Fitness Market Is Growing Rapidly. What Is The Clothing Market Like?

The sports apparel market is about 300 billion. In recent years, the compound growth is more than children's clothing, close to 20%. It is the fastest growing garment industry subdivision category. Other apparel listed companies basically faced the impact of consumption iteration in 2019, and the growth rate of revenue and profit slowed down or even declined significantly. Product upgrading and brand upgrading are all important reasons. The driving force at the bottom is the national emphasis on sports, the introduction of policies and the rapid increase in the number of sports such as running, fitness, riding, swimming, ice and snow sports, and so on. Therefore, sports apparel has long enjoyed a good growth trend. Sportswear (and related equipment) is a fast-growing industry with economic growth and prosperity, and its overall growth will grow rapidly. At present, sports related industries, especially outdoor sports, have become one of the most important engines of economic growth in developed countries.

In the subdivision category, the global jogging market has increased significantly. In January 2020, the Danish sportswear brand Hummel (soccer was the main sponsor of the Danish national team) purchased Danish brands Newline and Halo to help Hummel open the jogging shoes market. In recent years, the major sports brands in China have also promoted the sustained sales growth by relying on the enthusiasm of the local governments to organize the marathon and relying on running related product lines.

Yoga and women's fitness market grew more rapidly. From 2017 to 2019, lululemon grew significantly, especially in the Asia Pacific region, with an annual growth rate of 45%. The outbreak and investment of international and domestic women's Yoga apparel brands are endless. The word "Athleisure" (Athletics and Leisure), the "sports leisure wind", has worn sporty underwear and leggings into the street everyday. It has been popular in Europe and the United States. This trend has turned the sports products into a trend symbol, opened the door to new categories, and opened up the possibility of eroding the trend of sportswear to the fashion and casual wear market.

Because of the deep foundation of the supply chain, a large number of similar head brands, such as Anta, XTEP, 31st degree, Jordan, PEAK, Hongxing Erke, noble bird and del Hui, have been produced in the country. They have gained a certain popularity and market in advertising, but in less than 10 years, they have worked hard in new product development, product design, brand technology sense and fashion sense. Opened a huge gap, formed the form of Anta and Lining, the two have maintained rapid growth, other brands have basically been thrown away more than one body position, income decline and even retreat, disappear.

Anta was courageously killed from the second echelon behind Lining, earning 8 billion 900 million yuan from 2011 and Li Ningtong to 33 billion 900 million in 2019, for Lining. Two point four Times. After the 2008 Olympic Games, the high expectations of sportswear market caused huge inventory problems. After years of adjustment, many of the former giants had fallen, but the overall industry opportunities were excellent, and new brands also had the opportunity to cut in.

In terms of supply chain, the sportswear industry in China is more mature than the development of independent brand enterprises. A company that has to be mentioned is Shenzhou International. As the foundry enterprises of Nike, Adidas, Puma, champion, MIZUNO, FILA and other head sports brands, its gross profit margin reached 32%, net interest rate was 22%, and bargaining power for downstream brands, and nearly 30 times PE in the two tier market.

Enterprises are actively developing online channels, and the online market share of the whole industry is also increasing year by year. But at present, the main marketing channels for large enterprises are traditional shopping centers and independent shops. The cost of commercial rents under the line also has great impact on the profits of enterprises. The overall clothing industry closes shop tide is still continuing, sportswear is slightly better.

Under Armour and lululemon are the two brands that are growing rapidly and emerging into the top. Apart from the details, the most prominent point is that they have found a fast growing and subdivided category that will lead to the popularization of the public. One is fitness and speed, and the other is yoga. These subdivision brings not only the fast growth bonus of brand in the professional field, but also the innovation of product form, experience and the overall change of brand sense.

Under Armour's elastic quick drying fitness suit and lululemon tight skin Yoga Pants bring consumers new experience and psychological feeling of new categories. They have gained explosive growth in recent years, and have pricing power, and also have user loyalty. Especially in foreign countries, the trend is remarkable in China, but the accumulation of consumers is not enough.

The sports brand in China is not broken through subdivision. The most notable growth is that the major brands have made marketing investment and product layout for running and basketball year after year, but they are not enough to be the breakthrough point to achieve greater breakthroughs. But we have also taken another fast growth vehicle through the promotion of the overall brand sense.

The national tide is a powerful force that has brought positive effects on the domestic brands of sports apparel industry in recent years. Lining and Anta both received the dividends, and their revenues, profits and share prices rose sharply in 2019.

More importantly, the relationship between brand and cultural confidence has been formed. In the younger generation of Chinese youth, the impression of "old land" and "low end" has become a popular brand. It can even break hands with Nike, ADI and other old tycoons in celebrity endorsement, product price and brand sense. Interestingly, as a design style and brand identity, the national tide broke out faster and faster than other costumes in the sportswear brand. This also shows that sportswear is relatively rigid and more professional in consumer cognition. Therefore, the market concentration is higher, the head card is more reliable, and the carrier is easier to become the carrier of the outbreak of the national tide.

Besides the tide of state, the merger and recreation of foreign brands is also a sharp weapon for the rise of local brands. Anta has gained further growth through its acquisition and operation of foreign brands such as FILA, ARC 'TERYX and so on. In 2019, FILA contributed nearly half of Anta's revenue and profits, and Maori contributed more than 55%.

Sportswear brand is not limited to specific sports scenes such as running, basketball, football, but into daily leisure life. This is also a bright prospect that is worth paying close attention to. It is also the opportunity for a newly established brand to make differentiated products and brands. Whether it is cut into categories or the trend of product design, the essence is to satisfy consumers' psychological enjoyment at the level of product development. Therefore, if there are enough fresh products and design level updates, start-ups will not have no chance to cut into this mature market and gain rapid growth. At the same time, the non immediacy and vulnerability of the apparel industry and the impulse buying influence of the design will make the industry more fully enjoy the dividends of online sales channels and content channels in recent years and in the future. In particular, start-ups, compared with other industries, have a better start and speed up the soil.

In a more professional field, the complexity and comprehensiveness of sports are directly related to the level of income. The development history of western countries shows that when the per capita GDP is gradually moving from US $one thousand to US $ten thousand, the main outdoor sports will be riding, skiing, diving, climbing, cross-country, surfing, rowing and so on from hiking, mountaineering and running. In 2019, China broke through the economic level of GDP per capita for the first time in ten thousand years, and the development of outdoor sports had a more stable soil.

The Winter Olympic Games will be held in our country in 2022. Since the successful bidding in 2015, the ice and snow movement has become a new growth point and a hot spot in the market. Around this concept, there are many startups (not just clothing brands), but at present it seems that they are still small. Sportswear, or even the whole category, which has been established for ten years or even longer, has only a few hundred million annual revenue growth. Represented by ice and snow sports, this is a new form of sport for most of the Chinese people. It represents the pulling force of the sports apparel market which will continue to grow in the long term trend. But these subdivision accounts for a smaller proportion in the overall market. Foreign countries have a very long history of outdoor sports development and mature industry conditions. The road to go in China is still very long. For example, many hunting, fishing, water sports, air sports and other acts and equipment are strictly controlled, and the conditions are not mature enough.

Another notable growth point is the development of children and youth market. This subdivision is not only in line with the long-term trend of growth in the general direction (enhancing the national physique and sportsmanship of the young generation), but also the market of high Maori and heavy brands, and a key contributor to the long-term consumption upgrading.

Industry perspective

"The epidemic has brought about positive changes in some industries. The consumer industry is mainly divided into three segments, one is the opportunity brought about by the return of" health ", such as medical products with sterilized immune properties, healthy food that can store up fast food, human immunity, healthy household appliances, sportswear and sports equipment.

Zheng Weihe / Chuang Chuang's founding partner

"All consumer goods are renewable. New technologies, new raw materials, new consumption groups, new consumption concepts, new consumption patterns and various new sales channels will bring all kinds of consumer goods to a new look. Sportswear products are even more so.

Bai Wentao / founder partner of share investment

"Although the epidemic affects the growth of sportswear in the short term, the trend of healthy lifestyles will not change in the long run. Especially with the continuous application of new materials, sportswear will continue to lead the development of multi-functional comfortable casual clothes.

Wang Qi / Yuan Fu Capital Partners

Note: the view comes from Qingshan capital oriented invitation and media coverage.

Impact of epidemic situation

The epidemic affected the frequency of outdoor activities, and the demand for scenes decreased significantly. Sportswear itself and the trend of sportswear driven by national tide are all affected. At the same time, due to the current industry sales mainly from offline channels, the purchase behavior itself is also greatly restricted. By mid February, 60% of Anta's stores were still suspended. The latest data show that Anta's revenue fell 20-25% in the first quarter of 2020. Generally speaking, the majority of the people who live in the house are at home and are not easy to go out for sports. The financial performance of the first half of the year is expected to be affected.

Major manufacturers are also beginning to try to promote the transformation of online business. Such as Anta actively promoting online channels, Tmall flagship store, micro mall and community sales and other ways to fully spread, and give a certain discount, in January, the group's electricity business overfulfilled the target. In addition, from February 1st, Anta launched the "full retail" project, with 30 thousand employees and dealer partners to participate in this project, all employees sell their products in WeChat's circle of friends. Resolute. Head enterprises take this opportunity to further understand and adapt to online channels, which may create greater competition pressure for start-ups. However, from the perspective of market structure, start-ups can not directly compete with giants through product design and content marketing differentiation, and can also gain early user recognition and sales growth.

After the outbreak, the sportswear industry will not be affected for a long time. When consumers are shopping in vengeance, it is also an opportunity for brand promotion and marketing. For sportswear, leisure and fashion apparel is also an opportunity for education market.

Qingshan capital Zhangye commentary

1, the continuous iteration of new materials is the fundamental reason for the development of sports apparel category.

2, the mass production in the past has paid attention to the general demand, and the flexibility of the supply chain has made the marginal demand and subdivision demand satisfy the possibility.

3, the intersection of sportswear and casual wear has a lower threshold and more players. The new brand is more persuasive than selling design.