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Focus On The Rise Of Domestic Brands, Overseas Brands In The Domestic Market Share Is Shrinking

2021/8/24 7:08:00 0

Li Ning

According to the latest financial report, Li Ning's net profit in the first half of this year rose 187% year-on-year, exceeding that of last year. By contrast, adidas' revenue in China plummeted by 16% in the first half of the year. Previously, China has been one of the most important markets driving adidas' global performance growth.

The wind direction in sportswear is changing.

Since this year, from Nike, Adidas and other foreign enterprises' boycott of "Xinjiang cotton" caused public anger, to the "wild donation" of domestic brands in the flood disaster in Henan Province, to the attention aroused by LV Xiaojun and others wearing domestic "high-tech boots" at the Tokyo Olympic Games... A series of events have brought unprecedented attention to domestic sports brands, and the speed of the rise of domestic products is suddenly pressed the fast forward button.

The era of Chinese sports brand is coming.

The loss of Adidas

In 2020, the international brands Nike and Adidas will rank the top two in China's market share.

But in the first half of this year, their performance was astonishing.

Adidas, in particular, although its global revenue increased by 52%, the revenue of Greater China region directly fell by 16%, becoming one of its global revenue decline areas. Last year, the Greater China region contributed about 35% of Adidas's revenue, but now it's down to 19.8%.

Casper Rost, CEO of Adidas, said recently that China's market demand has been biased towards domestic brands rather than global brands.

Nike's business in China also suffered. According to the recently released fourth quarter report of 2021, although its sales volume in China increased by 17.4%, the growth rate was only 9% after excluding the influence of exchange rate, which was far lower than the 22% growth rate in the same period of 2019 before the epidemic.

The "poor management" of the two international sports brands in China in the first half of the year is largely due to the impact of the "Xinjiang cotton" incident.

In March this year, H & M, Nike, Adidas and other brands' statements in the "Xinjiang cotton" incident caused public anger, and a large number of Chinese consumers spontaneously boycotted the purchase of relevant brand products.

"Once we touch the bottom line of China, we can't talk about Nike, but we will be conquered!" CCTV commented.

The financial reports of Nike and Adi recorded the proud sales achievements of the two sports giants in China before the "Xinjiang cotton" incident in the first three months of this year.

A few days before the outbreak, Nike's quarterly report (for the three months up to February 28 this year) showed that its global sales slightly increased by 3% year-on-year due to the epidemic, which failed to meet expectations. The Greater China region, as the highlight of the event, has achieved revenue of more than US $2 billion for the second consecutive quarter, with a year-on-year growth of 51%, becoming a positive growth region of the world. For Nike, whose performance has been affected by the global epidemic, the revenue in Greater China has played a significant role in turning the tide.

During the same period, Adidas disclosed that the Greater China market recovered strongly after the outbreak, driving the whole Asia Pacific market to grow 1% year-on-year with the growth rate of 7% in that quarter.

Adidas doubled its sales in North America and greater China in the last five years. Its financial report had predicted that the Greater China market would become the fastest growing sporting goods market in the world in the next few years. However, after the "Xinjiang cotton" incident, it seems that ADI people will give up this potential market.

Domestic products are rising

On the contrary, in silence, Guochao brand is rising strongly.

In Li Ning's mid year performance report recently, a number of data have refreshed the level of the same period since its listing in 2004. Among them, the revenue in the first half of the year was 10.197 billion yuan, up 65% year on year; The net value exceeded 1.962 billion yuan, up 187% year on year.

Not only Li Ning, Anta, Tebu international and other domestic sports brands have also achieved growth. Anta's performance forecast for the first half of the year shows that its operation will grow by at least 55% year-on-year, while Tebu international forecasts that its comprehensive profit will increase by at least 65% year-on-year.

After the "Xinjiang cotton" incident, Anta Sports immediately issued a statement saying that it was starting relevant procedures to withdraw from BCI (Swiss good cotton Development Association), which it joined in 2019. Li Ning had already printed the label of "the fabric is made of Xinjiang high quality long staple cotton" before the storm.

After the domestic sports brands declared their support for Xinjiang cotton, they ushered in the first wave of "wild consumption" this year. Netizens have left messages "support domestic products!"“ The Chinese market does not welcome those who are maliciously injured. ".

After the "Xinjiang cotton" incident became a hot search, Luo Bo complained to his friends in the wechat group: "I suddenly have no shoes to wear.". Love sports shoes, she used to buy either Adidas or Nike. With the collapse of the two brand images overnight, Lobo was indignant at the brand's "eating and smashing pot" behavior in the Chinese market, on the other hand, he was worried that continuing to wear would make people misunderstand himself as "unpatriotic", so he was eager to buy new shoes online.

"At that time, Wei Ya, Li Jiaqi and other big head anchors were pushing home-made shoes. I found a lot of styles are good, want to try, but usually sold in an instant out of stock, squat a few pairs of Li Ning shoes did not squat to Luo Bo said that before because of the lack of attention, the impression of domestic brands is still "local."“ After the "Xinjiang cotton" incident, she really began to pay attention to the national brand products, "feeling that it opened the door to a new world, and now there are so many beautiful domestic sports shoes.".

Lobo's shopping cart once added more than 10 pairs of domestic shoes of different brands, and finally bought six of them. There are still many consumers like Lobo who turn to support domestic brands.

Morning star, an investment research institution in the United States, reported that the sales of Adidas and Nike tmall flagship stores in April decreased by 78% and 59% respectively compared with last year.

The sales of Li Ning and Anta increased significantly. Among them, the sales of tmall, the fashion product line of Li Ning in China, increased by more than 800% year on year; Anta's overall sales increased 59% year on year.

During the rainstorm event in Henan Province in July this year, domestic brands made contributions to the hot spot, which promoted the second wave of "wild consumption".

After Hongxing Erke donated 50 million materials in a low-key manner, its offline stores were sold out. On the online platform, the sales volume of Shuo Yin e-commerce from July 21 to 23 exceeded the total of the first half of this year; The sales volume of Jingdong platform increased by more than 52 times on the 23rd. With a large number of hongxingerke's products showing "no goods", the anchors of various platforms appeal to netizens to "consume rationally". However, with the upsurge of consumption enthusiasm of domestic products, netizens demand that "this kind of goods is out of stock, I'll sew a tag myself" and "we'll lose if the sewing machines in your factory don't smoke".

Another brand "noble bird", which just completed the bankruptcy reorganization plan at the end of June this year, was also supported by the "crazy buying" of consumers because of its low-key donation of 20 million yuan and 20 million materials. On July 24, the sales volume of kingbird children's shoes on Jingdong increased more than 10 times compared with that on July 23.

In addition, with the just concluded Tokyo Olympic Games, domestic sports brands also gained a wave of attention.

Anta, as a sponsor of the Chinese delegation's award-winning clothes, has been exposed to the gold medal winning moment of the athletes; Li Ning provided clothing sponsorship for China shooting team, diving team and table tennis team; Peak sponsored seven foreign missions, five of which wore peak costumes at the opening ceremony of the Olympic Games

Gold boots worn by Chinese weightlifter LV Xiaojun when he won the championship

During the Olympic Games, Chinese weightlifter LV Xiaojun's "golden boots" when he won the championship also caused heated discussion. This pair of "special shoes" for weightlifting is developed by Anta, with a compression limit of more than 1 ton. It is also developed and manufactured by Anta to help athletes play their role.

During the Olympic cycle, the exposure of domestic brands increased, and consumers' preference for domestic products increased, and the sales volume of related products increased significantly. According to the report released by Jingdong, the overall sales volume of Guochao sports brand increased by more than 280% on July 22 and 23 before and after the opening of the Tokyo Olympic Games.

Is the "national tide" sports style sustainable?

Even if the impact of events such as Xinjiang cotton and Henan flood donation faded, domestic brands have been widely concerned by consumers.

But Kung Fu was not practiced in a day. A few years ago, domestic brands began to focus on the youth market, and have launched the "national tide" line.

Taking Li Ning as an example, since the return of founder Li Ning in 2014, he has taken the "national tide" line. In 2018, after Li Ning's fashion product line "China Li Ning" appeared on the New York Fashion Week, a number of show styles quickly sold out of stock. Since then, Li Ning has been trying to cross the border, and launched a number of CO branded products with people's daily, Guoman, Disney, BMW, Hongqi, Weilai and Debang logistics.

Li Ning, who has become fashionable, has been recognized by the younger generation. The survey of Zhejiang securities shows that the main consumer group of "China Li Ning" is 18-25 years old, which shows that it has a high recognition among the post-95 and 00's generation.

"The impression of Li Ning style is not good-looking, so did not pay attention to. But after turning to buy domestic products, it is now found that its style is more fashionable than the design of many ADI and Nike shoes Luo Bo told Xiaguang society.

Lobo bought a "China Li Ning Paris Fashion Week Runway" sneaker after the "Xinjiang cotton" incident, which has now become her. Luo Bo said that he had originally taken a fancy to the design of shoes and had no expectations for the wearing experience, but he did not expect it to be really fragrant“ It's not tiring to walk twenty thousand steps a day. It's even easier to wear than ADI and Nike I bought before, and the price is also cheaper. "

Anta's example is equally encouraging. Last year, antajing overtook Adidas, which suffered a lot from the outbreak, and formally challenged the two major international brands that have dominated the Chinese market for years. At the end of June this year, Anta went further, surpassing adidas' market value of $62.69 billion with a market value of US $64.7 billion, becoming the second largest sports brand in the world.

In terms of market share, the gap between Anta and Adidas is also narrowing. According to Euromonitor data, Anta's market share in the domestic sportswear market will rise to 15.4% in 2020, ranking the third, and only two percentage points less than the 17.4% of Adidas II.

In recent years, the development of domestic sports brands has become better, and the share price has been constantly pushed up. Since the end of 2018, Li Ning's share price has risen more than 11 times, and Anta has also risen more than five times.

But it is undeniable that Nike and Adi are still the most influential brands in the Chinese market and loved by many consumers. In this year's tmall 618 event, the two major sports apparel giants still occupy the top two sales of related categories, and among the top 10 sales, there are only three Chinese brands, Li Ning, Anta and FILA.

Only after the "Xinjiang cotton" incident, the brand influence of Nike and Adidas may be affected for a longer time. With the termination of a large number of stars, their star endorsement and other marketing channels were terminated, and the exposure of Nike and Adidas in various media platforms decreased significantly.

After breaking the contract with Nike, Wang Yibo, a traffic star, chose to cooperate with Anta, and its fans' benefits also led to domestic brands. At the end of April, Wang Yibo's "same type" products launched in Anta's flagship store were sold for only five minutes, winning more than 41 million transactions.

In terms of R & D capability, domestic brands that started late are also increasing investment in science and technology, hoping to catch up with international brands in terms of product functionality and comfort.

As early as 2005, Anta set up "Anta Sports Science Laboratory" with a large amount of money, becoming one of the earliest scientific laboratories to study sports in China. Although Anta, Li Ning and other domestic brands have invested a lot in R & D in recent years, there is still a lot of gap compared with the investment ratio of Nike and Adidas, which is more than 7%. According to the data, Anta's R & D expenditure will be 871 million yuan in 2020, and the R & D investment ratio will be 2.45%; Li Ning's R & D expenditure was 323 million yuan, and the R & D investment ratio was only 2.2%.

Lobo said that three of the six pairs of domestic shoes she had previously purchased were returned because the upper feet were not good-looking or they were not comfortable to wear“ I think many brands still need to work hard to promote themselves, and the most important thing is to improve the quality. " Said Lobo.

With the increasing penetration rate of domestic sports activities, the future sports shoes and clothing market will still maintain a high growth rate. Euromonitor predicts that the relevant market scale will reach 599 billion yuan in 2025. In this context, the domestic sports brands with continuously improved product strength will face more opportunities and challenges.


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