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TIFFANY AP

Anta, the largest Chinese sportswear firm, was the first to pull out of a multi-year slump that beset the domestic industry.
Now, barely skipping a beat, it’s intent on nipping at the heels of sportswear titans Nike and Adidas.
Speaking to the  South China Morning Post after it posted full-year profit growth of nearly 30 per cent, Anta executive director James Zheng said its goal was to shake up foreign brands’ dominance of the China market.
“Our vision is very clear,” he said. “We are already the No1 domestic brand in terms of market share and brand equity. If you put all the sports brands together — domestic and international — we have a goal to become the No2 sports brand in China by 2020. Basically we either surpass Nike or Adidas — one of them — to become No2.”
Anta has consistently captured the No1 ranking among Chinese sportswear makers in a national survey by BrandZ and appears in the top 100 ranking of most valuable Chinese brands.
“Based on our understanding, right now Nike is more or less 18 per cent, Adidas 15 to 16 per cent,” Zheng said. “We are about 13 per cent. The closest Chinese firm would be Li Ning with about 8 per cent. That’s a rough estimation.”
Despite posting strong double-digit growth in turnover, Anta has still not quite finished an overhaul of its store network, focused on larger stores that can do justice to the products and in-store experience.
“Three or four years ago, the market had a lot of room to fill in, so your key business driver was to open shops,” Zheng said. “Obviously by 2011 and 2012, the market had been really saturated. We estimated there were more than 70,000 doors at that time for sportswear. The business model also needed to be adjusted from an expansion model to a retail model.
“In the past our shops were relatively small, like below 80 square metres, so it was difficult to show off your brands, to give the whole picture to consumers. We have pushed our retailers to open big shops of more than 150 square metres which enable us to really display the collections. This kind of conversion has worked really well.”
Zheng said Anta might follow up by creating devoted category shops, such as a women’s shop or skateboarding- or basketball-only stores.
If you put all the sports brands together — domestic and international — we have a goal to become the No2 sports brand in China by 2020. Basically we either surpass Nike or Adidas — one of them — to become No2
James Zheng, Anta  executive director
“Each shop looks more or less similar. If you come out with category shops, it will differentiate it further,” he said. “We want to try. We don’t know how it works so far. Nike has already tried but they also only have a very limited range.”
And while last year was a heady one for sports, with the soccer World Cup and the Winter Olympics captivating sports fans, Zheng said Anta was not concerned about a little less fanfare this year.
“Compared to 2014, 2015 is going to be a little bit quiet but we still have a lot of events that will come out,” he said.
Among these, Anta is promoting boxer Zou Shiming as a Chinese sports idol as he enters the ring in Macau next month. Zheng also cites Beijing and Zhangjiakou’s double-city bid to host the 2022 Winter Olympics as a major initiative for the company. In April, its new collection of hi-tech performance running shoes will debut and it’s rounding out the year with an NBA-cobranded basketball campaign in September.
“This year we think we will see double-digit growth,” Zheng says. Growth is expected to come from the distribution of Fila, the premium Italian sports fashion brand, and children’s wear, a bright spot that many sportswear makers have woken up to, although Anta was the first to leap into it.
“The kids segment is still very fragmented,” Zheng said. “There are more than a thousand kids brands in China but so far there is no leading brand at this stage. Obviously the demand is there, especially under the State Council’s new recommendations to put football and basketball in the kids’ physical education … we look at this as a huge opportunity for us.”
With more than 1,200 children’s wear shops already and plans to add 400 this year, Zheng insists the plan is not too excessive and Anta does not risk falling back into the troubles of yesteryear.
“For our kids business, it’s not too many shops,” he said. “We have over 7,000 stores in total. We think this business still has a lot of room.”
Although 361 Degrees beat Anta to the punch with its announcement of “smart” children’s shoes fitted with GPS trackers, Zheng said implementing technology was also high on Anta’s to-do list and it expects to release wearables and other innovations later this year.
“Wearables, a tracking system to hook up your shoes and to help you really understand what’s going on when you’re doing exercise — this is definitely an area we want to explore,” he said. “We will not produce equipment by ourselves. We will cooperate with some equipment suppliers. Nike originally did their equipment by themselves but right now they said ‘okay we are not experts on that side’, they work with suppliers.”
If there’s one thing that could throw such lofty ambitions into doubt, it’s the question of product design. Anta’s A-web sneakers, which have been a great success for the company, also bear a strong similarity to Nike’s Flyknit series.
“That’s a good question,” Zheng said when asked about the resemblance. “Actually we use different materials and technology and suppliers. It looks similar but there are different functions. The most important thing is the selling price is 499 yuan (HK$618), almost half the price of the Nike shoes.”
With Anta’s products averaging 300 to 600 yuan, and international brand shoes usually fetching 800 to more than 1,000 yuan, it begs the question whether Anta and other Chinese brands will always remain second-best or a way for consumers to get the “look for less”.
“There is still a long way to go,” Zheng said. “Chinese sports brands are still very young.
“We are all in the learning stage. There’s a lot of product innovation [to be done], even though we already put more than 7 per cent of our sales into product development. Every year we invest significantly but the base is comparatively small compared to these international brands so we’re facing tremendous problems.”
Although the company has plans to go global, the Anta brand itself will not be moving product off shelves in the Americas, Europe or other parts of Asia in a major way. The firm would rather acquire brands or work out licensee agreements as it did with Fila.
“We will follow through with an acquisition plan rather than say expand China to the US,” Zheng said. “We can sell some product in the US but Anta won’t necessarily become a dominant brand in the US. Fila is one type of acquisition but still focusing on China and Hong Kong. Maybe in the future we’d look for a brand that’s truly global and through that we can become an international company. We’ve been actively looking for opportunities.”


China’s Anta sets sights on closing gap with global sports brand leaders

Anta executive director James Zheng says the company is in the midst of an overhaul of its store network. "This year we think we will see double-digit growth," he says. Photo: Jonathan Wong

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Protesters clash with mainlanders during a rally against parallel trading at New Town Plaza in Shatin on February 15, 2015. Photo: Felix Wong

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