B U S I N E S S
12
Edited by
James E. Ellis,
Janet Paskin, and
David RocksBloomberg Businessweek October 14, 2019Beijing’sfight withtheNBAis makingheadlines.Butthe real
sports story in China is Anta’s bid to expand worldwidepairofshoes,”hesays.“Youhavetocommuni-
catetoconsumerswhatyourbrandspiritis,your
culture,yourvalues.”
Chinese corporate history has plenty of
examplesofconsumercompaniesthattried—and
failed—tousenationalisticsentimentandcelebrity
to unseatglobalcompetitors. Apparelmaker
LiNingCo.Ltd.paidtooutfittheChinesenational
gymnastics,diving,tabletennis,andarcheryteams
beforethe 2008 BeijingOlympics.Theon-airpre-
sentersfornationalsportsbroadcasterCCTV-5also
woreitsLi-Ningbrand.AndcompanyfounderLi
Ning,a gymnastwhobecamea mainlandsports
iconafterwinningsixmedalsatthe 1984 games,lit
thetorchduringtheopeningceremony.Thecom-
pany’ssharesquicklyjumpedmorethan3%.
Yet morethana decadelater, salesofthe
Li-Ningbrandandthesharepriceofitsparent
havecollapsed,draggeddownbyexecutiveturn-
overandtoo-rapidexpansion.Itsshareofthelocal
markethasstalledatabout6%,barelyholdingoff
insurgentSkechersUSAInc.
PascalMartin,a partnerinHongKongwith
OC&C StrategyConsultants,says Anta seems
betterpositionedtochallengetheWesternsport-
ingapparelgiantsbecauseit’sbuildinga familyof
brandswithreachfarbeyondChina.Hesaysthe
companyhasbeenbolsteredbyitsrecent$5.2bil-
lion acquisition of Finland’s Amer Sports Oyj, par-
ent of ski brands Armada, Atomic, and Salomon, as
well as high-end outdoor gear company Arc’teryx
and equipment company Wilson. “Anta is heading
towards the Winter Olympics in much better shape
than Li-Ning was in 2008,” Martin says. “With the
winter and outdoor sports brands, it’s very rele-
vant. Anta’s already in a better position to lever-
age the sponsorship.”
The Amer Sports deal and an earlier licensing
pact to sell sportswear and shoes from the Fila
brand, whose retro, thick-soled “dad sneakers”
are enjoying a global renaissance, are part of a
strategy to become what Zheng describes as “the
LVMH of the sports world.” (The French luxury
group owns scores of brands, ranging from LouisChinese President Xi Jinping is rarely seen wear-
ing clothes with visible logos. So when a state
television segment in 2017 showed him in the ski
townofZhangjiakou—avenueforthe 2022 Winter
Olympics—wearingthenationalteamparka,inves-
torswereriveted by the insignia on his chest: the
red logo of Anta Sports Products Ltd.
Wasit justa showofsupportforthegames?Ora
tacitendorsementofAnta,China’semergingchal-
lengertoNikeInc.andAdidasAG? Investors have
voted for the latter: Shares of the Fujian-based
apparel company rose 8% over the next two days.
Revenue is up 80% in the two and a half years since.
China is expected to surpass the U.S. this year
as the world’s biggest consumer market, but it’s
yettominta globalconsumermegabrandof
itsown.Westerncompaniesstilldominatethe
$43billion domestic sports apparel market, where
Nike’s share is almost 23% and Adidas holds 20%.
Anta is third, with 15%, and few consumers out-
side China have heard of it.
Anta President James Zheng says his company
won’t stay back in the pack much longer, predict-
ing it will be China’s dominant sportswear brand by
2025.Therestoftheworldwillgettoknowit,too,
hesays.Onereason:Twoyearsago,NBAstarKlay
Thompsonagreedtoa 10-year,$80million exten-
sion of his endorsement deal with the company.
Although Anta’s suspended wider negotiations with
the league, its relationship with Thompson hasn’t
beenaffectedbytheNBA’scurrentfracasinChina,
andtheKT5,thelatestversionofThompson’ssig-
naturesneakerforthebrand,getsa high-profile
American release this month.
Domestically, the company has ponied up to
sponsor the Chinese Olympic team and the Beijing
2022 games. Zheng declines to say how much the
sponsorship cost but calls it Anta’s most significant
investment ever. “The next two years will solidify
our ability to be No. 1 in China,” he says.
Revenue will rise at least 20% a year during this
“crucial period,” Zheng says. It will also test his
faith in the power of Western, aspirational mar-
keting. “It’s not just designing and making a niceCan the Nike of
China Go Global?