Same-store sales growth was weak, order orders fell, and profit margins were under pressure... In 2012 Olympic year, local sports goods companies did not seem to have a good year. They were deeply troubled by the excess inventory after the Beijing Olympics and they all cleared their products with discounts. This kind of bad news has come a long way. Both the first-line market and the capital market are under unprecedented pressure.
All the time, Anta and Li Ning competed for the status of the mainland's sports goods brother. Both of them continued to expand their stores in the mainland. In 2011, Anta’s operating income reached 8.905 billion yuan, which was not more than 25 million yuan from Li Ning, and was clearly superior in terms of profit performance. Ding Shizhong, chairman and CEO of Anta Sports, does not seem to have much reason to celebrate. He publicly stated that in the next six months to one year, the industry situation is not optimistic. This has been verified in the May ordering meeting. Anta recorded a double-digit decline in orders in the fourth quarter of 2012, and the total order volume for the annual sales fair recorded a year-on-year decrease in high single-digit percentages.
So, what is the current predicament of the local sporting goods industry? Is it just a phased adjustment under the combined effects of the economic cycle and the industry cycle, or is it that the industry has ushered in a fundamental change? As an industry leader, how does ANTA respond to the severe situation engraved? Ding Shizhong answered this candidly when interviewed by this newspaper. Between the lines, he showed the thinking and responsibility of the industry leaders.
Sticking to the basic plate "21st Century": In 2011, the performance of listed sportswear companies in the local sports industry slowed down, and the stock price fell sharply. Li Ning's operating income experienced a negative growth of 5.2%. The growth rate of your operating income dropped to 20.2%. Has the local brand entered the bottleneck of growth?
Ding Shizhong: In the second half of 2010 to 2011, many companies in the industry did experience pressure and the market has reflected. However, China’s sportswear market has a large capacity, and it has a high standard of economic development and a good sports atmosphere, per capita expenditure, and clothing. The proportion of sales in China is obviously low. China's local sports apparel brands have grown at high speed for nearly two decades. There has been an adjustment period of one to two years. It is normal to not misunderstand the adjustment period for the industry or which brand is not working.
Of course, the pre-industry competition is oversupply, some companies in the adjustment period may be eliminated more quickly, and the concentration of brands will be higher and higher; some brands will have too much goods, some shops will open too much, and they will need to go through the digest of inventory. . The adjustment of the industry takes about two years to complete, and there are still many opportunities for powerful brand enterprises.
"21st Century": The degree of industry concentration has increased, and eventually there are several?
Ding Shizhong: Within five years, there may be a lot of living. However, if you live well, you will have five companies. You do not believe that you will walk. Now there are dozens of brands, and everyone lives well. However, you look at the automotive industry, beverage industry, household appliances industry... There are five companies in every industry that can survive.
"21st Century": Adidas announced the first quarter of 2012, the Chinese market increased by 26%, international brands to strengthen the layout of the second and third tier cities, is it right? Pressure on local brands, had to speed up the adjustment?
Ding Shizhong: As early as in 2008, the layout of international brands in the second and third tier markets was very complete. No city could not see their stores. The recent development efforts are almost the same as in previous years.
Between 2008 and 2011, there was little growth in international brands, and the growth rate of domestic brands was quite fast. In 2008, adidas sales had reached 100 billion, Anta sales were only 3 to 4 billion, and Anta’s revenue in 2011 was 90. A billion, not much difference with Adidas. However, the rhythm of some local brands is not well controlled, inventory has some pressure, discount promotions, causing the industry to follow up and produce a "domino" effect, which is basically the situation. We cannot simply rely on sales in 2011 and 2012 to assert that the growth of international brands has exceeded domestic brands.
Market share can prove everything, and the basic disk of local brands has not declined. After 2008, everyone competed in the same market. The international brands in the first-line market were relatively strong, and we were stronger in the second and third-line markets. This pattern did not change much.
"21st Century": The second and third tier cities are upgrading their consumption. Will the past advantage of local brands not diminish?
Ding Shizhong: To see the progress of local brands, this progress is faster than international brands. First, several major sporting goods brands in China have a larger overall market share than international brands. In addition to Nike and Adidas, international brands have basically not increased their market share. Second, professional capabilities have improved. Most of the sponsorships are taken by international brands. For example, 90% of basketball players wear international brands, and now 90% of them wear domestic brands. Thirdly, consumer recognition is increasing, and brand reputation is falling. We have been Do market research, ask Nike, Adidas or like Anta, Li Ning, 361 degrees, in the past, 10 people may be 9 individuals to speak directly international brands, and now this proportion is shrinking. All these prove that the overall strength of local brands is improving and consumer acceptance will be higher and higher.
In terms of sports sponsorship resources, stores, and supply chains, domestic brands are basically on the same level as international brands. I dare to say that China's clothing and apparel industry is truly competitive with the world's leading crocodile.
Transformation "retailer"
"21st Century": The 2011 annual report shows that Anta has only increased more than 200 stores, far lower than in previous years, will the 2012 growth rate continue to slow down?
Ding Shizhong: After 2008, local brands used the Olympic Games and sales grew rapidly. However, the more people are optimistic about it, the more cautious the action needs to be. It is from 2008 that many brands have problems. The basic strategy of Anta in 2012 is cautious, sound and healthy. Our growth will maintain a basic level in the industry. After four years of the Olympic Games in 2008, it can be understood that it is a cycle. Moderate adjustment is normal, slow down, and then run again.
"21st Century": 2012 is the Olympic year. Shouldn't it be a forceful year?
Ding Shizhong: Brand strength does not necessarily represent the market, it must exert force. In every major Olympic year, opportunities are well managed and brands can be improved. However, do not think that brand awareness can be reflected immediately from sales. This effect is gradually released.
"21st Century": After 4 years of rapid growth, what exactly do you need to make adjustments?
Ding Shizhong: Management. China's indigenous sporting goods brands, the past development model is basically "brand plus wholesale", that is, the first advertisement to the brand to make, and then sell the goods to wholesalers is over, to think about the future from "wholesale" to "retail", The entire supply chain process must be considered.
"21st Century": From wholesale to retail, where are the main points of change?
Ding Shizhong: If it is a "brand plus wholesale" model, brand owners may not consider the point of view of the store, only consider the needs of the wholesaler level, in the retail model, it is necessary to take into account the conditions of the store under the distributor The demand for stores is more important than wholesalers. In 2012, Anta will implement an IT integration project. It is expected that by the end of next year, IT systems will basically cover 70%-80% of stores.
Anta all took a single store order, the original order is the wholesaler and franchisee orders, now the country's 8000 stores, 40% of the stores are opened by their own dealers, about 60% are franchisees to open, to strengthen the franchisee shop terminal Management, like the dealers themselves, requires that each store must be ordered separately. At the same time, under the traditional ordering system, the proportion of replenishment is relatively small, and we are thinking about how to make the replenishment mechanism more flexible in the future. The pressure of the industry's inventory is so great. Relying on IT systems, Anta must increase the response speed of service dealers.
Business differentiation: “21st Centuryâ€: In the industry, some companies’ brand transformation has encountered setbacks. During the adjustment period, Anta will encounter similar risks.
Ding Shizhong: The brand ultimately needs to be put into operation. The essence of the operation of the brand is the ability to operate. For example, the same factory foundry Anta shoes, Anta gave them the same price, some shoes can earn 10%, and some can only Earn 3%, which is the difference in management capabilities, management, branding are all doing management.
The essential difference is not only the differentiation of the brand, but more importantly the difference in the operation. How to achieve business differentiation? This is a question of returning to business. For example, as early as five years ago, we worked with professional design agencies in the United States, Japan, and South Korea to provide design. The benefits of every ANTA advertising investment may be higher than others. China's manufacturing is still our strength, right? These are all differences. Our most obvious possibility is to use personal differentiation. 90% of the people cultivate themselves. There may be 90% of some companies who rely on external recruits and have lower labor costs than competitive brands.
"21st Century": In terms of products, does Anta do differentiation?
Ding Shizhong: Differentiation is gradually taking shape. First, brand building is differentiated. Second, the level of specialization of products is increasing. For consumer groups of non-professional sports, cooperation with fashion elements will increase.
"21st Century": The FILA acquisition in 2009 was a test of your multi-brand operation. How does it perform now?
Ding Shizhong: Actually, Anta Kids and Anta Life are two sub-brands, not exactly equivalent to Anta's main brand. Anta is a mass brand focused on professional sports. FILA should be a high-end brand, which is between life leisure and professional sports. Both should achieve differentiation in quality, target groups, and channel access.
I don’t want FILA to make 1000 stores at once. It’s also impossible to choose four cities in Beijing, Shanghai, Guangzhou and Chengdu. Now there are more than 200 stores, all of which are the best shopping malls and shopping centers in China. In Beijing's Shin Kong Place, domestic brands couldn't get in. But FILA still went in. They got their approval. Ping effect sells first, and the price is 30% more expensive than international sports brands. Why can we sell 30% more? The goods must be better.
"21st Century": Still looking for opportunities for multi-brand expansion?
Ding Shizhong: The acquisition of a brand does not mean that this opportunity exists. In the future, Anta is an integrated company that focuses on sports brand management and sports, leisure, fashion, and multi-brand operations.
"21st Century": To the present day, it is widely believed that you have a strong personal learning ability. Is this a talent or a habit that can be nurtured the day after tomorrow?
Ding Shizhong: When it comes to learning ability, first of all, it is the dedication to the cause and the love of the cause. Why did you study? Because your career is here, you must continue to learn and continue to charge. Where to charge? First of all, always pay more attention to the business you are engaged in and learn insights. For example, when we walk to the mall, we sometimes go to a brand that is not our industry, study other people's products, and provide insight into changes in consumer trends, like the clothes you wear. We will all look at the brand; secondly, to improve our learning ability, we must go with more masters. No matter the enterprise or the individual is the same, I would like to talk to the master. I like to keep in touch with the outstanding talents from all over the world, not only in the entrepreneurs or the industry but also in the artists. I also like to contact.
All the time, Anta and Li Ning competed for the status of the mainland's sports goods brother. Both of them continued to expand their stores in the mainland. In 2011, Anta’s operating income reached 8.905 billion yuan, which was not more than 25 million yuan from Li Ning, and was clearly superior in terms of profit performance. Ding Shizhong, chairman and CEO of Anta Sports, does not seem to have much reason to celebrate. He publicly stated that in the next six months to one year, the industry situation is not optimistic. This has been verified in the May ordering meeting. Anta recorded a double-digit decline in orders in the fourth quarter of 2012, and the total order volume for the annual sales fair recorded a year-on-year decrease in high single-digit percentages.
So, what is the current predicament of the local sporting goods industry? Is it just a phased adjustment under the combined effects of the economic cycle and the industry cycle, or is it that the industry has ushered in a fundamental change? As an industry leader, how does ANTA respond to the severe situation engraved? Ding Shizhong answered this candidly when interviewed by this newspaper. Between the lines, he showed the thinking and responsibility of the industry leaders.
Sticking to the basic plate "21st Century": In 2011, the performance of listed sportswear companies in the local sports industry slowed down, and the stock price fell sharply. Li Ning's operating income experienced a negative growth of 5.2%. The growth rate of your operating income dropped to 20.2%. Has the local brand entered the bottleneck of growth?
Ding Shizhong: In the second half of 2010 to 2011, many companies in the industry did experience pressure and the market has reflected. However, China’s sportswear market has a large capacity, and it has a high standard of economic development and a good sports atmosphere, per capita expenditure, and clothing. The proportion of sales in China is obviously low. China's local sports apparel brands have grown at high speed for nearly two decades. There has been an adjustment period of one to two years. It is normal to not misunderstand the adjustment period for the industry or which brand is not working.
Of course, the pre-industry competition is oversupply, some companies in the adjustment period may be eliminated more quickly, and the concentration of brands will be higher and higher; some brands will have too much goods, some shops will open too much, and they will need to go through the digest of inventory. . The adjustment of the industry takes about two years to complete, and there are still many opportunities for powerful brand enterprises.
"21st Century": The degree of industry concentration has increased, and eventually there are several?
Ding Shizhong: Within five years, there may be a lot of living. However, if you live well, you will have five companies. You do not believe that you will walk. Now there are dozens of brands, and everyone lives well. However, you look at the automotive industry, beverage industry, household appliances industry... There are five companies in every industry that can survive.
"21st Century": Adidas announced the first quarter of 2012, the Chinese market increased by 26%, international brands to strengthen the layout of the second and third tier cities, is it right? Pressure on local brands, had to speed up the adjustment?
Ding Shizhong: As early as in 2008, the layout of international brands in the second and third tier markets was very complete. No city could not see their stores. The recent development efforts are almost the same as in previous years.
Between 2008 and 2011, there was little growth in international brands, and the growth rate of domestic brands was quite fast. In 2008, adidas sales had reached 100 billion, Anta sales were only 3 to 4 billion, and Anta’s revenue in 2011 was 90. A billion, not much difference with Adidas. However, the rhythm of some local brands is not well controlled, inventory has some pressure, discount promotions, causing the industry to follow up and produce a "domino" effect, which is basically the situation. We cannot simply rely on sales in 2011 and 2012 to assert that the growth of international brands has exceeded domestic brands.
Market share can prove everything, and the basic disk of local brands has not declined. After 2008, everyone competed in the same market. The international brands in the first-line market were relatively strong, and we were stronger in the second and third-line markets. This pattern did not change much.
"21st Century": The second and third tier cities are upgrading their consumption. Will the past advantage of local brands not diminish?
Ding Shizhong: To see the progress of local brands, this progress is faster than international brands. First, several major sporting goods brands in China have a larger overall market share than international brands. In addition to Nike and Adidas, international brands have basically not increased their market share. Second, professional capabilities have improved. Most of the sponsorships are taken by international brands. For example, 90% of basketball players wear international brands, and now 90% of them wear domestic brands. Thirdly, consumer recognition is increasing, and brand reputation is falling. We have been Do market research, ask Nike, Adidas or like Anta, Li Ning, 361 degrees, in the past, 10 people may be 9 individuals to speak directly international brands, and now this proportion is shrinking. All these prove that the overall strength of local brands is improving and consumer acceptance will be higher and higher.
In terms of sports sponsorship resources, stores, and supply chains, domestic brands are basically on the same level as international brands. I dare to say that China's clothing and apparel industry is truly competitive with the world's leading crocodile.
Transformation "retailer"
"21st Century": The 2011 annual report shows that Anta has only increased more than 200 stores, far lower than in previous years, will the 2012 growth rate continue to slow down?
Ding Shizhong: After 2008, local brands used the Olympic Games and sales grew rapidly. However, the more people are optimistic about it, the more cautious the action needs to be. It is from 2008 that many brands have problems. The basic strategy of Anta in 2012 is cautious, sound and healthy. Our growth will maintain a basic level in the industry. After four years of the Olympic Games in 2008, it can be understood that it is a cycle. Moderate adjustment is normal, slow down, and then run again.
"21st Century": 2012 is the Olympic year. Shouldn't it be a forceful year?
Ding Shizhong: Brand strength does not necessarily represent the market, it must exert force. In every major Olympic year, opportunities are well managed and brands can be improved. However, do not think that brand awareness can be reflected immediately from sales. This effect is gradually released.
"21st Century": After 4 years of rapid growth, what exactly do you need to make adjustments?
Ding Shizhong: Management. China's indigenous sporting goods brands, the past development model is basically "brand plus wholesale", that is, the first advertisement to the brand to make, and then sell the goods to wholesalers is over, to think about the future from "wholesale" to "retail", The entire supply chain process must be considered.
"21st Century": From wholesale to retail, where are the main points of change?
Ding Shizhong: If it is a "brand plus wholesale" model, brand owners may not consider the point of view of the store, only consider the needs of the wholesaler level, in the retail model, it is necessary to take into account the conditions of the store under the distributor The demand for stores is more important than wholesalers. In 2012, Anta will implement an IT integration project. It is expected that by the end of next year, IT systems will basically cover 70%-80% of stores.
Anta all took a single store order, the original order is the wholesaler and franchisee orders, now the country's 8000 stores, 40% of the stores are opened by their own dealers, about 60% are franchisees to open, to strengthen the franchisee shop terminal Management, like the dealers themselves, requires that each store must be ordered separately. At the same time, under the traditional ordering system, the proportion of replenishment is relatively small, and we are thinking about how to make the replenishment mechanism more flexible in the future. The pressure of the industry's inventory is so great. Relying on IT systems, Anta must increase the response speed of service dealers.
Business differentiation: “21st Centuryâ€: In the industry, some companies’ brand transformation has encountered setbacks. During the adjustment period, Anta will encounter similar risks.
Ding Shizhong: The brand ultimately needs to be put into operation. The essence of the operation of the brand is the ability to operate. For example, the same factory foundry Anta shoes, Anta gave them the same price, some shoes can earn 10%, and some can only Earn 3%, which is the difference in management capabilities, management, branding are all doing management.
The essential difference is not only the differentiation of the brand, but more importantly the difference in the operation. How to achieve business differentiation? This is a question of returning to business. For example, as early as five years ago, we worked with professional design agencies in the United States, Japan, and South Korea to provide design. The benefits of every ANTA advertising investment may be higher than others. China's manufacturing is still our strength, right? These are all differences. Our most obvious possibility is to use personal differentiation. 90% of the people cultivate themselves. There may be 90% of some companies who rely on external recruits and have lower labor costs than competitive brands.
"21st Century": In terms of products, does Anta do differentiation?
Ding Shizhong: Differentiation is gradually taking shape. First, brand building is differentiated. Second, the level of specialization of products is increasing. For consumer groups of non-professional sports, cooperation with fashion elements will increase.
"21st Century": The FILA acquisition in 2009 was a test of your multi-brand operation. How does it perform now?
Ding Shizhong: Actually, Anta Kids and Anta Life are two sub-brands, not exactly equivalent to Anta's main brand. Anta is a mass brand focused on professional sports. FILA should be a high-end brand, which is between life leisure and professional sports. Both should achieve differentiation in quality, target groups, and channel access.
I don’t want FILA to make 1000 stores at once. It’s also impossible to choose four cities in Beijing, Shanghai, Guangzhou and Chengdu. Now there are more than 200 stores, all of which are the best shopping malls and shopping centers in China. In Beijing's Shin Kong Place, domestic brands couldn't get in. But FILA still went in. They got their approval. Ping effect sells first, and the price is 30% more expensive than international sports brands. Why can we sell 30% more? The goods must be better.
"21st Century": Still looking for opportunities for multi-brand expansion?
Ding Shizhong: The acquisition of a brand does not mean that this opportunity exists. In the future, Anta is an integrated company that focuses on sports brand management and sports, leisure, fashion, and multi-brand operations.
"21st Century": To the present day, it is widely believed that you have a strong personal learning ability. Is this a talent or a habit that can be nurtured the day after tomorrow?
Ding Shizhong: When it comes to learning ability, first of all, it is the dedication to the cause and the love of the cause. Why did you study? Because your career is here, you must continue to learn and continue to charge. Where to charge? First of all, always pay more attention to the business you are engaged in and learn insights. For example, when we walk to the mall, we sometimes go to a brand that is not our industry, study other people's products, and provide insight into changes in consumer trends, like the clothes you wear. We will all look at the brand; secondly, to improve our learning ability, we must go with more masters. No matter the enterprise or the individual is the same, I would like to talk to the master. I like to keep in touch with the outstanding talents from all over the world, not only in the entrepreneurs or the industry but also in the artists. I also like to contact.
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