Anta Sports Products Limited is China’s largest domestic sports company, founded by Ding Shizhong in 1994. Anta started as a small shoe manufacturer in Jinjiang, Fujian. Today, Anta is China’s leading domestic sports brand valued at over RMB 300 billion (USD $47 billion).
Ding Shizhong is an alumnus of CKGSB. He graduated from the Business Scholars Program and the China CEO program. As China’s leading business school, CKGSB has been able to produce many business leaders who play a pivotal role in China’s economic development. More than 18,000 successful entrepreneurs, industry leaders and executives of multinational corporations have chosen to study at CKGSB for the original China insights, world-class faculty and peer-to-peer learning with China’s movers-and-shakers. More than half of CKGSB’s alumni are at the CEO or Chairman level and, collectively, lead one-fifth of China’s most valuable brands.
China’s sports market has been dominated by Nike and Adidas for decades. But recently, Anta has seen a rise in popularity as Chinese consumers are opting for domestic brands. Anta became the first Chinese sports company in 2020 to surpass one of the two market leaders in net annual profits, reporting annual net profits of USD $796 million compared to Adidas’ USD $518 million. But how did Ding Shizhong transform Anta from a small factory in Jinjiang to China’s leading domestic sports company?
Ding Shizhong started Anta with the ambition to help his family’s financial problems, selling the shoes his father made in Jinjiang. The shoes were subsequently manufactured in a factory and sold to retailers. “It was not easy to sell shoes at that time as Jinjiang was full of shoe manufacturers,” he said.
In Ding Shizhong’s keynote speech at Anta’s 30th anniversary, he discussed that key events in gaining widespread brand recognition were the signing of the table-tennis player, Kong Linghui, in 1999 as the spokesman for the brand, and Anta’s marketing around the Sydney Olympics in 2000. In 2007, Anta listed on the Hong Kong Stock Exchange, raising HKD $3.5 billion, a record for a Chinese sports company.
Re-building Anta’s Model
Following the Beijing Olympics in 2008, the sports industry overestimated consumer demand and many companies suffered from an overflow of inventories. Anta was no exception, shutting down over 600 stores in 2009. Anta entered the low-end sports market to combat the crisis and to sell its excess inventories. However, this resulted in many consumers perceiving Anta as a low-end sports brand.
Ding Shizhong realized Anta needed to make consumers the center of its strategy and cater to the demand of the rising middle class. Following the inventory crisis, Ding changed Anta’s business model from a wholesale model to retail sales. He also ensured Anta had control of its supply chain, from its R&D and design team to manufacturing and distribution. This made Anta stand out from its competitors, such as Li Ning, which relied solely on third-party manufacturers. Anta also acquired FILA China in 2009.
“We needed to purchase more brands to cater to a growing market demand and FILA paved the way for Anta to develop its multi-brand business model…Although FILA was losing money at the time, we developed it into a high-profile brand,” Ding said. FILA would become Anta’s best performing brand and would even out-perform Anta’s own brand in terms of profits.
Anta also signed a sponsorship deal with the Chinese Olympic committee in 2009 to become the official team sponsor from 2009-2012. Since 2009, Anta has sponsored many sporting events including the London, Rio, and Tokyo Olympic Games.
The Acquisition of Amer Sports
In 2019, Anta further moved into the high-end sports market, expanding its brands by purchasing the Finnish company Amer sports which owned well-known brands such as Salompn, Arc’teryx, Atomic, Wilson, and Peak Sport. It enabled Anta to cover all sporting categories – performance sports, fashion sports and outdoor sports. Anta also acquired Descente, the high-end Japanese winter sports company, and Kolon Sport, the Korean outdoor-wear brand.
Acquiring these more high-profile brands has enabled Anta to offer products which cater to consumers at every income level. Ding believes that in the future, these smaller brands have the potential to contribute 50% of Anta’s income, with Anta’s own brand contributing the other 50%.
Anta’s more recent marketing opportunity was as the sponsor of the Chinese Olympic Committee for the 2022 Beijing Winter Olympic Games. The brand’s partnership with the popular freestyle skier, Eileen Gu, has helped gain brand recognition. In February 2022, Reuters highlighted that Anta’s shares are up 67% since the signing of Eileen Gu in January 2022. It also estimated that the Chinese winter sports market will surge following the games. According to Forbes, FILA and Descente were the most worn branded clothes at the Olympic podium ceremonies at the winter games.
Anta has also gained recognition from signing sponsorship deals with other key influencers, such as the NBA basketball players Kevin Garnett and Klay Thompson.
Anta’s recent success is not only due to the increase in popularity for domestic brands, but also due to a greater awareness of the importance of healthier lifestyles in China. The pandemic saw the rise of many home-workout apps, such as KEEP, which have driven the demand for sports clothing.
Creating “Mutual Value”
Ding emphasizes the importance for Anta to create “mutual value” – with consumers, partners, employees, the environment, and society. He plans to invest RMB 3 billion in long-term employee incentives such as growth shares, and he highlighted that Anta would become carbon neutral by 2050 (ten years before the national target.)
Ding Shizhong has contributed significantly to social causes. He donated RMB 14 million to help recovery efforts after the Wenchuan earthquake in 2008, and donated USD $1.2 billion in shares in January 2022 to the Hemin Foundation, a charity which works on community development and charitable activities.
“Our philosophy is to improve people’s lives through sport, and to ensure that every pair of shoes and piece of clothing is made to the utmost quality”, Ding said.
As of December 2021, Anta Sports fell narrowly behind Nike and Adidas in market share in China. Anta held 15.4% of the Chinese sports market, Adidas 17.4%, and Nike 25.6%, according to Euromonitor International.
Ding noted, “Our mission is to become China’s leading sports brand by 2025 and the world’s leading sports brand by 2030.” With Anta’s multi-brand strategy, will it overtake Adidas and Nike to become China’s largest sports company?