Original title: how to look at Anta apart from FILA

Economic Observer reporter Ye XinranOn July 8th, Anta Sports (2020.HK) announced its results for the second quarter and the first half of the year. According to the announcement, in the second quarter of 2021, the retail value of Anta brand products (in terms of retail value) increased by 35-40% year-on-year. The retail value (in terms of retail value) of FILA-branded products increased by 30-35% year-on-year; the retail value of other brand products (in terms of retail value) increased by 70-75% year-on-year.

In the first half of 2021, the retail value of Anta brand products (in terms of retail value) increased by 35% 40% in terms of retail value compared with the same period last year. The retail value of products of other brands (in terms of retail value) increased by 50% to 55% compared with the same period last year; the retail value of other brand products (in terms of retail value) increased by 90% to 95% compared with the same period last year.

At the same time, on July 8, Anta Sports announced the strategic objectives of the group's Anta main brand for the next 5 years and the rapid growth of the "winning Plan LEADTOWIN" in the next 24 months.

Specifically, the Anta brand will achieve a compound annual growth rate of 18-25% in the next five years; online business will grow at a compound annual growth rate of more than 30%, reaching 40% in 2025; and continue to strengthen the layout of first-to third-tier cities, accounting for more than 50%. The number of shopping malls doubled; and the overall market share increased by 3 to 5 percentage points.

Different from Li Ning's strategy of constantly promoting its own brand, Anta's multi-brand matrix covers different consumers and consumer levels, but the problem is that FILA is already ahead of the main brands at the rate of dark horse growth. From the growth point of view, the market is more concerned about the performance of FILA as a "top student" and the future of a number of high-end brands acquired. What the market values is Anta's ability to accumulate experience and transplant after the successful operation of FILA.

Apart from FILA, how much imagination does Anta have?

After Anta's main brand lags behind

In 2019, Anta disclosed FILA's performance in its annual report for the first time. Before this, I do not know how many people do not know that FILA belongs to Anta, including now, I do not know how many people do not know that high-end outdoor brands such as Disante, Kelon and Archaeopteryx also belong to Anta.

The rapid growth of FILA has made it particularly obvious that the growth rate of Anta's main brand has slowed down. In 2019, the main Anta brand achieved revenue of 17.45 billion yuan, an increase of 21.8% over the same period last year, accounting for 51.4% of the total revenue, accounting for 14.77 billion yuan of total revenue, an increase of 73.9% over the same period last year, accounting for 43.5% of the total revenue.

By 2020, FILA's revenue will surpass that of Anta's main brand. In 2020, the revenue of Anta's main brand was 15.749 billion yuan, down 9.7% from the same period last year. The revenue from Fila was 17.45 billion yuan, an increase of 18.1% over the same period last year.

In the brokerage research report, a large part of the analytical point of view given to Anta by the agency points to the fact that the injection of new momentum from international brands has made up for the slowdown in the growth of Anta's main brands. However, although Anta Group has grown into a clothing brand company with many brands, the first thing that comes to mind when it comes to Anta is that it is still a domestic sports brand.

When Anta's second, third and fourth curves are concerned by the outside world, Anta also began to return its attention to this 30-year-old sports brand-Anta brand.

At the press conference on the strategic goals of the Anta brand for the next five years held on July 8, Anta stressed that all the goals and plans announced that day were aimed at the Anta brand, not Anta Group, nor other brands in the group.

In August last year, Anta released a big piece of news: it launched a new business model called "DTC", or DirecttoConsumer, which will integrate 70% of Anta brand distribution stores into direct operation within five years.

Since the establishment of Anta, Anta brand has adopted the wholesale model, relying on dealers for rapid expansion, growing to more than 10,000 stores in the highest period. But since the second half of 2020, Anta has chosen to be a heavy asset and put some of its distribution stores on its own.

Starting in the second half of 2020, Anta spent 2 billion yuan to buy 2100 Anta branded stores from 11 regions. A research report by Puyin International pointed out that the repurchase of dealers' stores had a net negative impact on the company's revenue in the second half of 2020 by 1 billion and a net negative impact on net profit of 20 million to 30 million.

The target plan points out once again that the efficiency of DTC stores will increase by more than 40% in the next 24 months, accounting for 70% of Prida.

In addition, more than 400 million will be invested in the next 24 months to strengthen digital capacity building, doubling the number of effective members to 120 million by 2025, with a member contribution rate of 70% and a member repurchase rate of 40%.

Compared with Li Ning, market commentators were more worried about Anta before, unlike Li Ning's endorsement of "Olympic champion", Anta accumulated less in cultural soft power.

As a matter of fact, Anta has been making up lessons in this area. In recent years, Anta has been in cahoots with Olympic events. In 2009, Anta won the TOP-level official partner of the Chinese Olympic Committee and signed up to 2017, going through two Summer Olympic Games and two Winter Olympic Games. In 2016, Anta successfully renewed its contract with the Chinese Olympic Committee, and its status as a sponsor of sportswear will continue until 2024. At the same time, Anta won the sponsorship rights of the 2022 Beijing Winter Olympic Games, becoming the only sportswear brand among the official partners of the Beijing Winter Olympic Games.

On July 27, 2020, Anta Beijing Winter Olympic Games licensed merchandise flag style sportswear was unveiled, which is the first time that flag elements are allowed to be used in commodities.

For Anta, the "double Olympic campaign" of the 2020 Tokyo Olympic Games and the 2022 Beijing Winter Olympics is the key to bringing the growth curve of "new domestic products" to a prominent position. In this target plan, Anta said that taking advantage of the commanding heights of the sports brands of the Olympic Games, the brand concept of "Love Sports China has Anta" will win Olympic marketing, develop high-end goods of "champion series", and launch brand-new "champion stores". Focus on the layout of the mainstream business district in first-and second-tier cities.

Several key words: professional personality, women and children

From the speech delivered on July 8th by Zheng Jie, executive director and president of Anta Group, and Wu Yonghua, executive director of Anta Group and CEO of professional sports brand group, we can sum up several major development directions of Anta brand in the future.

First, professional plus personality. Zheng Jie pointed out that according to third-party research data, when Chinese sports and fitness people buy sports shoes and clothing, 60% of consumers will consider the function of the product, and more than 40% of consumers will consider intelligent technology and ergonomics. At the same time, the minority sports category shows a high double-digit growth, behind these specific figures, we can see that consumers' professional knowledge of sports has been rapidly improved. On the other hand, the mainstream consumers in the new era have an increasing demand for product personalization. "Specialization, differentiation and personalization have become a core driving force for the growth of the sporting goods industry."

From the perspective of specific measures, the Anta brand plans to invest more than 4 billion yuan in research and development in five years, with running, basketball and women's categories as the core categories. It is estimated that by 2025, the annual sales of running shoes will increase from 20 million pairs to 40 million pairs; the annual sales of basketball shoes will increase from 6 million pairs to 12 million pairs; and the scale of the women's category will approach 20 billion.

Anta specifically lists the goals of the women's category and the consumer insight behind it. Zheng Jie pointed out that from the data of sports and sports consumption, female consumers are playing a more and more important role in the sports category. The fitness activity frequency of Chinese women has exceeded that of men by 25%, more than half of them exercise regularly more than three times a week, the average annual fitness expenditure of women is also 15-20% higher than that of men, and the growth of women's sportswear is 2-4% higher than that of men's clothing. "these figures also give us greater confidence that women will become one of the most important hot spots for the growth of the entire sports market in the future."

In addition, Anta proposed in its goal to consolidate Anta children's market leadership position: focus on the four major scenes of running, outdoor, football and basketball, strengthen children's exclusive sports science and technology research and development, and help children's sports events and training camps; by optimizing the channel structure to maintain high store efficiency growth, online business accounted for more than 40% by 2025; market share increased significantly to consolidate children's market leadership.

This is also related to the development potential of the children's market. Zheng Jie pointed out that the children's market for sporting goods is a very important emerging market. Compared with the adult market, the share of the top ten brands in the children's market is relatively scattered, only 16%.

In response to questions from investors, Ding Shizhong, chairman and CEO of Anta Group, pointed out that "the Anta brand is positioned as a Volkswagen professional because we believe that the mass market has the greatest potential in China's sporting goods market."

From the brokerage research report, Anta Sports in the financial strength, capital operation, incubation of FILA and other aspects of performance, is the market to Anta Sports growth recognition composition. But apart from FILA and the high-end brands acquired by Anta, Anta is still the same "Anta". Driven by the above goals, Anta's imagination is still waiting for Anta to answer.