In March this year, international fast fashion brand Himm "declared a boycott of Xinjiang cotton products", causing online attention and strong protest. Subsequently, a number of international clothing brands, including Uniqlo, Adidas and Nike Inc, were also exposed to have made comments on "cutting" with Xinjiang cotton.

When the incident was just exposed, the author judged that this incident will become a watershed for domestic sports shoes and clothing brands against foreign competitors. To sum up, the main reasons for making such comments include several points:

1. The clothing industry has only weak brand barriers and no other rigid barriers (including the fabric technical capabilities that many brands are promoting, and it is also difficult to form barriers). Consumers are free to choose among countless brands. there is no situation where who can't live without each other.

2. After years of infiltration, Adidas and Nike Inc have completed the full layout of products from ultra-high price to middle and high-end price, and then to low-end price. For consumers, the brand effectiveness of hooks and three bars is weakened a lot. That is to say,The premium space has been greatly reduced compared with a few years ago.

3. The new generation of consumers have strong spending power, but their choice of brands is very different from that of the post-70s and post-80s generations before. Young people have become very receptive to new brands, especially domestic brands, and domestic brands are also using better product designs to cater to the needs of this group of consumers.

ActuallyBefore the Xinjiang cotton incident broke out, Li Ning Co. Ltd. and Anta had already shown a strong market performance.Outstanding performance in the rise in product prices, the improvement of brand recognition, as well as more powerful sports star spokesmen to join.

In recent months, domestic listed shoes and clothing companies, represented by Li Ning Co. Ltd., Anta and Xtep, which are listed in Hong Kong stocks, have set off a large-scale increase, and the capital has given its own clear prediction on this matter: 2021, it is very likely to be a milestone year in the history of Chinese sports shoes and clothing.

01 Li Ning Co. Ltd. is difficult to copy

There is a difference between domestic goods and the national tide.

The emergence of the national tide has not been one or two days. ButIn the context of international political disputes, the spread of the word has expanded rapidly, breaking the circle and forming a further stimulus to the sales of related products.

Li Ning Co. Ltd. is the backbone of the rise of the national tide. Before the Xinjiang cotton incident, its share price has risen sharply, the core reason is to gain the identity of young consumers through the concept of national tide, and the ability to form a premium.

From 2017 to 2020, Li Ning Co. Ltd. 's share price rose 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 4 billion yuan, but the growth rate of net profit was much higher than that of operating income. It rose from 500 million yuan in 2017 to 1.698 billion yuan in 2020.

Through the "national tide" strategy and a stronger ability to grasp the aesthetic preferences of young people, Li Ning Co. Ltd. 's profit level has been greatly improved, and the strength of the brand has also been upgraded.Consumers and investors are willing to pay a higher price.

But this is not suitable for all shoes and clothing enterprises strategy, but has a certain particularity. The key reason why Li Ning Co. Ltd. was able to derive the "China Li Ning Co. Ltd." brand is thatAs the founder of the enterprise, Li Ning Co. Ltd. is a former national gymnast who has won many world championships in the global arena, which can give the national tide a deeper brand connotation.

If other brands follow suit and make high-end trendy brands such as "China Anta" or "China Xtep", it will be unconvincing for consumers. As domestic products, Anta and Xtep have been recognized, but they do not rely entirely on the positioning of the "national tide".

Several companies also have a relatively clear judgment on this. From a strategic point of view, although Anta, 361o, Xtep and other brands have also launched special sports fashion subbrands, hiring spokesmen, designing joint models and other ways to enhance brand strength, but they do not deliberately emphasize how "national" they are.

Anta and Xtep are better at multi-brand layout through acquisitions, especially at acquiring overseas brands and combining with domestic channel capabilities.

02 FILA even surpassed Anta.

Ding Shizhong's positioning of FILA is very clear-accurate focus on sports fashion.

ANTA Sports Products is the most successful sports brand using the acquisition strategy, especially the acquisition and operation of FILA has become a classic.

In 2009, Anta bought FILA's trademark rights, franchises and other rights in China for HK $600m, bringing the already desolate brand back to the Chinese market.

At that time, the head of the FILA brand was Yao Weixiong, who was experienced in the domestic fashion industry and once served as the general manager of L'Or é al China in Paris. It can be seen that he can be chosen to take charge of a sports brand.Ding Shizhong's positioning of FILA is very clear-accurate focus on sports fashion.

This subdivided track product, which can combine the comfort, functionality and fashion sense of sports shoes and clothing, is the beachhead that all major sports shoes and clothing enterprises are seizing. Ding Shizhong's ability to figure out the importance of this track in 2009 is closely related to the investment and success of Adidas and Nike Inc in this field:

In 2002, Adidas and Japanese designer Yamamoto launched Yamamoto. Since 2016, Adidas and rapper Kanye West have jointly launched Coconut shoes, which has been a great success.

Nike Inc's Jordan Brand began to try to integrate fashion elements into sneakers as early as 1984, and achieved great success based on the influence of Michael Jordan, and is still the number one brand in the sports fashion industry.

Taking advantage of the sports fashion Dongfeng and Anta 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 the Anta mother brand. The high price of FILA products has also brought Anta a higher profit margin than Li Ning Co. Ltd. and other domestic competitors.

Stronger profitability directly leads to more ferocious market capitalization performance.After more than three years and an overall rise of more than 10 times, Li Ning Co. Ltd. 's market capitalization is only close to 180 billion yuan, while ANTA Sports Products's market capitalization has exceeded 425 billion yuan, ranking first among Chinese sports shoes and clothing brands.

03 stumbles step by step

Special steps hobble, but the expectations given by capital are solid.

Compared with the two industry giants, Xtep International represents the survival situation of small and medium-sized enterprises in the industry: hope to keep up with the pace of the mainstream market, but also want to create functional attribute positioning, wavering.

Early Xtep to Nicholas Tse as the spokesman, focusing on sports casual shoes, more inclined to sports fashion line, although it has become a well-known brand, but the overall tone of the brand is difficult to say good.

Xtep's dilemma in sales can also be seen from the financial data. Since 2015, with little change in gross profit margin, Xtep's net profit margin has dropped from 12.02% to 6.18%, while the cost of sales has risen from 3.058 billion yuan to 4.973 billion yuan over these years.

Under the condition of little change in production cost, Xtep earned less net profit with a higher proportion of sales cost.The recognition of Xtep brand in the market is gradually decreasing.. In addition, its distribution costs and financial costs have increased to varying degrees since 2015, butPre-tax profits even fell-to 762 million yuan from 893 million yuan in 2015.

In order to reverse the decline, Xtep took some actions:

In March 2019, Xtep acquired the management rights of running shoes brand Saucony in China and hiking shoes brand Merrell for 155 million yuan.

In May, Xtep International acquired E-Land, the ultimate owner of K-Swiss, Palladium and Supra, for $260 million, of which Paladin is one of the most well-known military boot brands in the world.

In August of the same year, Xtep signed a three-year endorsement contract with Lin Shuhao, who went to play in the CBA league, and launched a signed version of basketball shoes for him.

On the surface, Xtep is imitating Anta to buy global shoes and clothing brands, but if you look closely, you will find some differences: Anta is from the starting point of professional sportswear, acquiring FILA for the layout of sports and fashion brands, while Xtep isFrom the original focus on sports fashion brands, to professional, functional products and brands, including basketball shoes, running shoes, hiking shoes.

According to the current financial data, these acquisitions and integration have not achieved the expected good results, but after the "Xinjiang Cotton" incident, the capital market expressed optimism about the development of Xtep International. The share price has risen from just over HK $3 to more than HK $10 in a relatively short period of time, with a strong performance and a price-to-earnings ratio of about 40 times earnings.

The special steps are stumbling, but the expectations given by capital are solid-the market has never been short of drama and irrationality.

04 is written at the end

Due to historical reasons, domestic head brands Li Ning Co. Ltd., Anta and Xtep of sportswear are all listed on the Hong Kong stock market, while A-share listed companies are lack of sports and sports-related listed companies for a long time.

Except for the noble bird, which is not outstanding in the field of sports shoes and clothing, there are almost no sportswear enterprises. The recent listing of Nike Inc contract factory Huali Group is already the most pure.

Sports shoes and clothing market has said goodbye to the reckless, to the high-end, culture, brand value deepening.We can see that the higher the price of FILA, the better it sells. Li Ning Co. Ltd. 's high-end sub-card "China Li Ning Co. Ltd." is often hard to get, but Xtep, who is cheap, has been working hard. This will bring deeper inspiration to business operators and investors:

The level of cost can no longer completely determine the price of the product. Whether it is the national tide strategy or sports fashion, the cultural attribute of the brand is the most scarce and valuable element in consumer goods.