Chinese sportswear brands quickly close on Nike and Adidas

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(Nikkei Asia) – A 20-year-old Chinese student at the University of Toronto in Canada recently bought a shirt from Chinese brand Li Ning online and sent it to her father as a birthday present. The brand looked fresh and was popular on social media, she said, adding that she liked the “China” logo written in Chinese on the shirt.

The sportswear market in China has long been dominated by American and European brands such as Nike and Adidas, but in recent years Chinese consumers – especially young people – have shown increasing interest in Chinese brands, led by Li Ning.

The sportswear brand was founded in 1990 by Li Ning, a retired Chinese gymnast and gold medalist at the 1984 Summer Olympics in Los Angles. He is popularly known in China as the “Prince of Gymnastics”.

In addition to sportswear, Li Ning Co., where Li is co-general manager, manages equipment for a variety of sports, including basketball and badminton, and has a history of over 30 years as a strong brand for professional sports.

Despite this, the company faced intense competition from its competitors and fell into the red in the early 2010s.

A turning point came in 2018 when the company first participated in New York Fashion Week. In addition to displaying sportswear with its main logo, it made a big impression with a new logo in red and white with the words “China Li Ning” written in Chinese.

By expanding its line of sportswear to include trendy streetwear, Li Ning has since become a popular brand among young people.

Anta is another Chinese sportswear brand that is rapidly gaining popularity. Anta Sports Products, which manages the brand, is a sports equipment company founded in 1991. Taking advantage of the popularity of sporting events including the 2008 Summer Olympics in Beijing, the company has maintained steady growth.

Anta Sports, as an Olympic sponsor, drew attention to its sportswear with designs on the theme of the Chinese national flag. The company supplied uniforms to athletes representing China at the Tokyo Olympics and Paralympics this summer. It sells sportswear in its retail stores with designs based on the similar Olympic logo worn by Chinese Olympic athletes. With preparations underway for the 2022 Beijing Winter Olympics, Ding Shizhong, CEO of Anta Sports, said products with Chinese national flag-themed designs would have new growth opportunities.

Li Ning and Anta Sports both show strong profits. In the first six months of 2021, Li Ning recorded company-wide sales of 10.1 billion yuan ($ 1.57 billion), up 60% year-on-year previous, while Anta Sports also recorded a 60% sales increase to 10.5 billion yuan.

Behind the high incomes of the two brands lies the support of people of “Generation Z” – or those born after the mid-1990s who are now in their late teens and early twenties. Chinese consumers, especially those of this generation, are leading the “Guochao” or “national trend” of upgrading national brands. Li Ning and Anta are at the forefront of the trend.

The Li Ning brand “represents the Chinese culture and elements and strengthens the empathy of Chinese consumers towards their country,” said Qian Wei, co-CEO of the company.

In the Chinese sportswear market, except footwear, Anta and Li Ning held the third and fifth largest shares of 11.9% and 8.2%, respectively, in 2020, quickly approaching 19, 5% from Adidas and 12.8% from Nike, according to British research firm Euromonitor. International.

International political developments also favorably affect Li Ning and Anta. In the spring of 2021, Nike, Adidas and other major Western clothing brands, including Sweden’s Hennes & Mauritz, better known as H&M, were boycotted in China for ceasing to sell. ‘use cotton produced in the Xinjiang Uyghur Autonomous Region due to the alleged violation of human rights there. The boycott led to increased demand for Chinese brands.

Foreign brands’ “irrational” decision to stop using Xinjiang cotton has ignited the patriotism of Chinese consumers and greatly increased e-commerce enthusiasm around the Li Ning and Anta brands, according to Chinese brokerage firm Soochow Securities .

Although growing in popularity in China, both brands still lag behind their Western peers around the world. Anta Sports acquired the Chinese operations of Italian-born sportswear brand Fila in 2009 and promoted Japanese sports brand Descente in China. The company’s aggressive merger and acquisition strategy also included the 2019 buyout of Amer Sports, a large Finnish sporting goods company, for 750 billion yen ($ 6.58 billion).

Nevertheless, the Anta brand is not very recognizable outside of China. Li Ning remains dependent on the domestic market for most of its sales.

Analysts point out that Li Ning and Anta Sports still need to improve the quality of their products. Tokyo Olympics women’s badminton gold medalist Chen Yufei suffered a cut to her toe caused by a thread-like object inside a cracked shoe made by Li Ning during a match at the China National Games in September. The injury sparked protests against Li Ning, who is reportedly spending less on research and development than global brands.

Li from Li Ning is sticking to his goal of gaining recognition for the Chinese brand around the world. Ding of Anta Sports has also expressed its intention to accelerate the globalization of its operations, including the Anta brand.

The presence of powerful Western brands, like Nike and Adidas, remains formidable even in the Chinese market, and the gap between them and Chinese brands is widening in the rest of the world.

Li Ning and Anta Sports need to provide stable quality products and build trusting relationships with consumers if they are to make their brands acceptable worldwide. At a time when information, including criticism of copiers or faulty products, can spread instantly through social media, the raw power of Chinese brands is being tested.

This story was first published in Nikkei Asia.

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