Sports Brand Financial Report Anta Resistant Li Ning Is Gaining Momentum

Lululemon stole the limelight Anta Li Ning is gaining momentum

Lululemon, who entered from the subdivision track, has outshone Nike and Adidas.

Recently, Canadian sportswear brand lululemon released its financial report for the second quarter of fiscal year 2022. The financial report shows that as of July 31, 2022, Lululemon's revenue in the second quarter of fiscal year 2022 increased by 29% compared with the same period last year, to $1.9 billion, and its net profit reached $289 million.

Lululemon has developed steadily in the Chinese mainland market, with a year-on-year growth of more than 30% in net business revenue and a three-year compound annual growth rate of nearly 70%. For the development of the Chinese market, Lululemon mentioned in April this year when he announced the five-year development plan of "Power of Three x2". It is expected that by the 2026 fiscal year, the Chinese mainland will become the second largest market of Lululemon in the world.

In contrast, Nike and Adidas, as foreign players, continue to decline in the Chinese market.

In the Greater China market, Adidas' revenue has declined for five consecutive quarters, and Nike has also declined for three consecutive quarters. Previously, it was reported that Adidas CEO Rothschild had made mistakes in China and would leave his post early next year, three years earlier than the end of his original term.

In fact, the competition pattern of China's sports market has changed, such as sorting out the semi annual reports of 2022 of domestic sports enterprises such as Anta Group, Li Ning, Tebu, 361Du, etc.

The most striking point is that Anta Group's revenue in the first half of the year exceeded Nike China for the first time.

The financial report of Anta Group shows that in the first half of 2022, Anta Group will achieve a revenue of 25.965 billion yuan, up 13.8% year on year. According to the data provided by Anta Group, its revenue volume in the first half of the year is equivalent to 1.1 Nike China, 2.1 Li Ning and 2.13 Adidas in the same reporting period.

Li Ning and Tebu also handed in good transcripts. In the first half of 2022, Li Ning's revenue and profit increased by 21.7% year-on-year to 12.409 billion yuan; The revenue of the special step increased by 37.5% to 5.684 billion yuan, and the net profit reached 590 million yuan, a year-on-year increase of 38.4%.

The situation of sportswear brand players is changing quietly.

Adi Nike was upstaged

On August 23, Anta Group announced its performance in the first half of 2022, and the report showed that Anta realized an operating revenue of 25.965 billion yuan; Li Ning, behind Anta, had a revenue of 12.4 billion yuan in the first half of the year; The third ranked Special Step had a revenue of 5.68 billion yuan in the first half of the year; The fourth ranked 361, with a revenue of 3.65 billion yuan.

In contrast, Anta Group has ranked first in the domestic sports market, and has also surpassed the performance of adidas international sports brands in the Chinese market. According to the data, Adidas' revenue in the first half of Greater China was 11.785 billion yuan.

Anta Group said its revenue volume in the first half of the year was equivalent to 1.1 Nike China and 2.13 Adidas in the same reporting period.

From the perspective of the whole sports market, compared with Chinese enterprises that have constantly broken through their revenue, international sports brands have encountered "acclimatization".

On August 4, Adidas disclosed its performance report for the first half of 2022. The revenue of Greater China was 1.723 billion euros, down 28.4% year on year. After excluding exchange rate factors, the revenue of Greater China fell 34.8% year on year.

This is the fifth consecutive quarter of decline in adidas Greater China. In addition to Adidas, Nike has also declined for three consecutive quarters.

According to the market intelligence data of Magic Mirror, from March 2021 to July 2022, among the top overseas sports brands, the sales of Adidas Taoxing e-commerce platform have a negative year-on-year growth for one consecutive month, while the sales of Nike Taoxing e-commerce platform have a negative year-on-year growth for 12 months.

However, lululemon, who is famous for subdividing the track with yoga pants, is a rare exception. According to Magic Mirror data, Lululemon has been selling well on Taobao and Tmall since 2020. According to the recently released White Paper of Magic Mirror for the first quarter of 2022, Lululemon's sales on Taobao and Tmall reached 560 million yuan in the first quarter of this year, up 82.1% year on year.

At the same time, the financial report shows that Lululemon's revenue and net profit in the second quarter of fiscal year 2022 are on the rise, with year-on-year growth of 29% and 39.42%. On the whole, compared with Nike and Adidas, Lululemon, the main yoga pants category, has a slight advantage in revenue growth and net profit growth.

Yang Dayun, a strategic expert in the Chinese clothing industry, told the Times that from the overall performance of the past two years, the demand of the sports market was becoming saturated, and the growth trend of Nike and Adidas, which had previously accounted for a relatively high market share, was falling within the normal range.

Yang Dayun also added that the rise of Chinese sports brands in the Chinese consumer market has also affected the performance of Adidas and Nike. With the improvement of the design ability, level and brand promotion ability of Chinese local enterprises driving performance growth, the advantages of Nike and Adidas will be gradually compressed.

In an interview with the media, Adidas CEO Luo Side also admitted: "We don't know enough about consumers, so we have left space for those Chinese competitors who do better."

"Today's Chinese consumers like (products) to have a 'Chinese feeling'. What is the 'Chinese feeling'? Adidas will certainly study it and try to solve it to find the feeling of belonging to Chinese consumers. Although it is difficult, it should not be an unsolvable problem for internationally known brands." Rothschild said.

Darcy Jupp, an analyst at GlobalData Apparel, said that Adidas has lagged behind its competitors, and the products it provides are poor. Its strategy of relying on Chinese sales to expand is also hindered by the current situation of the Chinese market.

However, it should be noted that the statistical cycle of Nike's financial report is different from that of other brands, and there is a time difference.

The performance of Anta Group, Li Ning, Tebu and Adidas in the first half of the year is from January to June 2022, while Nike uses the data of the third and fourth quarters of fiscal year 2022, that is, from December 2021 to May 2022.

According to this data, Nike's revenue in Greater China is 3.721 billion dollars, which is 23.681 billion yuan at the exchange rate on the day of the performance announcement. However, this does not include the revenue generated by June 18, nor does it include the revenue generated by Nike's brand Converse.

Still need to close the gap

Although the former big brothers have shown signs of fatigue in the Chinese market, and domestic sports brands have also developed rapidly, there is still a long way to go before Anta or Li Ning can reach international famous brands.

A person in the clothing industry told the Times that Anta is competing with Nike with the brand revenue of the whole group, which is not really "beyond". The multi brand operation ability of Anta Group is commendable, but there is still a big gap between Anta Group and Nike in terms of the brand power of a single brand.

According to the "2022 Top 50 Most Valuable Clothing Brands in the World" released by the international market research organization Brand Finance, Nike's brand value increased by 9% to US $33.2 billion, ranking No. 1 for a second time. The brand value of Adidas ranks 5th, Anta 17th and Li Ning 44th.

In fact, Anta and other domestic brands still face their own problems to be solved.

For example, Anta Group has made a breakthrough in revenue, but its net profit performance is not as good as that of other domestic brands. In the first half of the year, Anta's net profit was 3.95 billion yuan, down 6.6% year on year; Li Ning's net profit was 2.19 billion yuan, up 11.6% year on year; The net profit of Special Step was 590 million yuan, up 38.4% year on year; The net profit of 361 degree was 550 million yuan, up 37.2% year on year.

At the same time, the performance of FILA brand under Anta Group began to decline.

In the first half of 2022, FILA brand achieved revenue of 10.78 billion yuan, down 0.5% year on year; The operating profit was 2.426 billion yuan, down 22.8% year on year.

Anta said that in the reporting period, the areas where the epidemic situation rebounded and stores were closed were mainly concentrated in the first and second tier cities, and FILA was more distributed in these areas, so it was greatly affected.

"In fact, the growth rate of FILA has already slowed down, and it is not surprising that there was a decline in the first half of the year. At the same time, the importance of FILA to Anta is self-evident. If it continues to decline, it will be a great challenge for Anta." The above people in the clothing industry said to the reporter of Time Weekly.

Whether it is Anta, Li Ning or Special Step, 361 degrees, there is still room for progress in the basic research and development of domestic sports brands.

According to Anta's 2021 financial report, its R&D investment in 2021 accounted for 2.3%, while that of Li Ning in the same period was 1.83%, that of Special Step was 2.5%, and that of 361 ° was 4.16%. However, according to relevant media reports, Nike and Adidas account for 5% to 10% of R&D. According to the report of the Prospective Industry Research Institute, the total number of Nike * * * * has reached 4534, about 8 times that of Anta, and the number of * * * * * * * worth more than 5000 dollars has reached 661, about 22 times that of Anta.

Domestic brands also recognize the importance of R&D and constantly strengthen their professionalism.

On September 5, Tebu said that in the next 10 years, it will invest 5 billion yuan to help China's road running industry, including product research and innovation, events and athlete support. Anta Group also predicts that by 2030, the cumulative investment in research and development will exceed 20 billion yuan.