Tracking the sports shoes and apparel industry: the economy remains the same, and the inventory is in good condition

2020-08-26  395

Since the domestic epidemic has been brought under control, sports shoes and clothing have recovered smoothly, and there is no need to be pessimistic in the short term. Data from various aspects can be used to confirm the industry's prosperity, including: monitored online sales data, financial reports issued by foreign sports leaders and recent operating conditions, and sports distributors' income. Under the disturbance of the epidemic black swan, sportswear has shown its prosperity, and companies in the industry have also shown good responses. From the perspective of the pattern, the trend of focusing on the leader is still deduced. We believe that companies with good brand power and operational management capabilities will be stable and long-term.

According to data from the Ali platform, sports shoes and apparel grew faster in the second quarter than in the first quarter. Both sports shoes and sportswear accelerated significantly in the second quarter. There are several reasons: First, the overall domestic epidemic is well controlled, offline consumption is gradually picking up, and the public's enthusiasm for optional consumer products is picking up; second, China e-commerce in 618 The promotion of e-commerce platforms and brands has made great efforts in discounts and subsidies, effectively mobilizing consumer enthusiasm; third, the consumer group of sports shoes accounts for a relatively high proportion of students, and the return of school students to school has partially released the suppressed demand.

E-commerce helps to destock and is optimistic about the recovery of the brand's subsequent profitability

The sales of sports shoes and apparel increased sharply in June, which was mainly due to the 618 mid-to-large promotion activities. Apart from Double Eleven, 618 is the most important e-commerce festival in China, especially in the first half of the year when offline consumption was suppressed. Both the platform and the brand have attached great importance to it, and the discounts in this event have also exceeded the previous ones. . Alibaba reported that in the first 10 hours of the 618 event this year, GMV soared by 50% year-on-year, brands participating in Tmall doubled from 2019, and various product categories broke last year's records.

The e-commerce platform uses vouchers and coupons to discount top brands such as Nike, Adidas, Anta, FILA, and Li Ning. Brands also have direct discounts that strongly attract purchases. This will greatly help reduce the inventory of international brands in China and the retail inventory of domestic brands, increasing the possibility of more full-price sales and profit growth for these brands in the second half and next year. At the same time, we expect that the Double Eleven promotion will accelerate the decline in inventory, so that brands are expected to control their inventory at a reasonable level before the epidemic during the year. These are conducive to the recovery of the brand's later gross profit margin and operating profit margin.

The prosperity is still the same, and the wearing habits are sports and leisure

The industry will maintain a double-digit compound growth rate in the future. According to Euromonitor data, the market size of sportswear will grow by 17% in 2019, reaching 316.6 billion yuan. Among the sub-categories, the fastest growth rate of functional sports shoes reached 23%, mainly due to the rapid growth of people participating in sports such as running. In terms of branch companies, Nike is the leader in sportswear in 2019, with a market share of 21%. Looking ahead, Euromonitor expects that the compound growth rate of the sportswear industry will be maintained at 11%, reaching 542.5 billion yuan in 2024.

Both fashion and professionalism, the acceptance of domestic brands continues to increase

While the growth rate of the sportswear industry remains strong, it also presents some new characteristics. This has led to changes in the pattern of the industry, including: domestic brands have become more recognized among young people, and Li Ning and Anta explained that Guochao is striving to catch up with international brands. Professional requirements have increased, and brands have accumulated independent technologies; 3 Fashion requirements have increased, and brands value the improvement of brand image.

The rising national pride of young people has driven the continued strong growth of Li Ning and Anta's domestic sportswear brands. In recent years, more brands have adopted joint names to launch new products, winning the love of young people. National pride is more obvious in the younger generation, helping domestic brands to be in an advantageous position in the industry competition.

The technological attributes of products promote the upgrading and development of the industry. Sportswear, especially sports shoes, pay more attention to design, comfort and performance. Therefore, sports brands attach great importance to the development of new products, especially the application of new technologies. In addition to the continuous innovation of Nike and Adidas international brands, domestic leading companies such as Anta and Li Ning are also continuing to invest in research and development of new technologies. For example, Anta's A-FlashFoam technology greatly improves the elasticity of the midsole, helping to reduce the resistance of the foot when running. It is the R&D investment of sports brands and the continuous launch of new products equipped with new technologies that enable this industry to continue to advance compared to other footwear categories.

Consumers pay more attention to the design and beauty of clothing when choosing sports shoes. Sportswear with fashionable elements is becoming more and more popular. The increasing purchasing power of young consumers has become the main reason for the rapid development of sports fashion apparel. Young consumers pursue personalization and comfort of clothing, so they especially favor products that have both fashionable and athletic features.