In fact, before the Xinjiang cotton incident broke out, Li Ning and Anta had already demonstrated strong market performance, highlighted by rising product prices and increased brand recognition.
In March this year, the international fast fashion brand H&M “declared a boycott of Xinjiang cotton products”, triggering online attention and strong protests. Subsequently, a number of international clothing brands, including Uniqlo, Adidas, and Nike, were also exposed as having made remarks about “cutting” with Xinjiang cotton.
When the incident first came to light, the author judged that this incident would become a watershed for domestic sports shoes and apparel brands against foreign rivals. To sum up, the main reasons for making such comments include the following points:
1. The clothing industry only has weak brand barriers and no other rigid barriers (including those that many brands are promoting) Fabric technical capabilities are difficult to form barriers), consumers can freely choose among countless brands, and there is no situation where no one can do without anyone;
2. After many years of After penetration, Adidas and Nike completed the full layout of products from ultra-high price to mid-to-high-end price to low-end price. For consumers, the brand effectiveness of hooks and three stripes has been greatly weakened. In other words, its premium space has been greatly reduced compared to previous years;
3. The new generation of consumers has strong spending power, but their choice of brands is different from that of the previous 70 years. The post-80s and post-80s generations are very different. Young people are very receptive to new brands, especially domestic brands, and domestic brands are also catering to the needs of this group of consumers with better product designs.
In fact, before the Xinjiang cotton incident broke out, Li Ning and Anta had already demonstrated strong market performance, highlighted by rising product prices, increased brand recognition, and more. Strong sports star spokespersons join.
In recent months, domestic footwear and apparel listed companies – represented by Li Ning, Anta and Xtep listed on the Hong Kong stock market – have set off a wave of large-scale Capital has given its own clear prediction on this matter: 2021 is very likely to become a milestone year in the history of Chinese sports shoes and clothing.
01
Li Ning is difficult to copy
There is a difference between domestic products and national fashion.
The emergence of the national tide is no longer a day or two. However, in the context of international political disputes, the spread of the word rapidly expanded, breaking the circle and further stimulating the sales of related products.
Li Ning (HK:02331) is the backbone of the rise of national fashion. Before the Xinjiang cotton incident, its stock price had already risen significantly. The core reason was to gain recognition from young consumers through the national trend concept and form a premium price.
Between 2017 and 2020, Li Ning’s stock price increased by more than 400%. During the period, operating income rose from 10.511 billion yuan to 14.457 billion yuan, an increase of less than 40 100 million yuan, but the growth rate of net profit is significantly higher than the growth of operating income, rising from 500 million yuan in 2017 to 1.698 billion yuan in 2020.
Through the “national trend” strategy and the ability to better grasp the aesthetic preferences of young people, Li Ning’s profitability has been greatly improved, and its brand power has also been upgraded. Consumers and investors are willing to pay a higher price.
But this is not a strategy suitable for all shoe and apparel companies, but it has certain particularities. The key factor why Li Ning was able to derive the “China Li Ning” brand is that, as the founder of the company, Li Ning was a former national-level gymnast who has won many world championships in global competitions and can contribute to the national trend. Give deeper brand connotation.
If other brands follow suit and create high-end national fashion brands like “China Anta” or “China Xtep”, it will be a lack of value for consumers. Persuasive. As domestic products, Anta and Xtep have been recognized, but they are not achieved entirely by positioning as a “national trend”.
Several companies also have relatively clear judgments on this. From a strategic point of view, although Anta, 361 Degrees, Xtep and other brands have launched special sports fashion sub-brands, hired spokespersons, designed co-branded models and other methods to enhance their brand power, they have not deliberately emphasized how powerful they are. “country”.
Anta and Xtep are better at carrying out multi-brand layout through acquisitions, especially at acquiring overseas brands and combining them with domestic channel capabilities.
02
FILA even surpassed Anta
Ding Shizhong’s positioning of FILA is very clear – focusing precisely on sports fashion.
ANTA Sports (HK:02020) is the most successful sports brand that uses acquisition strategies, especially its acquisition of FILA, which has become a classic.
In 2009, Anta acquired FILA’s trademark use rights and franchise rights in China at a price of HK$600 million, and brought this already lonely brand back. Chinese market.
FILA at that time The person in charge of the brand is Yao Weixiong, who has rich experience in the domestic fashion industry and once served as the general manager of L’Oréal Paris China. Being able to choose him to be responsible for a sports brand shows that Ding Shizhong’s positioning of FILA is very clear – focusing precisely on sports fashion.
Products in this segment can combine the comfort and functionality of sports shoes and clothing with the fashion sense of fashion, which is what major sports shoes and clothing companies are competing for. beachhead. Ding Shizhong’s ability to understand the importance of this track in 2009 is closely related to the investment and success of Adidas and Nike in this field:
Taking advantage of Dongfeng and Sports Fashion With Anta’s mature channels, the FILA brand was quickly accepted by domestic consumers. By 2020, the sales volume of the FILA brand will reach 17.45 billion yuan, surpassing Anta’s parent brand. The high selling price of FILA products has also brought Anta a profit margin that exceeds that of Li Ning and other domestic competitors.
Stronger profitability directly drives stronger market capitalization performance. After more than three years and an overall increase of more than 10 times, Li Ning’s market value is close to 180 billion yuan. At present, Anta Sports’ market value has exceeded 425 billion yuan, ranking first among Chinese sports shoes and apparel brands.
03
Write it at the end
Due to historical reasons, leading domestic sportswear brands Li Ning, Anta and Xtep are all listed on the Hong Kong stock market. However, among A-share listed companies, there has long been a lack of sports and sports-related listed companies.
Except for Guirenniao, which is not outstanding in the field of sports shoes and clothing, there are almost no sportswear companies. The recently listed Nike foundry Huali Group (SZ: 300979) is already the purest.
The sports shoes and apparel market has bid farewell to the rough and turbulent market, and is deepening towards high-end, culture and brand value. We have seen that the higher the price of FILA, the better the sales. Li Ning’s high-end sub-brand “China Li Ning” is often hard to find, but the low-priced Xtep has been working hard to operate. This will bring deeper inspiration to business operators and investors:
The level of cost can no longer completely determine the level of product prices. Whether it is national trend strategy or sports fashion, the cultural attributes of the brand are the scarcest and most valuable elements in consumer goods. </p
