Just doing it — full steam ahead with M&A deals
Sports apparel major Anta expands confidently, taking on the likes of Nike
Private companies are becoming more active in overseas mergers and acquisitions, and China should finalize relatedlawsandregulationsto support such corporate activity, according to Ding Shizhong, chairman and CEO of Anta Sports Products Ltd, China’s largest athletics apparel company.
Ding made that plea during the annual meeting of the National People’s Congress, China’s legislature, in Beijing.
Overseas M&A activity plays an important role in the company’s global plan, he said. “Anta wants to be a world-class company, so going global is an importantstrategyforus.We’ll continue looking for M&A opportunities and find more opportunities to go global.” Established in 1991 in Jinjiang, Fujian province, Anta has been focused on the domestic market for a long time. But since 2015, Ding decided to reposition Anta and look overseas.
The aim was to develop Anta from a single-brand company into a multi-brand company, to meet with the diverse demands of Chinese and overseas markets, and to compete with the most famous global brands on the world stage.
Anta’s total revenue reached 13.35 billion yuan ($1.93 billion) in 2016, up 20 percent year-on-year. The net profit was about 2.39 billion yuan, up almost 17 percent.
Ding said the most difficult aspect of globalization is to increase brand awareness among overseas consumers.
For the past few years, the company has been looking for brand that could complement its own brand Anta, which targetsthem ass consumer market.
This February, Anta announced that its subsidiary Anko will form a joint venture with Kolon Sport, an outdoor brands from South Korea. Before that, it acquired the nearly century-old Italian premium sportswear brand Fila in 2009, to expand in the highend market.
And in 2016, it formed a joint venture with Japanese brand Descente Ltd.
“Many overseas brands have a long history and have developed complete categories. But China lags in the winter sports industry, especially in equipment making, which is dominated by Western brands,” he said, adding that the acquired brands are expected to contribute more than 30 percent to Anta’s total sales by 2020.
To increase its brand awareness, Anta and the National Basketball Association of the United States reached a multiyear partnership in 2014, through which Anta has launched a complete line of Anta and NBA co-branded league- and team-identified footwear and accessories.
The company also invited a group of NBA stars to endorse its own brand Anta. And it also provided uniforms and equipment to Chinese national teams for the 2016 Rio Olympics.
Zhu Zhenxin, a researcher with Minsheng Securities in Beijing, said that at present, the gap between the Chinese and overseas athletics apparel brands in the low-end and middle-end products is very small. But for the sports industry that underlines high technology, it is right for local brands to expand more into the high-end market.
Ding said Anta is now busily making global plans. It has established research centers in the United States, eastern Europe and the Middle East. It also sells through distributors on a larger scale.
“In the past, I could never imagine that China’s sneakers could be priced $120 for each pair in the US and sell well, just like Nike does,” he said. “But now, we’ve more confidence and are more prepared to embrace the global market.”