Footwear Enterprise Dynamics: Anta Purchased 75.13% Equity Of MAIA ACTIVE

On October 16, Anta completed an acquisition that was called "everyone happy" in the industry.

Anta wrote in the announcement that the Group will conditionally purchase 75.13% of the equity of MAIA ACTIVE. After the completion of the acquisition, MAIA ACTIVE will become an indirect non wholly owned subsidiary of Anta Group, however, the transaction amount has not been disclosed.

This is not Anta's first move. On the way of "buy buy buy", Anta has already enjoyed a lot of benefits. There was the growth myth of Feile before, which became the second growth curve of Anta Group; Later, Amafin Sports launched its IPO, with an enterprise valuation of up to US $10 billion.

This time Anta is not interested in overseas brands. MAIA ACTIVE is neither small nor extravagant. It is a local women's sportswear brand and was once called lululemon's Pingdi.

Anta Group said: "MAIA ACTIVE business has formed a certain market influence among female consumers, especially in the category of yoga sports, has established consumer mentality, and has future growth potential. The Group's brand operation ability, retail management ability and supply chain management ability can help MAIA ACTIVE better develop its competitive advantage in the Chinese market."

On the day of the completion of the acquisition, the consumer and venture capital circles ushered in a long lost excitement. For MAIA, it is possible to enter the "elite" in the future; For Anta, the acquisition of MAIA can not only fill the gap, but also is a powerful declaration to enter the women's market. For the founders, cashing out at a high position is undoubtedly a perfect script at the practical level; For investors, a decent exit is also an acceptable outcome.

At present, there seems to be no loser in this acquisition.

Not long ago, Anta analyzed in an internal report that the changes in the structure of consumer groups and consumer behavior had a significant impact on enterprises. After the current consumer body changed to 90-95, women's market potential was released and the demand for outdoor sports categories grew rapidly.

According to the data from Guanyan Report.com, yoga has become the second largest form of exercise for Chinese women, second only to running. This may be one of the internal reasons for Anta's acquisition of MAIA.

Interestingly, the day after Anta announced its acquisition of MAIA, lululemon's share price rose 10.31% to $416.64, with a market value of $52.72 billion. In July 2022, Lululemon's market value has surpassed that of Adidas, and it has become the world's second largest sportswear group after Nike only by virtue of yoga clothes.

Last month, Lululemon announced its financial report for the second quarter of 2023. Both revenue and net profit achieved double-digit growth. It is worth noting that the revenue of the Chinese market surged by 61%, accounting for 12% of the total revenue. At present, lululemon has 107 stores in China, and the official disclosure of 35 stores planned to open in the world this fiscal year, most of which are in the Chinese market.

All kinds of signs show that the consumption potential of domestic women has been demonstrated in the field of sports and outdoor, and the Chinese market has become a cake in front of us. Sports giants at home and abroad are eyeing and making efforts secretly.

The international giants responded a little faster to the layout of the yoga industry. In 2019, Nike launched a series of yoga products, and Adidas invited the former CEO of lululemon as its women's business strategy consultant in 2021 to launch products such as women's sports underwear and yoga pants. Nike and Adidas have launched yoga pants in different price ranges, covering the needs of low, medium and high purchase levels.

Before long, domestic sports brand Li Ning followed suit. The price of Li Ning's yoga pants is generally less than 400 yuan, and the price of lululemon's yoga pants is 680-1480 yuan. In contrast, Li Ning's professional strength is not strong enough, mainly based on cost performance.

For Anta, Li Ning's old rival, acquisition is just one of many strategies. Before the acquisition of MAIA, Feile, once the first growth engine of Anta, had taken the lead in the yoga pants market.

In 2022, Feile launched the fitness yoga series, with the price of yoga pants ranging from 339 yuan to 519 yuan and the price of yoga vests ranging from 199 yuan to 399 yuan. This year, Feile updated the "Latte Girl" series, upgrading the original product line. Another outdoor brand of Anta, DiSant, also started selling yoga clothing products this year, with prices ranging from 790 yuan to 1990 yuan, focusing on the high-end market.

However, from the overall sales situation, yoga products do not seem to be optimistic. Tmall fele official flagship store, the sales volume of celebrity yoga pants of the same style is only two figures. Therefore, if Anta wants to conquer the female yoga market, it still needs to rely on the potential energy of professional brands and their original competitiveness to fight with lululemon. After all, consumers need brands that are more specific, professional and positioned.

For a long time, Anta has an almost obsessive pursuit of "brand acquisition".

Ding Shizhong, Chairman of the Board of Directors of Anta Group, said publicly in an interview: "With the brand operation ability of today's Chinese companies, the possibility of making an Archaeopteryx or Wilson within 30 years is almost zero, and through acquisition and taking the Chinese market as the potential growth space, it may complete a rebirth."

According to the research of QYResearch, the market size of yoga pants in China has reached 1.623 billion US dollars in 2021, accounting for 22.92% of the global share, and is expected to increase to 3 billion US dollars in 2028. A small number of deterministic industries and huge growth space have attracted capital and people. Before being acquired by Anta, MAIA ACTIVE obtained more than 250 million yuan in six rounds of financing. According to Tianyancha data, the recent two financing scales were both 100 million yuan.

Along the way, the power of capital has been escorting MAIA ACTIVE, enabling it to grow rapidly. According to Yingshang, MAIA ACTIVE's sales volume will reach 500 million yuan in 2022, and it has made a comprehensive profit. As of April this year, the brand has 32 stores in the core business districts of the first and second tier cities nationwide, and 5 stores to be opened.

According to the brand, the total number of offline stores is expected to reach 40 by the end of this year. In addition to MAIA, many local brands have also become popular brands in domestic yoga pants with category advantages and dividends of live streaming goods. However, the operation of physical stores requires more manpower, organization, sales network and capital investment. Compared with domestic emerging e-commerce channels, MAIA has obvious advantages in offline layout and store number.

For example, the "particle craze" advocated by Zhou Xun has only five stores at present, and the "Raging Laurie", which was launched by the Internet celebrity effect, has not yet found store information. Therefore, MAIA can also occupy the right time, place and people to settle in the elite. Anta's strong operation capability has been verified by Feile and Archaeopteryx. After MAIA is included in the bag, Anta will also start a frontal war with lululemon. Not only Anta, but also the game of sports giants besieging Lululemon should be brewing.

Most domestic sports brands are fought out in the red sea of popular shoes and clothing. What they fight for is cost performance, productivity and speed. While controlling costs, it is inevitable that there are some deficiencies in technology content, sports functions, etc., so the brand premium is not high. This also leads to the fact that the marketing cost of domestic brands is always higher than the R&D cost, which is difficult to be recognized by the international market.

However, Anta has found a shortcut among them, that is, "use money to buy positioning, and establish brand matrix through acquisition and merger". As Anta said when buying MAIA: "The acquisition is a good supplement to the group's female business segment, which will enhance the ability to meet the diversified needs of consumers and further strengthen the group's brand portfolio."

The turning point of Anta came in 2009. When Anta purchased the trademark use right and operation right of Feile in China with 332 million yuan, there were only 50 stores of the brand in China, still in a loss state. Today, Feile has become the second sub brand with a revenue scale of more than 10 billion yuan besides Anta's main brand.

Since the acquisition of Filo, Anta has been more committed to the "buyer" road.

Since 2015, Anta has taken Spandi, Di Sant, Kelong and Yamafen Sports Group (the parent company of Archaeopteryx and Salomon) under its management. Although these brands have not become the mainstay of Anta Group as quickly as Fiele, they have all made great achievements and grown at a fast speed.

In the first half of 2023, the main brand of Anta will achieve a revenue of 14.17 billion yuan, and Feile will achieve a revenue of 12.23 billion yuan. The total revenue of the two brands will account for nearly 90% of the total revenue of Anta Sports, and the revenue of other brands will total 3.246 billion yuan, with a year-on-year growth of 77.6%.

From the perspective of Anta's choice of overseas brands, Anta's goal is not to find the "next Filo", but to use professional brands to layout market segments, while continuing to move towards "high-end".

Take DiSant and Kelong as examples. The former is a Japanese brand starting from ski clothes, and the latter is a professional outdoor sports brand in South Korea. Cheng Weixiong, a shoe and clothing brand management expert, once told the media in an interview: "Di Sant and Kelong are professional and niche sports brands. If Anta wants to build them into 10 billion brands, it is not easy. These two brands are not as popular as FILA and have a wide audience. Moreover, this category has certain limitations, and the revenue of 23 billion yuan is already quite large."

In many acquisition cases of Anta, Archaeopteryx has attracted much attention by virtue of its positioning as the "Three Treasures of Middle aged Men". The widespread spread of social media combined with the outdoor sports trend of nearly two years has made Archaeopteryx not only capture the female group, but also become a social currency among young people.

In 2022, when the news that Archaeopteryx classic models are under the distribution system hit the hot search, many talents suddenly found that the original "Yunshe" Archaeopteryx belonged to Anta.

In August of the same year, an Anta executive said at a public event that Archaeopteryx would comprehensively benchmark Hermes in its business strategy in the future, which also demonstrated Anta's ambition to expand into the high-end market.

According to the Independent Review of the Sports Industry, Archaeopteryx had more than 150 stores in China before being acquired by Anta, but only 2 stores were directly operated. Anta took back all outlets and replaced them with more than 100 directly operated stores arranged and managed uniformly.

This kind of judgment is very important for Archaeopteryx. It not only effectively controls the chaos of channel price war, but also allows Archaeopteryx to more intuitively receive market feedback, efficiently convey brand instructions, focus on providing customers with high-quality services, and more closely match the brand image of "luxury" of Archaeopteryx.

On the micro level, unified operation, refined management, down to single stores, up to brands, and on the macro level, continue to explore new targets and growth space, which together lay the foundation for the success of Anta's strategy of "single focus, multi brands, globalization".

According to Anta's latest financial report, the revenue in the first half of 2023 reached a new high, approaching the 30 billion mark, doubling compared with the same period in 2019.

Nike and Adidas, the former market leaders, have frequently failed in the Chinese market. According to the statistics of Zinc Finance, the market share of Nike and Adidas in the domestic sports shoes and clothing industry will remain at 35-40% from 2017 to 2020, and will decline year by year after 2020, with a total market share of 28.2% in 2022.

In the 2023 midterm exam, Anta once again gave a brilliant answer. Its revenue volume has far exceeded that of Adidas China, and is slightly ahead of Nike China.

Anta, which has several sub brands, covers different consumer groups and sports scenes. The brand matrix has gradually been built and improved. The acquisition of MAIA has also made up the last weakness of women's brands.

Of course, acquisition is not easy. In order to truly achieve high-end and diversified, Anta still needs to face many challenges and risks. How to balance the collaboration and competition between different brands, how to maintain the core values and characteristics of different brands, and how to adapt to the changes and needs of different markets and consumers are all problems that Anta needs to seriously consider and solve. Only by doing these things well, can Anta truly walk out of its own sports empire.

Mi Yue, an insider in the consumer goods marketing industry, said: "This multi brand strategy is also the consistent strategy of L'Oreal and P&G. Building a multi brand matrix of the group can minimize the cost of brand operation and product development through a complete set of sop operations and group level coordination, so as to obtain greater economic benefits."

She believes that on the way to the rise of Anta, multi brand attack is certainly correct, but Anta's own digital decision-making ability and sales model change are also very important.

Mi Yue said: "From the perspective of the financial report data and the group's explanation, Anta's rapid growth in the past two years is due to the limited transport capacity of international brands, as well as factors such as the shutdown of the OEM, supply chain problems, etc.; and secondly, Anta's revenue is mainly due to the adjustment of the proportion of DTC (abbreviation for Direct to Consumer, directly connected to consumers) sales model.

Previously, Anta adopted a wholesale distribution model, that is, it was distributed by the headquarters to dealers, and then sold by dealers to consumers through the distribution network. In recent years, Anta has taken over the right to manage goods and directly sent them to direct stores or franchisees. In this way, the streamlining of sales links not only makes the organization more flexible and efficient, but also better controls the price.

Now, Anta's main brand and Fila have become the second and fifth sports brands in China, respectively. Anta, which walks on two legs, has gradually formed a situation of "one super and more powerful" among domestic brands.