Textile And Clothing: Domestic Products Should Be Self-Improvement, Fully Optimistic About Domestic Leading Enterprises To Seize The Market

Original title: in depth report on textile and garment industry

Introduction to the report

After the Xinjiang cotton incident, we can see from the Taotao data that the sales of domestic brands led by Li Ning and Anta in tmall's official flagship stores have been growing at a high speed since 3.24. The growth rate of Li Ning's official flagship stores from 3.24 to 4.4 was more than 200% year-on-year, and Anta was also over 100%. At the same time, the prices of "limited edition" shoes of Li Ning, Anta and other brands on major platforms have risen sharply recently, which also fully demonstrates the improvement of domestic brands' brand power

We believe that the gap between domestic brands and overseas brands in terms of overall operation capacity is rapidly narrowing. At the same time, with the increasing recognition of Guochao by consumers of generation Z, domestic clothing brand leaders have ushered in a golden period of development. We suggest that we should focus on the leading domestic brands that can undertake the flow of overseas brands, Anta sports, Li Ning, bosden and Taiping Birds, etc.

Key points of investment

The market share of local groups has increased significantly in recent five years. China's shoe and clothing retail market has entered the stage of unit number growth since 2012, and the overall scale of shoe and clothing retail consumption will reach 236.9 billion yuan in 2020, and will continue to grow at a compound growth rate of 4% - 5%. Although overseas brands still occupy the leading position, domestic leading brands led by Anta, Li Ning, bosden and taipingniao have achieved significant market share increase in the past five years.

Ten years ago, the gap between local brands and overseas brands was obvious, but at present, the gap has been rapidly narrowing, and many fields have been surpassed. Ten years ago, compared with local brands, overseas brands have greater advantages in retail management, supply chain and brand power, which makes them expand the market scale under the background of Chinese consumers' brand awareness. But now, we can see that domestic brands led by Anta have rapidly narrowed the gap with overseas brands through comprehensive self-cultivation. Anta has surpassed overseas brands in terms of single store flow performance in FILA and Descente. We believe that Anta, bosden and other brands have already possessed the comprehensive competitive strength with overseas leaders in their respective subdivisions.

Meanwhile, in terms of digitization, fast fashion companies represented by sheen and taipingniao are challenging Zara and Ling Zhi group in a new way. We believe that the development of China's e-commerce in the past ten years has given China's fast fashion brands a brand-new weapon and launched a real challenge to overseas brands.

When Chinese products meet generation Z. In addition to the innovation of operation mode, the rise of cultural confidence of post-95 consumers also makes Chinese brands at the forefront of the times continuously gain more attention from young people under the wave of "national tide". We can see that: (1) driven by China's Li Ning, Li Ning has successfully established the image of Guochao representative in the hearts of young consumers. Regardless of the age of consumers, the efficiency of big stores and discount performance, China's Li Ning is very excellent; driven by China's Li Ning, Li Ning's sales growth has recovered rapidly in 21 years, and the company is ushering in a golden age of development. (2) Taipingniao also relies on the brand-new "Taiping youth" brand positioning, more than 50 joint brands a year, and the brand-new "Chinese design" style. We can clearly see from the Baidu search index that it began to surpass overseas competitors in 20h2.

Overall optimistic about domestic leading brands to undertake overseas brand traffic, ushered in rapid growth. We believe that the flow of overseas brands after the Xinjiang cotton incident is obviously affected. On the one hand, the operation capacity of domestic leading brands has been greatly improved. At the same time, their image in the hearts of young consumers is also rapidly improving. We are optimistic that the domestic brand will undertake the flow of overseas leading brands and usher in rapid development. Key recommendations: (1) Anta sports and Li Ning, the leading sportswear track; (2) bosden, taipingniao, SEMA clothing, Hailan home; (3) biyin lefendi fashion in the middle and high-end field; (4) lolai life, fuana, mercury home textile in home textile field.

Risk tips: (1) terminal consumption demand fluctuation; (2) multi brand operation is not as expected