Bloomberg Businessweek - USA (2019-10-14)

◼ BUSINESS Bloomberg Businessweek October 14, 2019

14

Vuitton bags to Rihanna’s Fenty clothing line.)

The strategy runs counter to those of Nike and

Adidas, which have been selling off sub-brands.

Anta also has been bolstering its balance sheet and

building its in-house marketing expertise.

For Zheng, who ran Reebok’s China operations

before taking the reins at Anta in 2008, the estab-

lished brands give the company time to build the

kindofemotionalconnectiontoconsumersthat

Chinesebrandshavetraditionallyoverlooked.

WhenAntapickedupFilipinoboxer-politician

Manny Pacquiao in 2016 after Nike cut him loose,

Zheng praised his strong will and self-discipline as

an embodiment of the company’s “Fight On” and

“Keep Working” slogans.

Anta also sponsors Chen Penbin, who, after

becoming the first Chinese athlete to complete an

ultramarathon on all seven continents, is training

with the nation’s cross-country ski team before the

2022 Olympics. And Thompson, who makes regular

trips to China, has built a large mainland following.

In 2017 a clip of him losing an arm wrestling match

to a slight female fan went viral.

In addition to the coming Olympic cycle, the

three-year-running U.S.-China trade war has made

many mainland consumers eager to support local

brands of all kinds; the furor over the NBA's Hong

Kong tweet saga could fuel that trend. Smartphone

maker Huawei Technologies Co. shot up the ranks of

brandsmostlovedbyChineseconsumersafterthe

U.S.governmentprecipitatedthearrestofHuawei’s

chieffinancialofficerinCanada.

Nike and Adidas won’t cede China easily. “Nike is

Crown Prince Mohammed bin Salman had only just

started his rise to global notoriety when he stunned

the global business community in early 2016 by

promising to sell shares in the Saudi Arabian Oil

Co., the state oil producer. Now, after several false

starts, the initial public offering of Saudi Arabia’s

crown jewel—Aramco, which pumps 10% of the

global crude oil supply from abundant fields under

the kingdom’s desert—is finally going ahead.

The government is set to make a formal

announcement in late October. While details of the

● TheSaudisarepromisinghigherdividend

paymentstolureinvestors

Aramco’s Giant

IPO Is Finally Set

a brand of China, for China, and the results continue

to prove it,” Chief Executive Officer Mark Parker said

on the company’s most recent quarterly earnings

call, pointing to “double-digit growth in Greater

China every quarter for more than five years.”

TheforeignrootsofWesternbrandsremaina

hugeadvantage.“Fora bigswathoftheChinese

middleclass,thereis a cachetassociatedwithNike

andAdidasthatgivethemanedge,”saysChanWai-

Chan,a retailpartneratconsultingfirmOliver

Wyman.“Thereis anemotionalconnectionandhis-

torythatthosebrandsrelyon—forexample,inre-

releasingoldsneakermodelsfromtheirarchives.”

Chinesecompanieshaveverylittlehistory

tosell.Antawasfoundedin1991,thesameyear

NikereleaseditssixtheditionofAirJordans,and

Adidaswasalreadyintoa full-onrebootofitsven-

erableEQTshoeline.YetOC&C’sMartinargues

thatoperationally,that’snotallbad:“Nikeand

AdidascameearlytoChina,butthatlegacyis dif-

ficulttochangeandevolve,”hesays.“Antaunder-

standstheChineseconsumer,theyunderstandthe

onlineecosystemreallywell,theyhavetheshort-

estsupplychain.”

Evenso,Zhengsaysit won’tbeeasy.“Tohave

a productstorybecomea brandstoryandhave

thatbrandstorybecharismaticandresonate

withWesterners,that’sstillchallenging,”hesays.

“We’regoingtoneedtime,andluck.”�Rachel

ChangandHazeFan

offer haven’t been made public, people involved in

thetransactionsayabout2%ofAramcomaybesold

ata pricethatwouldvaluetheentirecompanyat

$2trillion,raising$40billionandoutstrippingthe

$25billioncollectedin 2014 byChinesee-commerce

giant Alibaba Group Holding Ltd. “Aramco is ready

for listing whenever the shareholder makes a deci-

sion to list,” Chief Executive Officer Amin Nasser said

last month. “It’s going to be very soon.”

Beneath the hype, the sale isn’t quite the exer-

cise in free-market liberalization the prince first

● Sportswear market

share in China

2013 2018

Nike

Adidas

Anta

LiNing

Other

THE BOTTOM LINE Anta, the third-largest sports apparel maker

in China, has seen its sales grow more than 80% in three years.

Now it wants to conquer China and expand into the West.

23%

20

15

6

36