"Ugly design. Easy to consume. No sense of identity. " This is the domestic sports brand in the eyes of the younger generation of consumers. Quite a taste of domestic brands. In addition, the expansion of Nike and Adidas in the domestic sporting goods market has occupied most consumers' minds. Anta, Lining and other domestic sports brand enterprises are facing great challenges.
In addition, with the strong recovery of the domestic sporting goods industry and the return to the fast growth channel, the brand new development platform period of the domestic sports brand giants has basically taken shape, and the brand is being ploughed deeply by the brands. In the second half of 2019, the competition of the domestic sporting goods industry will become more intense.
The first half of the domestic brand head company performance is commendable.
The 2019 China Daily showed that four domestic sports brand manufacturers maintained a good growth momentum in the first half of the year. Among them, Anta sports sales increased by 40.34% to 14 billion 811 million yuan, net profit of 2 billion 483 million yuan, an increase of 27.7% over the same period; Lining turnover increased by 32.6% to 6 billion 255 million yuan, net profit increased 196% to 795 million yuan, the net profit after deducting non profits increased by 561 million yuan, an increase of 109% over the same period.
In contrast, XTEP and 331 degrees were slow in revenue and net profit, respectively, achieving revenues of 3 billion 357 million yuan and 3 billion 237 million yuan. Net profits were 463 million yuan and 367 million yuan respectively, up 23% or 9.6% over the same period last year.
In recent years, there has been an upsurge in sports and fitness in our society. In addition, the income of domestic residents has been increasing. According to data released by Euromonitor in April 2019, sales of sporting goods market in mainland China amounted to 264 billion 800 million yuan in 2018, an increase of 19.6% over the same period last year.
In the first half of the year, Anta had a 8% share in the domestic market, third, and Nike and Adidas accounted for first, second of the seats. But Anta's growth is ahead of the local brands, surpassing the sum of Lining, XTEP and 31st degree, and is the largest brand in China.
Although the performance of the major brands in the first half of the year is gratifying, the sports apparel category still maintains strong growth momentum, the compound annual growth rate is 4.1%. However, the overall retail sales this year showed a downward trend, and the clothing part of CPI was negative growth. If the whole industry continues to languish, enterprises will be under pressure in the three and fourth quarter, both in terms of price and overall revenue.
With the intense competition in sports brand market, Anta and Lining have also made great changes in their business.
Anta's "multi brand" effect needs to be tested
In the past, the impression of Anta was professional sports brand. However, in the first half of this year, the debut of the new brand FILA enabled Anta to enter the fashion circuit successfully.
According to the China daily data, the turnover of Anta's main brand was 7 billion 590 million yuan, an increase of 18.3% over the same period, accounting for 51.2% of total revenue. FILA achieved 6 billion 538 million yuan turnover, up 79.9% over the same period, accounting for 44.1% of total revenue. In the same period last year, they accounted for 60.8% and 34.4% respectively. Obviously, FILA is undoubtedly a dark horse for Anta's earnings.
Behind the high growth rate, however, is a double dip in gross margin. During the reporting period, the gross profit margin of Anta's main brand was 42.5%, down 1.6% compared to the same period last year; FILA gross margin reached 71.5%, down 0.2% compared with the same period last year. In this regard, Anta explained that it was mainly due to the group's commitment to the Anta brand's ultimate cost performance, while giving distributors more rebates.
To cater for diversified consumer demand, Anta has formed a multi brand group of professional sports brands (including Anta brand, Anta children and SPRAND), fashion sports brands (including FILA, FILA KIDS, FILA FUSION and KINGKOW) and outdoor sports brands (including DESCENTE, KOLON SPORT). In addition, in the first half of this year, the acquisition of Amer Sports (amamin sports) was completed. Anta said it will build "digital big data platform" in the future.
In terms of other brand performance, the multi brand effect of Anta remains to be tested. During the reporting period, in addition to the substantial increase in Anta's main brand and FILA revenue, other brands achieved a total revenue of 683 million yuan, up 36.2% over the same period last year. Compared with the same period last year, the proportion of the total revenue declined by 0.1 percentage points, to 4.7%.
In addition, other brands lost 79 million 300 thousand yuan in the first half, up 3.8% over the same period last year. Meanwhile, the number of stores decreased to varying degrees compared with the end of 2018.
It is worth mentioning that, because the profit distribution link with distributors is not transparent enough, Anta has been repeatedly questioned by muddy water shorting agencies recently.
Lining is hard to build.
Unlike Anta and XTEP, which realize multi brand strategy with international acquisitions, Lining plays a single brand and multi category. Besides Li Ningzhu brand, it also owns Kason (Kai Sheng), red double happiness, AIGLE (Ai Gao), Lotto (Le Tu) and other brands, forming differential competitive advantage.
Since 2013, Lining's gross profit margin has increased by at least 0.5 percentage points a year. But in the first half of this year, Lining's gross margin and net interest rate were not as good as Anta's. Data show that in the first half of, gross margin and net interest rate of Anta were 56.05% and 17.43% respectively, while gross margin and net interest rate of Lining were 49.69% and 12.71% respectively.
Overall, Lining made steady progress in the first half of the year. Among them, Lining franchised dealers and Lining YOUNG respectively increased by 4.2% and 10% respectively. However, due to the influence of some direct store transfer dealers, Lining's direct sales revenue fell 8.4% compared with the same period last year. At the same time, the direct sales of the Chinese market dropped by 5.1%. With the expansion of dealers' stores, Lining's financial or pressure rises.
In recent years, Lining has made great adjustments to its brand, repositioning the brand with "post-90s Lining", highlighting the brand younger. After the 2010 performance diving, Lining, who was famous in 2018, produced several explosions: Ace shoes, "China Lining" Hoodie, Tiger Crane and double Hoodie, and so on, and announced that the "Chao" brand strategy was coming back again.
In the first half of this year, Lining continued to put forward the consumption mode with "Lining experience value" as the core, including creating young wave brand "China Lining". Making tide cards has become an important tonality of Lining brand.
Semi annual report shows that Lining sports fashion products accounted for 29%, the largest piece of sales for Lining, sales increased by 54%; its basketball, running, training and non core sectors accounted for 28%, 21%, 20% and 2%, respectively, and the former three categories are expected to become new growth points. However, in the first half of 2019, the growth of Lining's category retail sales plunged sharply, the growth rate was -8%, and the products and brands once again encountered bottlenecks.
In addition, Lining accounted for 1.6% of the sales in the international market in the first half of the year. Sporting goods giant Nike accounted for 57% of its revenue from the North American market in the 1 billion quarter of 2018, of which the Greater China region achieved an increase of 1 billion.
The international market is wandering in place, and the domestic market is fiercely competitive. Lining is hard to build in the field of sports shoes and clothing.
It can not be denied that both Anta and Lining have achieved rapid growth because of the big business adjustment. Whether the adjusted business structure can maintain 5 years or 10 years of sustained growth still needs to be tested in the industry market. Breaking the limitations of the brand, attracting more users, partners and resource providers to make the brand more scalable and iterative, maximizing the brand value is the ultimate goal of the domestic sports brand.