How Did Anta Manage to Become the Third Largest Sports Brand in the World?
According to a report published by Hurun (胡润研究院), Chinese sports apparel and equipment brand Anta ranks 46 in the list of TOP 500 private enterprises in China, and Anta is also the one and only sports brand that made the list.
It is fair to say that Anta has become a top runner in the Chinese sports industry.
The History of Anta
The brand was founded in 1991 in China’s Fujian Province. At that time, China was well-known for its low labor cost and many international brands had their products manufactured in China. Anta was one of these manufacturers.
After Anta had become one of the top sportswear manufacturers, its founder Ding Shizhong (丁世忠) decided that Anta needed to stop manufacturing products for other brands and started building Anta as a shoe brand.
In 2001, Anta began expanding beyond shoes to become a comprehensive sportswear and apparel brand. It opened its first offline store in Beijing in the same year. In 2007, Anta filed for an IPO in Hong Kong. By that time, it already had over 5,000 stores nationwide. By 2011, the number rose to nearly 8,000. Then in 2009, the brand acquired the Italian sports brand FILA.
In 2010, Anta started its ecommerce journey by working with Tmall, Jing Dong and VIPshop. Later, it became the business partner for NBA, which brought lots of attention for the brand domestically as many boys in China love watching NBA.
Reasons for its success:
1. Focus on sports products
Anta never stops acquiring brands. One thing in common among these brands is that, they are all sport brands. So when talking about Anta, consumers think of sports and when it comes to sports, Anta is on their lists. It maintains a unified brand image.
By solely focusing on sports, Anta is able to invest the majority of its budget in this field. It built a ANTA Sports Science Laboratory in 2005, which is the first sports laboratory in China.
2. Multi-brand strategy
FILA is just one of the many brands Anta has acquired. Anta has a large portfolio of brands that cover a wide range of consumer groups, from kids to adults, middle class to rich consumers, sportswear to fashion apparel, Anta’s sub-brands cover them all.
Other brands include Arc’teryx, Wilson, SUUNTO, MAVIC and Salomon.
3. Heavy presence both online and offline
By the end of 2018, Anta Sports had over 12k stores including 10k Anta stores. Those stores are changing to direct sales gradually, which will be convenient for Anta to monitor their performance, restock and reallocate products.
And as we mentioned before, in 2010, the brand started its ecommerce journey. It was expected that its online channels would contribute 20% for its annual revenue in 2020.
4. Value product development
Anta spent 5.5% of its budget on new product development in 2018 and has R&D centers in Los Angeles, Tokyo, Seoul, Milan, Mainland China and Hong Kong, attracting nearly 200 experts from 20 countries. So far, Anta has applied for over 1,200 innovation patents.
5. Celebrity marketing
Compared with other sports brands, celebrities that Anta works with are mostly professional athletes including areas such as tennis, ping pong and it signed contracts with NBA basketball players as well such as Kevin Garnett and Luis Scola.
6. Sponsor significant sports events
In 2000, Anta sponsored the Sydney Olympic Games and entered the international market. In 2004, the brand spent 60M RMB to work with CBA (China Basketball Association) for three years. Prior to that, the CBA had only been sponsored by international brands. Anta is also a strategic partner of the Chinese Olympic Committee and it will be a sponsor for the Winter Olympic Games in Beijing in 2022.
According to the company’s financial report for the first half of 2020, its annual gross margin reached 57% and 2020 has been the third year to witness its growth, while for the other three major Chinese sports brands: Li Ning, 361 and XTEP (特步), it is predicted that their annual gross margin will fall in 2020.
Potential Issues
Behind the success, there are a few potential issues for Anta. First, Anta has spent too much time and budget on expanding its brands. The acquisition and management would be a problem for Anta.
Second, Anta doesn’t have its own factories. Its products are produced by outsiders. Without fixed assets such as factories and equipment, financing institutions may hesitate when it comes to equity trading. Another problem related to the fact that Anta doesn’t have its own factories is that Anta has less control on manufacturing, which may lead to quality and supply chain issues.
Third, although Anta’s portfolio is diversified, one of its largest businesses is still the Anta brand, yet Anta hasn’t always been known for producing high quality goods and still has work to do when it comes to boosting its brand image, especially among millennials and middle aged consumers.
For example, Hank Zhang, one of our content creators here at China Marketing Insights, has a poor impression of Anta left over from his childhood. In the early 2000s Zhang was on the Beijing high school basketball team which was sponsored by Anta. He recalls Anta’s shoes were far lesser quality than his Nikes and not breathable at all. Often when he finished a game, his shoes would be a pool of sweat.
While Anta may have come a long way since then, early consumers of the brand such as Zhang will take some convincing.
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