China'S Sports Apparel Brand Counterattack

Bloomberg reported 14, China's sports apparel brand Lining's recent stock prices continued to strengthen, this year's stock price rose more than 200%. Lining's popularity reflects the overall strength of Chinese local sports brands, and the market presence of sportswear players such as Anta, 361 degree and XTEP is growing. Market participants say that after experiencing difficult trials and transformation in recent years, Chinese sportswear brands are gradually moving out of a relatively stable development path in the process of competition with international brand giants.

Local sports brand shares rose

Bloomberg said Lining listed on the HKEx 14 shares at HK $25.850, up 1.17%. This month's total rose 17%, and this year it has risen more than 288%. At this time last year, Lining's share price was only HK $6.66, becoming the largest share in MSCI Asia Pacific Index this year. Lining's share price reflects the strength of the local sports brand, and XTEP shares rose 4.33% on the 14 th. Anta's stock price also rose 12.5% last month.

As for the rising share price, Lining, general manager of fashion line, Li Gang, 14, told reporters in the global times that he did not feel surprised. With the improvement of brand power and business performance, it is a normal thing to be valued in the capital market.

Market participants say Lining's stock price rise is strongly supported by its performance. Data show that in the first half of 2019, Li Ning Co revenue reached 6 billion 255 million yuan, up 32.7% over the same period in 2018. In fact, the performance of its main local competitors is also growing. The latest report shows that in the first half of this year, Anta realized revenue of 14 billion 810 million yuan, an increase of 40.3% over the same period last year.

Wu Jincao, chief analyst of the state textile and apparel industry, told the Global Times reporter on the 14 day that the domestic sports apparel listed companies represented by Lining seized the bonus of the rapid development of the Chinese sports market, and quickly expanded the distribution system and promoted the sports resources, so as to achieve success.

Consumers are unwilling to pay the "IQ tax" again.

This year's 40 year old sports enthusiast Zhang Di told the Global Times reporter on the 14 day, in the early years, he was not ADI or Nike not wearing, "because domestic clothing is too earthy, and the quality is not good." But in recent years, Zhang Di has found that the price ratio of domestic sportswear is getting higher and higher, whether it is style or quality, which is not inferior to that of foreign brands.

Bloomberg said Li Ning Co, founded by Chinese gymnastics legend Lining, has gone through a tortuous road. The company went public in 2004, and its share price also reached its current level in 2007 and 2010. But later, because of blind expansion, revenue declined, and profits and share prices were cut off. This is also the epitome of the high inventory of Chinese sports brand and the dilemma of its operation. But later, Lining and other local brands gradually strengthened the sales transformation to cater to the market demand and gradually restored the declining trend.

As for China's sports brand, the CNBC website said that Chinese people are increasingly accepting more local brands with the tide of flu and international style. In February 2018, Lining series products debuted in New York fashion week. On the 15 th of this month, XTEP products will also be unveiled in London Fashion week. This reflects that Chinese brands are moving from imitation and simple expansion to innovation and quality improvement, and increasingly reflect the international color.

Wu Jincao believes that China's sportswear brand has experienced a wave of survival of the fittest, and some cottage brands and even well-known brands have been phased out. The whole market is gradually gathering to Anta, Lining and other head enterprises, making the relative advantages of these enterprises more prominent. "Chinese consumers are also becoming more and more mature. They realize that Chinese and foreign brands are not too large in technology, and consumption is becoming more rational. They are unwilling to pay the" IQ tax "to foreign brands, and are more willing to choose a domestic brand with higher cost performance, Wu Jincao said.

Wait 5 or 15 years?

According to market organization survey, in 2018, the scale of China's sportswear market exceeded 40 billion US dollars. In terms of brand market share, ADI and Nike occupy the top two, occupying 19.5% and 19% respectively. Anta and Lining are second brands, representing 8% and 5% of their market share. But market participants believe that according to the current growth momentum, China's local brands are launching a strong challenge to the two giants. The Chinese government is actively promoting the national fitness program and launched the action plan to further promote sports consumption (2019 - 2020) to stimulate the development of sports brands, especially local brands.

Li Gang told reporters that at present, Lining has a gap in the global brand influence and the attraction of some products, but the gap is fast approaching. The strategic planning of "single brand and multi category" has achieved initial success. In addition to the Chinese market, Lining will gradually develop the international market in the future, hoping to become an international first-class comprehensive sports brand in the shortest time.

Wu Jincao believes that Chinese and foreign sports brands are not much different in technology, and foreign brands do not have special technical barriers. But foreign products are better at concept building and marketing. Their cultural symbols have strong appeal and have stronger market appeal. In the high-end market, consumers still tend to ADI, Nike and other foreign brands. He believes that to change this situation, "probably takes 5 to 15 years."