MADE FOR SUCCESS

The Chinese delegation was clad in Anta, an official partner of the 2022 Games. The Japanese team wore Descente, a Japanese brand acquired by Anta. Peak, another Chinese brand, supplied several teams such as New Zealand, Belgium and Iceland. 　

The same day, Chinese athletic brands saw their values climb on the Hong Kong Stock Exchange. Li-Ning rose 7.63 percent, Anta climbed 6.35 percent and Xtep jumped 4.02 percent. After the opening ceremony, sales of Anta down jackets on e-commerce site JD.com increased 203 percent between 8pm of February 4 and 11am of February 5, data from the site shows. 　

The same trend occurred during the Tokyo Olympics in July and August 2021. Two days before the Games, turnover of domestic sportswear brands on JD.com in creased 500% on the previous year's turnover of the same day. 　

China’s sports industry expanded rapidly in recent years, with market size climbing from 1.7 trillion yuan (US$267b) to 2.95 trillion yuan (US$464b) between 2015 and 2019. The overall sports industry is expected to reach 5 trillion yuan (US$786.5b) by 2025, according to the National Fitness Plan (2021-2025) issued by China’s State Council in 2021. 　

By competing and partnering with international brands, China’s sportswear brands have grown to be a major force not only in the domestic market but also the global arena. 

The Tianjin-based brand was once a status symbol. According to its website, in the mid-1980s an item of Meihua clothing cost the average Chinese worker one-month’s salary. However, that changed as international sportswear brands such as Nike swarmed in, sponsoring athletes and national teams to get a foothold in the growing market. 　

International brands also brought business opportunities and needed technologies to the nascent Chinese sportswear industry. Nike set up its first office in Beijing and built factories in the town of Chendai, a part of Jinjiang City, Southeast China’s Fujian Province. Later, Nike and Adidas moved their factories about 100 kilometers away to Putian, another city in Fujian. These factories eventually fostered a skilled workforce, making it the center for Chinese sportswear manufacturing, with over 3,000 small-scale shoe factories. High quality and low priced, Jinjiang-produced sneakers were popular among young Chinese. 　

Gradually Chinese makers began to realize the importance of brand building and the domestic market. While on a trip to Beijing in the late 1980s, Ding Shizhong, founder of Anta Sports, found that international brand shoe prices were double those of domestic brands of similar quality. He decided to start his own brand. With his father and brother, Ding started Anta in 1991. During the Asian Financial Crisis in 1997, Chendai, which relied on foreign trade, was hit hard. In 1998, the Jinjiang city government encouraged enterprises to build brand awareness. Two years earlier, China was among the top gold-medal winners at the Olympic Games in Atlanta, which further promoted its sports industry. 　

In 1989, Jianlibao, a sports drink company based in Guangdong Province, invested in sportswear brand Li-Ning, founded and named after the Chinese superstar gymnast who won six golds at the 1984 Los Angeles Games. One year later, Li Ning would leave Jianlibao and take his eponymous sportswear company to Beijing. 　

Peak, a brand established in 1989 in Quanzhou, Fujian, was among the first Chinese sportswear makers to invest in production lines similar to those used by Nike. For a time, Peak shoes were sought after by young basketball players in Quanzhou. 　

Xtep, which started as Sanxing in 1987, re-branded in 2001. Other brands such as 361˚ followed in 2003. 　

By the end of 1998, Anta had nearly 2,000 outlets nationwide. Despite the Asian Financial Crisis, it saw an increase of 4 million yuan (US$629,000) in revenue due to steady domestic sales. 　

Olympic champions soon joined the game. In 2000, Anta endorsed Kong Linghui, a gold medalist in table tennis at the Sydney Olympic Games that year, who appeared in a commercial on State-run China Central Television (CCTV). The same year, Anta’s sales surpassed 300 million yuan (US$47m). Wang Qi, former general manager of China Sports Advertisement Company, the first of its kind in China, recalled that CCTV Sports was running over 50 athletic shoe commercials a year at the time. 

International brands like Nike and Adidas got the jump by targeting China’s middle and high-end consumers. By 2003, Nike had broken Li-Ning’s nine-year streak to lead the domestic market. Although Li-Ning went public in Hong Kong in 2004 to become the first Chinese sports company listed overseas, Adidas outpaced Li-Ning as the second-largest brand in China. In 2005, even though LiNing’s revenue grew by 30 percent, it was still running a distant third with other Chinese brands even further behind. 　

Li-Ning took lessons from its rivals’ playbooks. It produced fashion sportswear and raised prices, giving up the low-end market it once occupied. But despite these efforts, LiNing still failed to attract younger consumers – Nike was firmly rooted as a status symbol in China. 　

Anta chose another tack – targeting the low-end market Li-Ning gave up. Its products were priced around 20-30 percent lower than similar products from Li-Ning. In 2007, Anta got listed in Hong Kong. 　

When Beijing hosted the 2008 Summer Games, it sparked a nationwide sports craze, and brands rushed to expand production lines. But the investment boom created excess supply, which led to an inventory crisis around 2012 that lasted four years. Many brands suffered huge losses. Li-Ning closed over 1,800 outlets, while Anta shut 600. Other brands like Deerway, which at one time enlisted pop megastar Jay Chou as a brand ambassador, disappeared altogether. 　

“All the major brands were busy trying to get rid of stock, offering low prices and big discounts... But it didn’t work. Discounts only made things worse,” Li Ling, Anta’s vice president, told NewsChina. 

Between 2014 and 2018, sporting goods manufacturing value added climbed steadily year-on-year from 254.7 billion yuan (US$40b) to 339.9 billion yuan (US$53b). As the industry grew, so did the competition as more international and local brands joined the fray. 　

Ding Shizhong believed that Anta’s only chance to overtake Nike was to stop imitating its strategies and find a different business model. It adopted a multi-brand strategy and invested heavily in R&D. Chinese shorttrack speed skater Wu Dajing won his first Olympic gold medal at the Pyeongchang 2018 Winter Games wearing an Anta suit. It was the first of its kind to be developed by a Chinese company, which claimed it could reduce air drag by 10 percent. Previously, China’s national team relied on imported speed skating suits. 　

In 2009, Anta purchased Fila’s operating rights for the Chinese mainland, Hong Kong and Macao from Chinese footwear producerretailer Belle International for HK$650 million (US$83.3m) – two-thirds of Anta’s net profits for 2008. After the acquisition, Anta focused Fila on fashion sportswear, targeting middle-income consumers between 25 and 35 years old. 　

Armed with experience operating an international brand, Anta then acquired Sprandi, a UK-based sportswear brand, Descente from Japan and Kolon Sport from South Korea. In 2019, together with other investment institutions, it acquired Finnish brand Amer Sports for 4.6 billion euros (US$5.2b), the biggest cross-border purchase in the industry. Thirteen brands under Anta, such as outdoor sports equipment brand Salomon and outdoor apparel brand Arc’teryx, rank among the top in their respective niches. 　

China’s ice and snow industry reached around 423.5 billion yuan (US$66.9b) in 2019, according to a report on China’s ice and snow economy released by the State Council in 2020. Driven by the 2022 Winter Olympics and other incentives, experts forecast the industry’s scale to surpass 800 billion yuan (US$126.3b) over the next five years. 　

In the first half of 2021, Anta surpassed Adidas in China with a revenue of 22.8 billion yuan (US$3.6b). By mid-2021, Anta was valued at a record high of HK$512.8 billion (US$65.7b) to become the secondlargest sports brand globally behind Nike. 　

In 2016, one year after seeing gains for the first time since 2011, Li-Ning purchased operating rights for US dancewear brand Danskin in the Chinese mainland and Macao regions for 100 million yuan (US$15.7m). 　

China’s legacy sports brands also got a second wind. After suspending production for 11 years, Meihua reemerged in 2015. In 2016, Feiyue, a 1950s brand from Shanghai that for decades produced the low-tech trainers that generations of grade school students wore for gym class, also gained traction. In 2016, Feiyue collaborated with brands like Pepsi-Cola, Marvel Comics and ZTE, a telecom manufacturer, to reach younger consumers. Fueled by nostalgia, Warrior, a Converse-like brand popular in the 1970s and 80s, has found a cult following. 　

New brands are also gaining speed. In 2019, niche brand Particle Fever from Shanghai became the sponsor of China’s national canoeing, kayak, rowing and dragon boat teams. The brand rose to fame overnight when the Chinese women’s rowing team won gold in the quadruple sculls at the Tokyo 20202 Games which took place in 2021. 　

Zhao Xianglin, vice president of sporting goods manufacturer Double Fish, said a global presence gives international brands a competitive edge in China. Brands like Nike sponsor the world’s most influential athletes, which attracts Chinese consumers. “If they [domestic brands] want to beat out international brands in the local market, they need to increase their share of the global market,” Zhao said. 　

Leading Chinese brands have global ambitions. In 2018, Anta launched its globalization strategy. Its acquisition of foreign brands like Amer Sports, which already have solid customer bases overseas, are expected to provide big boosts. After eight years of suspended efforts to expand overseas, Li-Ning opened its first official store on AliExpress, Alibaba’s cross-border e-commerce platform, in 2016. Other domestic brands including Xtep, Peak and Erke are making plays for global markets. 　

Besides acquiring foreign brands, Chinese makers are combining Chinese and international styles. In February 2018, Li-Ning became the first Chinese sports brand represented at New York Fashion Week, garnering attention for its “China chic” designs. The same year, Li-Ning surpassed 10 billion yuan (US$1.6b) in revenue for the first time. At the end of 2020, Peak shoes co-branded with Le Louvre, while Anta shoes by American footwear designer Salehe Bembury hit the market. 　

A new race is on between Chinese and international sportswear brands, and neither are showing any signs of letting up.