Focus On National Brands: Can Anta, A Grassroots Company, Transform Into An International Star

Can Anta transform from a "grassroots" to an "international star"?

In the early stage of its establishment, Anta developed indecently behind domestic brands such as Li Ning and Tebu with its "grassroots" image and explored the sinking market.

Up to now, Anta, a low-key "little brother", has overtaken "big brother" Li Ning, ranking first in the market value of China's sports brand; Recently, it has surpassed Adidas and become the second largest sports brand in the world after Nike.

So, how did Anta counter attack?

In the same way, Anta has been following the mass civilian route for many years, which makes it difficult for Anta to get rid of the labels of "cheap price" and "local flavor". Nowadays, the company is marching overseas and trying to transform from the dealer mode to the direct marketing mode. But can the dream of internationalization be realized? Can Anta become Anta of the world?

01 ? ? Surpass Adidas and become the second in the world ? ? ?? Anta is the "Maotai" in the field of sports shoes and clothing.

In the middle of this month, Anta released its performance forecast for the first half of 2021. According to the forecast, the net value of the company in the first half of the year was at least 3.6 billion yuan, up 55% year-on-year, and the net amount attributable to the parent company (excluding the influence of Amer joint venture) increased by no less than 65% year-on-year. At the close of the Hong Kong stock market on June 18, Anta Sports shares rose 6.41% and the market value reached HK $475.8 billion.

On June 18, Anta's sales in tmall 618 increased by more than 59% over the same period last year, and the sales volume exceeded 500 million yuan, becoming a domestic product and brand.

Good news has pushed up Anta's share price. So far, Anta's market value has reached HK $503.36 billion. Compared with mid November last year, the total market value of Anta exceeded HK $300 billion, reaching HK $301.2 billion. Over the past seven months, the total market value of Anta sports has increased by HK $202.16 billion.

After lengthening the time line, since June 2012, Anta Sports stock price has risen from the lowest HK $6.9 per share to HK $189.7 per share, up 2649%.

Moreover, Anta, which has a market value of HK $503.360 billion, has far surpassed Adidas, which closed on June 27 with a market value of US $62.4 billion (about HK $484.3 billion). In addition, Anta's net worth reached 5.162 billion yuan last year, which also exceeded Adidas, which had a net worth of 3.314 billion yuan.

But in the past years, Nike, Adidas and other European and American brands have been occupying the leading position in both the global and domestic sports footwear market.

Today, Anta not only surpasses domestic brands such as Li Ning and Tebu, but also surpasses Adidas, which has been ranked the second in the world. So, how did Anta do it?

02 ? ?? How to bypass Li Ning's counter attack?

Today, Anta, which can be called "Maotai" in the field of sports shoes and clothing, was once just an unknown small workshop.

In 1987, 17-year-old Ding Shizhong wholesale 600 pairs of shoes from Jinjiang, Fujian Province, and began to earn the first barrel of venture capital. After selling shoes door to door and saving 200000 yuan, Ding Shizhong returned to Jinjiang in 1991 and founded Anta with his father and brother.

At that time, Jinjiang in Fujian Province was already called the shoe capital of China °、 Domestic shoe and clothing brands such as Tebu, peak, noble bird and Li Ning have all been born. Anta, which was just established at that time, and Li Ning, which was only a year old, were just young brothers in the industry.

But at that time, Li Ning was supported by super IP such as "Prince of gymnastics". Anta, with only 200000 yuan of starting fund, did not seem to have advantages.

Anta chose to take the mass sports shoes and clothing differentiation route to enter the market. It took the lead in occupying the third and fourth tier cities with high cost performance. At the same time, the company focused on laying distribution network and receiving foreign trade orders to open sales volume. In addition, it constantly sponsored sports events to carry out brand building.

After the Beijing Olympic Games, Li Ning, however, chose a high-end development route to compete with Nike and Adidas, which set up a "tall and high" image in the hearts of consumers. But in the end, the successor failed.

At this time, Anta has a breakthrough opportunity.

In 2008, the Olympic Games were held in Beijing, and the major sports shoes and clothing factories were speeded up to make more sports clothes, which led to the overstock of stocks. Anta began to vigorously reduce inventory, closed more than 1000 offline stores.

However, due to the inventory pressure, Li Ning's performance began to decline in 2011. In 2012, the company reported losses in the eight years since its listing. According to the financial report, Li Ning's revenue in 2012 was 6.739 billion yuan, a year-on-year decrease of 24.5%; The loss amounted to 1.979 billion yuan.

As a result, Anta, which took the lead in getting rid of inventory pressure, took the cost-effective route and continuously carried out brand building, gradually surpassed Li Ning.

However, the motivation to promote Anta's explosive growth and surpass Adidas is the company's series of "buy and buy" actions.

According to pinecone finance and economics, Anta has more than 30 sub brands through acquisition, of which the typical one is FILA (FILA) acquired by Belle in 2009, which is the endorsement of Anta in the high-end market and the main growth point of the company's performance.

According to the financial report, Anta and FILA, the main brands, account for 51.4% and 43.5% respectively in 2019, which are the main force contributing to revenue. In 2020, the revenue contribution rate of FILA has surpassed that of Anta, the main brand, by 49.1% and 44.3% respectively; In terms of operation, FILA reached 4.494 billion yuan, and Anta, the main brand, was 4.449 billion yuan.

After the acquisition of FILA, Anta also acquired middle and high-end famous outdoor sports brands such as spandi and kingkow, Archaeopteryx, Salomon and Wilson. In 2021, it was reported that Anta would bid for Reebok, the top five in the world.

With the continuous expansion of the team, Anta's business keeps rising. At the same time, Anta has become an enterprise with SKU positioning across the low, medium and high-end, focusing on fashion, leisure and professional sports brands.

However, behind the acquisition of many brands is Anta's international vision. Ding Shizhong, the founder, once said, "we should not be the Nike of China, but the Anta of the world.".

But can Anta's dream of internationalization come true?

03 ? ?? Can it be Anta of the world?

Cost performance and acquisition alone are not enough

Anta is making efforts to become "Anta of the world".

In May, some media said that Adidas will sell Reebok brand, Anta and Li Ning may be in the bidding queue. Visible, Anta in the international brand "buy buy buy" action is still continuing.

In addition, Anta is also working hard to create young people's IP, to the mass professional sports brand line. Not long ago, the company signed a contract with Wang Yibo and became a sponsor of major sports events in China.

At the same time, at the beginning of this year, Anta announced the transformation to DTC mode (facing consumers directly). The content is divided into two parts: one is to vigorously develop e-commerce; the other is to change the distribution of offline stores to direct marketing, so as to open the second growth point of main brands.

But can these efforts really help Anta go global?

At present, Anta is a potential sports brand in China, but it is not enough to rely on cost performance and acquisition to go international.

The first is the hidden danger brought by the continuous acquisition action to the company's main brand.

At present, half of the company's performance comes from Feile, which makes the market question whether Feile is "Anta's Feile or Feile's Anta"

According to the financial report data, in 2020, Anta's main brand revenue was 15.749 billion yuan, down 9.7% year-on-year; The revenue of FILA reached 17.450 billion yuan, up 18.1% year on year. In addition, FILA's total revenue accounted for 49.1%, which exceeded 44.3% of Anta's main brands.

This also revealed that the rapid growth of sub brands led to the main brand's fatigue.

At the beginning of this year, Ding Shizhong, the founder of Anta, set three growth curves for the company, one of which is the innovation growth curve with Anta as the representative and technology leading the positioning of "mass professional movement".

Now, the sub brand FILA has surpassed the main brand. How can the company get through this growth curve.

As a result, after the release of the 2020 financial report, Anta established the transformation to the DTC mode to relieve the fatigue of the brand.

The transformation of DTC mode can improve the rate of reaching customers, grasp the needs of customers, and realize efficient and rapid unification in the management of people, goods and fields. It can also be decentralized to greatly improve the efficiency of brand operation and promote the superposition of multi brand operation efficiency.

However, the change of distribution agent operation to direct operation also means that the original wholesale mode with low gross profit is transferred to the retail mode with high gross profit. Not friendly to Anta's main brand Mao.

Secondly, Anta has been taking the public cost-effective route, but the cost-effective brand has been difficult to lead the international trend of sports shoes and clothing.

According to observation, Anta has sponsored many domestic sports events, but only a few international sports events have been sponsored by Anta, mainly Nike and Adidas.

In addition, it is the problem of positioning and design.

Anta has always been synonymous with "cheap price and local flavor" due to its long-term cost-effectiveness. At present, Li Ning is out of the circle because of the "national trend", and has landed in Paris fashion week, setting off a "national trend" all over the world. In 2021, the latest spring and summer series released at the Paris fashion week at the same time is divided into four colors: "ground, water, fire and wind".

Li Ning out of the circle, the threat to Anta is not small. However, the problem with the two companies is that it seems that the national trend can emerge from the circle, but leading the international trend depends on the brand, that is, R & D strength.

In recent years, Anta's main brands have launched nearly 100 types of IP cross-border products, including NASA series, Sprite co branded shoes, Dragon Ball super co branded series, and limited series of national flag and star logo products, but none of them are popular in the circle. It can be seen that its design in the market did not stir up a lot of waves.

The profile reveals that Anta's R & D capability needs to be improved.

Generally speaking, Anta still has a long way to go in the international market, which is an excellent track, if it wants to go international only by cost performance and acquisition of other big brands. However, Anta's success also shows that grassroots enterprises can also go to the country and even the world. Whether Anta can become a big international brand in the future, let time witness.