, focusing on two or three line city penetration. Beginning in 2004, Anta sponsored the Chinese men's basketball professional league for three consecutive years, becoming the only designated partner of sports equipment in the CBA professional league. Anta also ushered in the rapid development of enterprises. In 2007, Anta was listed on the Hong Kong stock exchange. In 2011, Anta squeezed Lining, the first domestic sports brand owner to change hands.

In the field of sports marketing, Anta is obviously the first batch of early adopters and beneficiaries. After clarified the brand image of professional sporting goods, Anta has been consolidating the right to speak in professional sports events over the past 10 years. This strategy will obviously continue in the next 5 years.

At the end of October this year, the International Olympic Committee held a ceremony at the international Olympic Museum in Lausanne, Switzerland, and formally announced that Anta will become an official sportswear supplier of the International Olympic Committee until the end of 2022. This is another important milestone for Anta to become the official partner of the Chinese Olympic Committee from 2009 to 2024 and the official partner of Beijing Olympic Winter Games and Paralympic Games in 2022.

According to the contract, Anta will provide sports equipment for International Olympic Committee members and staff, including the 2020 Winter Olympic Games in Lausanne, the Tokyo Olympic Games in 2020, the Beijing Winter Olympics in 2022, the Youth Olympic Games in Dakar in 2022, and the customized sportswear for the staff of International Olympic Committee Lausanne headquarters.

Anta brand vice president and CMO Zhu Chen ye also said not long ago that the 2020 Olympic Games is a top priority for Anta. With many international top events being held in East Asia, such as the Tokyo Olympic Games, the Beijing Winter Olympic Games, the world cup, the Asian Games and the Asian Cup, China's sports industry will enter a development cycle. In this cycle, sports marketing will face many opportunities and challenges.

However, marketing of mainstream channels such as professional events and CCTV is obviously not enough for today's sports brands. At the moment of younger, trend oriented and fragmented sports industry, Nike, Adidas and other global sports brands are actively changing, adding new directions such as social media, digital transformation, fan community building, and at the same time seize the initiative in women sports, yoga and other emerging categories.

FILA has become the growth engine of Anta sports, and its annual sales contribution is expected to exceed Anta's main brand.

Anta, who holds the FILA trump card, has got a ticket to the next cycle. In 2009, Anta acquired the FILA China's right to operate the multi brand strategy, which proved to be one of the most correct decisions Anta made in the past 10 years.

Last year, FILA's annual growth rate reached over 80%. It has become the biggest growth engine of the group's performance. In the next three years, sales will enter 10 billion clubs and upgrade from sports Nouveau to top three brands in the domestic high-end market. Group executive director and Anta brand President Zheng Jie even said that without the acquisition of FILA, Anta could hardly make the decision to acquire amamin sports.

According to Anta's third quarter report, FILA brand retail sales increased by 50% to 55% over the same period last year. FILA brand, because of a few retail outlets, will make revenue growth slightly higher than the growth rate of water. Benefiting from the rapid growth of scale and the gradual maturity of new shops, FILA's brand profit contribution has increased significantly. In the future, with the close proximity of shops, the further expansion of the proportion of mature stores will contribute to the further improvement of operating margins. FILA brand continues to grow at a high rate, and annual growth rate is expected to exceed 50%.

The group also said that according to the current trend of rapid growth of FILA, FILA's contribution to the whole year is expected to exceed Anta brand for the first time. The Japanese outdoor brand Descente acquired by Anta is also considered by the industry to have the potential to become the next FILA. The sales growth of the brand reached 200% last year due to its low base.

The second ticket that Anta received was the Anta child ANTAKIDS strategy launched in 2008. Betting on Sports children's clothing is now starting to gradually release results.

In September this year, Anta children launched the new series of "New York fashion week China day" to become the first Chinese professional sports children's clothing brand on the international stage. With the 80 and 90's becoming the main force of consumption, their next generation has begun to form their own fashion view. The concern and trust of domestic brands has been rising. Children's clothing is regarded as the key to open up new markets by domestic clothing brands. Anta children are determined to take this opportunity to seek greater breakthroughs at the beginning of the new 10 years.

At present, Anta children have nearly 3000 stores nationwide, and opened the first sports science laboratory in China, covering 22 provinces and 4 municipalities directly under the central government. After entering second 10 years, Anta children began to target the international market, and now they are gradually distributing potential markets such as Southeast Asia and Russia.

Under the guidance of Anta's main brand, Anta's children and FILA's three carriages, Anta built a sound driving force for growth. In the domestic sports market, the Anta channel has achieved a relative balance in the distribution of the second tier cities and the sinking market. By the end of 2018, there were 12188 stores in the Anta group, accounting for more than 30% of the shopping malls, and 40% of the second tier cities. At the same time, most of the brands purchased by the group locate the high-end consumer market, providing space for the premium of group elevation.

After taking over Amafen sports, Anta will further enhance its international management capability, balance itself in the domestic market and international influence, and really move towards the role of global sports giants, representing China's brand and the global sports brands such as Nike and Adidas.

In the latest report, Soochow textile service analyzed that competitive advantage of mass consumer goods represented by sportswear would bring agglomeration effect. Excellent entrepreneurs, outstanding management team, good organization and motivation, and the channel control capabilities, supply chain organization capabilities, and continuous investment in product development and brand supported by strong cash flow, coupled with continuous youth of brand and product, have gradually improved the market share in various subdivision tracks.

In the face of uncertainty in the retail market, many industries choose conservative expectations. But it is certain that the next five years of the sports giant can still be expected.