Challenge Nike Adidas? The Four Major Local Sports Brands Have Been On The Right Path.

It is said that the recovery of domestic brands is on the fast track. How fast is this speed? From the performance of the domestic sports Brand Company listed on the Hong Kong stock market, it is gratifying to note that the domestic brands represented by Anta, Lining, XTEP, 31st degree and PEAK have been playing different strategies and tactics in different subdivision areas and different audience groups, and have achieved very good results.

In fact,

Domestic brands have long been expected, and "growth" and "recovery" have been the key to their performance in the middle of last year. In this annual report, apart from confirming the scale and speed of growth, we also see the brand's deep ploughing of market segments and the company's strong demand for its strategic pformation.

Driven by favorable policies and upgrading of consumption, China's sporting goods market has been on the fast track of steady growth at both ends of supply and demand, and its position in the global market is becoming more and more prominent.

The rapid growth of China's sporting goods market is obvious to all. But how are the domestic brands competing with giants like Nike and Adi?

Let's take a look at the performance of international brands.

Adidas's 2017 earnings report showed that its sales growth in Greater China reached 29% over the same period last year, exceeding the sales growth rate of 15% in the global market.

Nike in North America

In the case of continued weakness, Greater China has been growing in double-digit growth for 15 consecutive quarters.

According to the latest data in the three quarter of fiscal year 2018, Nike's revenue in Greater China reached $1 billion 336 million, an increase of 24% over the same period last year.

From the data point of view, Nike and ADI and other major international brands have attracted much attention, but under the overall perspective, it is impossible to cover all the growth of China's sporting goods market, leaving enough market space for domestic brands.

So, specifically, what is the result of domestic brands in the past year? Is there enough wisdom and motivation to expand the market space in the future? We can find out the answer from the 2017 annual report they have published recently.

The fundamentals are getting better and the difference is reflected in scale growth.

Anta sports, as the top domestic brand, maintains a significant, stable and sustainable advantage in total revenue and net profit.

Li Ning Co's reform is undoubtedly very successful, compared with 2016, its net profit of shareholders in the past year increased by 56%.

XTEP international, which represents the pformation from sports fashion to professional running shoes, is still paying the price for this pformation.

Although there is a slight increase in total revenue, the net profit growth rate is very impressive.

What secrets are hidden in revenue and growth rates?

Lining group achieved a total revenue of 8 billion 870 million yuan in 2017, an increase of 11% over the same period last year, and realized a net profit of 520 million yuan to the parent company, an increase of 56% over the same period last year (the figure has been deducted from the 10% equity income of red double happiness).

The business income of the company was RMB 5 billion 158 million yuan, and the net profit of shareholders was about 457 million yuan, an increase of 13.4% over the same period last year.

XTEP international 2017 revenue fell 5.2% to 5 billion 113 million 400 thousand yuan over the same period, and net profit fell 22.7% to 408 million 100 thousand yuan.

Anta's annual revenue grew by 25.1% to 16 billion 690 million yuan, and shareholders accounted for 3 billion 990 million yuan, up 29.4% from the same period last year.

To a certain extent, the above data also set the tone for the brand's overall performance in 2018.

Because after a whole year of adjustment and exploration last year, domestic brands have formed a stable mode for internal control and management of retail channels and companies. Otherwise, inadequate internal control and low channel efficiency will inevitably affect the overall performance of the brand.

According to the growth figures of orders in the three quarter of 2018, distributors still have great confidence in brands.

The overall growth of income and the way of branding force are different.

Take Lining as an example, the company will speed up the layout of Danskin, LNYoung and Lining spring stores. It is expected to open 15-30 stores, 100-200 stores and 10-15 stores in 2018 to expand the market for women, children and sports and leisure.

The success of the fashion week in New York made a good start for Lining's brand younger.

Therefore, in the young dominated women's sports and fashion market, Lining will relatively easily extend the potential of the brand, but the premise must be fine operation.

In the emphasis on professional functional sports equipment, Lining's brand younger is unlikely to work soon.

This will also determine the overall performance of Li Ning Co in fiscal year 2018.

According to Lining's 2017 earnings report, the company will enhance the experience of 3 major functional products in running, basketball and training.

Lining seems not to have given priority to the current football hot topic, but Anta, its biggest domestic competitor, has already begun to plan its layout on campus football and professional football.

A few days ago, Lining also participated in sponsoring the new star soccer channel in China. It also showed that the company did not give up football completely.

Lining (left one) attends star ceremony on football channel

The national fitness and basketball market has a certain mass base in China, and the scale of these three major segments continues to grow.

Lining wants to profit from it, and the product must be there. This is a great test for Lining's R & D team. If we can't make a difference in the professional sports equipment market, we will not only lose the core audience of the sports market, but will also hamper Lining's progress in sports.

In addition, the brand effect of Lining's sponsorship of CBA is far less than that of its fashion week in New York.

This leads to the question of how Li Ning Co will effectively knead its brand's history, fashion and sports functions together in the future, so that these major brand attributes can be integrated, without being independent and mutually exclusive, and it is really necessary for the management of the company to give a satisfactory answer to the market.

Although Lining is now inclined to tilt towards the "Internet + sports life experience", this is still an exploratory attempt for Lining. It is promising to move forward in this direction, but the premise is that the foundation is solid and the momentum for follow-up is enough.

Zheng Zhi endorsed Anta football equipment

In the past two years, Anta sports under Ding Shizhong has been well received. Compared with Lining, who runs all the way in the new direction, Anta sports is more calm now.

We learned from the 2017 annual report that the main theme of Anta's future is still "brand upgrading", which has led to the high cost of Anta in R & D, brand marketing and shop expansion, thus giving rise to a certain pressure on the company's operating profit margin during the period.

2017 is the tenth year of Anta sports listed in Hongkong.

In this year, Anta has experienced many important moments.

For this achievement, Anta sports has not expressed too much, but for the domestic sports brand as a whole, it is a great encouragement.

Large sports companies, like Anta, are growing up to acquire assets of international brands through mergers and acquisitions, and greatly enhance their financial performance.

However, it can not be ignored that how much will these brands take to the main brand of the company? Will they undermine the value of the original brand while contributing to the revenue?

Under the requirement of "singleness" of brand image, how to make every subsidiary brand serve the main brand, and then form cohesiveness to help the company's single main brand to increase its value, we need to consider carefully! Especially for Anta, this problem is very urgent.

It is said that Anta sports will enhance its image of Anta's main brand in 2018, and continue to be "cost-effective" brand positioning.

We should strive to achieve the goal of upgrading from "affordable" to "want to buy".

There is a brokerage analyst analysis, if the company's products

The success is expected to further enhance the unit price of future product sales and create conditions for further increase in the company's revenue.

If this is the case, first of all, we must raise the price if we want to buy.

One way brand sponsorship cross country skiing and bicycles

Compared with the two giants of Anta and Lining, the 31st degree and XTEP international are much smaller in scale, but the boat is small and good. The two Jinjiang sports companies have no choice but to challenge their brothers. Instead, they choose to avoid crowded and fierce racetracks and cultivate their expertise.

The performance of the 31st 2017 year did not bring much surprise to the market, but if we peel it off, there is still something worth savoring.

Last year, the core brand stores of 331 degrees decreased by 549 compared with the same period last year. If the amount of reduction in 2015 is reduced, the company has reduced by more than 1400.

In addition, the 31st degree children's clothing store is partly embedded in the main brand stores, so the number of stores in the former is also inevitable.

During the reporting period, the number of children's wear shops has been reduced to 1797.

Nevertheless, 31st degree has achieved its highest level in nearly 5 years in terms of revenue, gross profit and net profit.

Revenue and growth of categories in the 2017 Annual Report

The company earned 89 million 300 thousand yuan in overseas revenue in 2017, an increase of 10.7% over the same period last year.

In Brazil, the United States and Europe, they have 1241, 1030 and 378 brand shops specializing in the sale of brand products.

The company's international business is expected to become an important source of group revenue in the next three to five years.

PK Nike ADI also needs to make efforts in a second tier city, children's clothing or the best game point.

In 2017, 360 children's clothing business achieved 711 million yuan business income, accounting for 13.8% of the total revenue, children's clothing business revenue grew 9.2% year-on-year, the growth rate is the most business.

It is particularly noted that the wholesale price of children's clothing has also been reduced by nearly 5%.

In addition, 66% of children's clothing stores are located in the cities of three lines and below, and there are 9.9% and 24.1% in the first and second tier cities.

In exchange for high growth rate at low prices, 331 degrees in the field of children's clothing in the grass-roots market took the lead.

According to the data in February this year, the value of children's clothing orders reached a low double-digit growth rate in the third quarter of 2018.

The order value of children's clothing has been improved for 15 consecutive quarters since the first quarter of 2015.

The company's management believes that due to the early market layout of the group, the scale and market share has already accumulated a preemptive advantage, and the future children's wear business segment is expected to drive the group's performance to further rise.

XTEP international, which is in the same echelon with 360 degrees, is hard to speak in children's clothing business.

In 2017, XTEP continued to carry out a major reorganization of the children's Department, with a view to finding a better position to achieve more profitable growth in the future, but the effect is still not obvious. "As of December 31, 2017, the Sales Department of children's Department has maintained 250 points, and has made little contribution to the group in 2017".

The backdrop of XTEP International Children's clothing income is the strategic change of the company.

At the performance briefing, Ding Shuibo, group chairman and chief executive officer, said XTEP's three year strategic pformation had ended in 2017, and XTEP pformed from the fashion sports brand into the "China's first choice brand". I believe that the pformation results will be reflected in 2018.

XTEP international, which decided to run the market, has lost nearly 8% to 3 billion 258 million yuan in its shoe sales in the past year.

This revenue accounted for 63.7% of the company's total revenue, which also led directly to XTEP International's closing of its operating income, and its first decline in 2017.

XTEP group recently launched a national jogging festival with Xiamen Association of China.

After more than ten years of development, China's local brands have explored the most suitable way for them, such as Lining's brand culture extending to the outside world, Anta's brand upgrading as the main brand to provide ammunition and time, XTEP deep tillage market, 360 degree strength children's clothing and overseas market.

With this going on, the market structure of our local sports brands and the development path in the coming period will be set up.

But this does not mean that the enterprise will go along this road smoothly, because no matter which path to choose, the breadth of the consumer and the depth of the product can not be abandoned by any brand.

Data released recently by Nike and Adi show that the Greater China market is their fastest growing market in the global market, which means that Nike and ADI's brand discourse rights have not received any challenges in a second tier city with high purchasing power.

If our local brands, especially Anta and Lining, want to enhance their brand image, we must make more noise in the second tier cities, and drive the local brands' basic sales volume in the three or four and beyond cities.

Both head and tail should be able to cope with the infiltration of Nike and ADI in various levels of domestic market.

According to the annual reports of the above brands, children's wear market is a more favorable game point at the present stage.

First of all, the domestic children's clothing market still has considerable room for development on the scale. Secondly, the market concentration degree in this field is still very scattered. Even if it is an international brand, children's clothing market does not necessarily have a good sale. On the contrary, our domestic brands are very popular.

Finally, no matter what subdivision is in the main field, the final proposition of local brand will eventually return to the level of brand value.

At this point, local brands should express themselves.

The content should also be outside the "high cost performance", so that consumers can feel the real touch.