Cotton! cotton!
In the past two days, the anger about cotton has spread across the country.
Under the wave of condemnation and boycott of several international brands by netizens, more than 40 domestic spokespersons have terminated their contracts with companies in BCI (Swiss Better Cotton Development Association). This wave of contract terminations continues, with many artists including Li Yifeng, Zhu Zhengting, and Xiaogui Wang Linkai announcing this morning that they will terminate all cooperation with the BOSS Hugo Boss brand.
It is worth noting that dozens of domestic clothing brands including Anta Sports, Xtep International, and Li Ning have all spoken out in support of Xinjiang cotton. Judging from the comments, netizens also have great expectations for domestic brands.
iiMedia Consulting CEO Zhang Yi said, “In the past two years, domestic brands have grown strongly, while foreign brands have gradually declined, whether in offline physical stores or online. This is very obvious even in e-commerce. In fact, in the global market, we will also see that Chinese brands have gradually changed from pure OEMs to competing for the mid-to-high-end market with their own brands. This momentum has been particularly rapid in the past three or two years.”
Domestic brands support Xinjiang cotton
Zhang Yi told a reporter from the Daily Economic News (WeChat account: nbdnews): “Recently we have noticed a very obvious change in the clothing brand. In recent years, with the The post-95s generation and even the post-00s generation have gradually gained spending power. This group has an obvious characteristic. They have very strong confidence in national brands. They particularly favor domestic products, national brands, and national trends. It is precisely in this general situation and In the general environment, domestic brands have gradually moved to the center of the stage.”
In fact, the rise of national enterprises in recent years has gradually dominated China’s brand apparel market. According to the Chinese men’s clothing market report released by Euromonitor International, Heilan House ranked first in the men’s clothing industry for seven consecutive years with a market share of 4.7% in 2019.
Picture source: screenshot of Hailan House official Weibo
A member of Hailan House When people familiar with the matter analyzed it to the reporter of “Daily Economic News”, they first mentioned its positioning of “mass cost-effective men’s clothing”. Coupled with the “platform + brand” chain operation model, it achieved the improvement of brand awareness and the expansion of sales channels.
When it comes to Xinjiang cotton, the above-mentioned Heilan House person said: “The shirts, T-shirts, sweatshirts, thermal underwear and other products sold by Heilan House and its sub-brands are all Xinjiang cotton is used. Heilan House’s maternal and infant brand Yingshi has a Xinjiang cotton planting base. Xinjiang cotton is white in color, has good elasticity, and the cotton fineness is far superior to ordinary cotton. Heilan House extensively uses Xinjiang long-staple cotton to support the cotton of the motherland. The industry is booming. We have not joined the BCI organization, and our suppliers and stores are basically domestic. In this era of diversification and personalization, we want to express a lifestyle so that every consumer can find something that suits them. Choice.”
In addition to Heilan House, dozens of clothing brands including Anta Sports, Xtep International, Li Ning and others have spoken out to support Xinjiang cotton.
Image source: Xtep Sports official Weibo screenshot
Xtep International also sold 4,000 Xinjiang pieces Cotton Tee, all proceeds from the sale are donated to the China Next Generation Education Foundation Aiqihang Charity Project.
Anta’s net profit exceeds that of Adidas
In fact, in recent years, domestic brand clothing has gradually begun to seize the high-end market that originally belonged to foreign brands. The most typical example is ANTA Sports’ FILA.
Anta Sports acquired FILA in 2009. In 2020, even affected by the epidemic, the FILA brand still achieved revenue of 17.45 billion yuan, a year-on-year increase of 18.1%. After ten years of development, FILA’s revenue has exceeded that of the Anta brand.
Picture source: Screenshot of ANTA Sports announcement
In 2019, Anta Sports formed an investor consortium with other investors to exceed The consideration of 37 billion yuan completed the largest overseas acquisition in the history of China’s apparel industry and China’s sporting goods industry – the acquisition of Amer Sports.
On March 24, the financial report released by Anta Sports showed that the company achieved a net profit of 5.162 billion yuan in 2020. The 2020 financial report released by Adidas on March 10 showed that the company’s vitality in 2020 was severely damaged due to the epidemic, with a net profit of 429 million euros (equivalent to RMB 3.314 billion), a year-on-year decrease of 77.6% from the previous year’s 1.918 billion euros. Anta’s net profit has Beyond Adidas.
Image source: Photo by Daily reporter Liu Ling
In terms of market share, the gap between Anta Sports, Nike and Adidas is also narrowing. In the domestic sportswear market, Anta Sports’ market share increased to 15.4% in 2020, second only to Nike and Adidas’ 25.6% and 17.4%. Since 2017, the market share gap between Anta Sports and Adidas has been continuously narrowing, and there is great potential to catch up.
“In the domestic market, We are currently in the first camp with Nike and Adidas, and have made great progress in 2020. This is due to our efforts in three aspects: First, we adhere to the multi-brand development strategy, and second, we have strong multi-brand management capabilities , and thirdly, our business model can well match market demand.” Zheng Jie, executive director and president of Anta Group, said in an exclusive interview with a reporter from China Securities Journal.
Anta’s performance has also been well reflected in the secondary market. Since the company landed on the Hong Kong Stock Exchange in 2007, it has been on a bullish trend and has accelerated its upward trend since 2016.
Nike and Adidas have strong growth in China
The number of H&M stores in China has declined for three consecutive years
Looking back at Adidas, not only did its profits drop sharply in 2020, Credit Suisse issued a report for investors. Analysts warned that in addition to the sales losses caused by closing stores, Adidas It is also facing a more serious inventory crisis. As of December 31, 2020, its inventory reached 4.397 billion euros, a year-on-year increase of 7.6%. In order to reduce inventory pressure, Adidas will continue to increase promotional activities in 2020 and sell products at low prices and discounts.
Adidas’ revenue growth has slowed down significantly since 2018. From 2015 to 2017, Adidas’ annual revenue growth was 16.31%, 14.05%, and 14.80% respectively. In 2018 and 2019, the growth rate dropped to 3.28% and 7.87%. In 2020, there was a negative growth of 16.1%.
China is currently Adidas’ third largest market. According to Adidas’ 2020 annual report, the markets ahead of China are the EMEA region (European Union, Middle East, Africa) and North America. It is worth noting that for Adidas, the Chinese market is almost as important as the North American market. In fiscal year 2020, the Adidas Group’s sales revenue in North America was 4.916 billion euros, and its sales in China were 4.428 billion euros.
For Nike, Greater China is its third largest market. In fiscal year 2020, Greater China contributed approximately 19% of Nike’s sales revenue. At the same time, this is also the only market where Nike achieved positive growth in fiscal year 2020, with sales increasing by 8% year-on-year.
In contrast, H&M is slightly “embarrassing”, and its operating performance in the Chinese market has been dismal in recent years. In the fourth quarter of 2020, H&M’s sales in China recorded a year-on-year negative growth of 7%. At the same time, from 2018 to 2020, the number of H&M stores in China has also been declining. As of November 30, 2020, H&M had a total of 505 stores in China, a net decrease of 25 compared to the end of 2018.
The reporter noticed that another situation that cannot be ignored is that some companies, represented by Adidas, are gradually transferring their production methods from China to other Asian countries.
According to Adidas’ 2020 annual report, Adidas’ footwear production locations in 2020 are ranked by country. The first place is Vietnam, accounting for 42%; followed by Indonesia and China, accounting for 29% respectively. % and 15%. The top apparel production place by country is Cambodia, followed by Vietnam and China, accounting for 22%, 21% and 20% respectively.
According to Adidas’ 2010 annual report, Adidas’ footwear production base is ranked first by country, with China ranking first, accounting for about 39%; in terms of apparel, China also ranks first, accounting for about 36%. %. </p
