Breaking one billion in just 8 minutes and three billion in 100 minutes, by 12:00 AM on the night of the 11th, Anta delivered sales of 670 million yuan within 24 hours. On the Tmall 11.11 Global Shopping Festival outdoor sports category rankings, brands under the Anta Group, including Anta, ranked third. Meanwhile, according to the Anta Group’s stock market performance on November 15, the Anta Group’s market value reached as high as 95.838 billion Hong Kong dollars. The Anta Group has further solidified its position as a benchmark in China’s sporting goods e-commerce market and reinforced its standing as the country’s top sporting goods company.
With the arrival of the “Globalization 4.0” era, Anta Sports proposed the strategic concept of “Single Focus, Multi-Brand, Full-Channel” in its 2016 financial report. Around this strategy, Anta Sports has laid out the sports industry more systematically. What kind of strategic thinking is reflected behind Anta Sports’ rise from a market value of 18.7 billion Hong Kong dollars at its initial listing in Hong Kong to nearly 100 billion today? What sports businesses has Anta Sports laid out?
Steady revenue growth, market value approaching 100 billion, building a respected sports brand
In 2007, the Anta Group successfully listed on the Hong Kong stock market with a market value of 18.7 billion Hong Kong dollars. Then, driven by the 2008 Beijing Olympics and the post-Olympic effect, China’s sporting goods manufacturing industry experienced unprecedented growth. From 2007 to 2011, an average of two new Anta stores opened every day, increasing the total number of Anta stores nationwide from 4,716 to 7,778. Domestic sports brands, including Anta, actively expanded into third- and fourth-tier markets. In 2011, through its own strategic layout and marketing, Anta Sports surpassed Li-Ning for the first time to become China’s top sports brand.
With the development of the sports industry, Anta Sports achieved steady growth in both revenue and market value. According to Anta Sports’ semi-annual financial report, the company’s revenue increased from 5.11 billion yuan in 2015 to 7.323 billion yuan in 2017, a growth rate of 43.3%.
An analysis of Anta Sports’ financial reports shows that its business revenue mainly comes from three sources: sports apparel, sports footwear, and sports accessories. Among these, footwear and apparel are the most significant income contributors. In the first half of 2015, footwear and apparel accounted for 95.35% of the group’s revenue; in the first half of 2016, this figure was 95.95%; and in the first half of 2017, it rose to 96.57%.
Analysis of Anta Sports’ financial reports in recent years shows that the term “multi-brand” appeared once each in the 2013 and 2014 reports. In 2015, it was mentioned four times. By 2016, the Anta financial report formally proposed the “Single Focus, Multi-Brand, Full-Channel” strategy. This has become a key strategy for Anta Sports to consolidate its position as the leader in China’s sporting goods industry and to rank among the world’s top sporting goods companies.
Focusing on the mass market, laying out multiple brands, and creating diversified sports products and services
In recent years, with China’s economic development, the sports manufacturing industry has grown rapidly. At the same time, as the sports industry expands and national fitness becomes a national strategy, public enthusiasm for participating in sports has continued to rise. Relying on a market of nearly 1.4 billion people, Anta Sports adheres to a strategy focused on the mass market for its brand users. Regarding the concept of “single focus,” Ding Shizhong, Chairman of the Anta Sports Board of Directors, once said in an interview, “We don’t sell high-priced products. We want more people to be able to afford sports shoes and to enjoy the joy of sports. That is the value of our enterprise and the mission of all Anta people.”
Nike and Adidas, which entered China in the 1980s and 1990s, have maintained strong positions. With the expansion and segmentation of the sports market, there is higher demand for both sporty fashion and professional equipment. Market players are no longer simply categorized as “sports brands,” but are segmented by price levels (low, mid, high), different types of sports, sports-lifestyle or professional performance characteristics. At the same time, with the globalization of economic development, Anta, as a local brand, is also focusing on the international market. And Anta Sports’ globalization strategy is being realized through the practice of “multi-brand.”
1. Successful acquisition of Fila and achieving profitability becomes a key part of the multi-brand strategy
Unlike Nike and Adidas, which target high-end consumers in first-tier cities, Anta Sports initially positioned its market in second-, third-, and fourth-tier cities. To secure a place in the mid- to high-end segment, the quickest and most effective method was to introduce a new brand.
In August 2009, Anta announced the acquisition of the Italian sports and lifestyle brand Fila (FILA) from Belle International. Thus, the Italian brand Fila, founded in 1911, became Anta’s springboard into the high-end sports goods market. According to Sports BANK, Fila began turning a profit in 2014, and by the first half of 2016, its revenue had reached 20% of Anta Sports’ total income. Building on Fila’s successful case, Anta found a powerful tool to break through its growth ceiling. At the same time, Fila’s success affirmed Anta’s attempt to lay out a multi-brand strategy.
2. Jointly establishing a joint venture with Descente, targeting the winter sports market
With Beijing’s successful bid for the Winter Olympics, attention to winter sports, especially snow and ice events, has been growing. The domestic ice and snow industry market is still in its infancy, and related sports equipment and facilities are almost in a “blank period.” Under the goal of getting 300 million people involved in winter sports, the demand for snow and ice equipment and apparel is enormous. Anta Sports is leveraging the Olympic opportunity to continue expanding its business layout horizontally.
In February 2016, Anta Sports announced that it would invest 150 million yuan to establish a joint venture with Descente Global Retail Limited, a subsidiary of Tokyo-listed Descente Japan, and Itochu Corporation’s subsidiary Itochu. The joint venture introduced “Descente,” a well-known Japanese functional sports apparel brand specializing in skiing equipment. Descente will also mark the beginning of Anta’s journey into the next niche market and represents a great opportunity for Anta to catch up with international giants in the future.
3. Continuing to expand into the mid- to high-end market, acquiring Sprandi and forming a joint venture with the Korean brand Kolon
To better penetrate the mid- to high-end market and join the ranks of international sports brands, after acquiring Fila and forming a joint venture with Descente, Anta continued to make bold moves in its multi-brand layout. In September 2016, Anta successfully acquired the internationally renowned sports brand “Sprandi.” It targeted the growing hiking and road running segments. Sprandi launched a sports comfort technology system tailored to the characteristics of popular activities in China such as walking and running, and developed several product series.
On February 22, 2017, Anta made another move in its multi-brand strategy. ANKO, a wholly-owned subsidiary of Anta Sports, along with Kolon and other partners, signed a joint venture agreement to establish a joint venture group. The group’s main business is the exclusive operation, marketing, sales, and distribution of certain products under the Kolon Sport IP and trademarks within the region. Kolon’s product line includes men’s and women’s outdoor wear, children’s outdoor wear, footwear, bags, and accessories such as hats, trekking poles, and trekking socks. This will further expand Anta’s range of sports products.
4. Targeting the huge children’s market
In addition to the adult sports market, Anta has laid out three brands: Anta Kids, NBA, and SPRANDI. On January 1, 2008, the Anta Kids division was launched, along with the creation of the “Anta Kids” brand (ANTA KIDS), with product lines divided into 3–6 year old toddlers and 7–14 year old children. ANTA KIDS maintained rapid growth in channel development in 2011 and 2012. By the end of 2012, it had approximately 700 stores, with annual sales of 250 million yuan and an average monthly store sales of 30,000 yuan. The 2013 sales target was 400 million yuan, with a total of 700 children’s clothing stores. According to Anta’s 2017 first-quarter financial report, retail sales of Anta Kids products increased by over 30%. The 2017 mid-year report showed that the number of independent Anta Kids stores grew to over 2,100, nearly ten times the number in 2009.
In addition, while achieving strong growth in the mass children’s market, Anta Sports has also begun laying out children’s business in the high-end sports market. After acquiring the mid- to high-end brand Fila, it created the children’s fashion sports brand FILA Kids. Meanwhile, Kolon, another member of the multi-brand family, has also made moves in the children’s brand sector. In August 2017, Anta acquired the Hong Kong-based mid- to high-end children’s clothing brand Little Moons for 60 million Hong Kong dollars. Through this acquisition, Anta Sports further strengthened its capabilities in the mid- to high-end children’s clothing market and improved the segmentation of children’s apparel.
Full-channel marketing, achieving multi-dimensional online and offline sales models under the new retail model
In its marketing, Anta has always adhered to the concept of full-channel marketing. Anta has achieved comprehensive coverage of offline stores, shops, and department stores in second-, third-, and fourth-tier cities. At the same time, leveraging the internet model, in addition to operating its official brand malls, it also collaborates with major domestic e-commerce platforms such as Tmall, Taobao, JD.com, and Vipshop to integrate online and offline channels.
An analysis of Anta’s 2015–2017 semi-annual financial reports shows that Anta Sports’ offline stores increased from 7,340 in the first half of 2015 to 9,041 in the first half of 2017, a growth of over 23%, expanding at a rate of over 10% per year. The number of offline stores in Mainland China, Hong Kong, Macau, and Singapore also increased from 544 in the first half of 2015 to 869 in the first half of 2017, a growth of 59.7%, averaging nearly 30% per year. Meanwhile, the newly established Descente stores had reached 21 by the first half of 2017.
In terms of offline event marketing, Anta Sports has signed NBA star Klay Thompson and leveraged his star power to conduct a series of branded and international marketing campaigns. Utilizing a diverse brand portfolio, it has laid out in different niche markets. At the same time, to actively capture the children’s sports goods market, Anta has conducted a series of promotional activities offline, hosting the Wannian Games and establishing the Anta Growth Academy.
In practicing public welfare, as a leading enterprise in China’s sporting goods industry, Anta has consistently fulfilled its corporate social responsibilities. From the 2008 Wenchuan earthquake to the 2010 Yushu and Zhouqu earthquakes in Qinghai and Gansu, the 2013 Ya’an earthquake in Sichuan, and the 2014 Qujing earthquake in Yunnan, Anta has been present. In 2013, Anta Sports, together with the Chinese Olympic Committee, the Samaranch Foundation for Sports Development, and the Champions Foundation, launched the Olympic Public Welfare Alliance to contribute to the development of sports in underdeveloped western regions. On July 10, 2017, on the 10th anniversary of Anta’s listing, Anta Sports launched the “Thrive Together Public Welfare Plan,” supporting the sports dreams of young people in underdeveloped areas through equipment donations, quality education, and the promotion of sports courses. Additionally, Anta Sports partnered with the Shanghai True Love Dream Public Welfare Foundation to establish Dream Centers, helping young people in underdeveloped areas grow up healthy and happy. According to Sports BANK, Anta has so far built three Dream Centers in Changting, Fujian, and four in Midu, Yunnan. From next year through the next 10 years, it aims to build 500 Anta Dream Centers.
In e-commerce, during last year’s 11.11, Anta Sports achieved online sales growth of over 100%. While peers still use e-commerce primarily as a means to “clear inventory,” Anta’s e-commerce business has evolved into a platform offering a wide range of online flagship products, including online-exclusive items for Anta, Anta Kids, Fila, Fila Kids, and the NBA series. In 2017, e-commerce sales reached 670 million yuan, a 66% increase compared to the same period in 2016.
Teaming up with the Olympic Committee and sponsoring the Winter Olympics, Anta's clothing brand has become synonymous with the Chinese national team
On September 28, 2017, Anta Sports reached a strategic cooperation agreement with the Beijing 2022 Organizing Committee for the Olympic and Paralympic Winter Games, becoming an official sports apparel partner and joining the highest tier of sponsors for the 2022 Beijing Winter Olympics. Its sponsorship involvement with national teams and the Winter Olympics, however, has been a long-term commitment.
Since first signing with the Chinese Olympic Committee in 2009, Anta has engaged in deep and enduring collaboration with Chinese sports. In 2010, Anta signed an agreement with the Winter Sports Administration Center, and in August 2014, it became the first partner of the 2022 Winter Olympics Bid Committee. Then in April this year, Anta further became the apparel sponsor for thirteen national teams under the management of the Chinese Winter Sports Administration Center, including the national short track speed skating team, national speed skating team, national figure skating team, national curling team, national ice hockey team, national freestyle skiing aerials team, national snowboard big air and slopestyle team, national snowboard parallel giant slalom team, national luge team, national bobsleigh team, national skeleton team, national cross-country skiing team, and national alpine skiing team. Anta has now established strategic partnerships with 24 national teams, and its clothing has become synonymous with the Chinese national team.
Source: Sports BANK