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China’s sportswear giant Anta gets Presidential plug

President Xi Anta - Retail in Asia

As Beijing becomes the only city in history to host both the summer and winter Olympic games, Chinese President Xi Jinping took to Zhangjiakou in the nearby Hebei province — one of the co-host cities of the games — to encourage government officials and promote the international sporting event. Though this visit may appear to be standard procedure for any head of state, it tangentially sparked another somewhat surprising headline. While walking through the snow, Xi was seen on the state-sponsored CCTV (Central China Television) wearing a black down jacket made by Fujian-based Anta, a domestic sportswear company. Anta’s stock prices rose 3 percent on the Hong Kong stock market immediately after the television program aired, according to Tex Asia.

The event may speak more about the vagaries of the market than Anta’s potential for growth. Nevertheless, almost a decade after the 2008 Summer Olympics, Anta finds itself in an enviable position in the market, especially at home. Anta cited a 16.9 percent growth in net profit reaching 2.39 billion yuan ($347 million) in 2016, buoyed mostly by domestic sales. Additionally, Anta reported 2016 revenues to be up 20 percent year-on-year to 13.3 billion yuan ($1.94 billion).

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Though the 2022 Winter Olympics will likely not generate as much hype as the previous Summer Games, as the demand for luxury brands cools in China, the country’s sportswear market is expected to surpass its luxury goods market by 2020, according to a report by Euromonitor. In the years leading up to the Winter Olympics, the sportswear market is expected to post double-digit year-on-year growth, expanding to over $280 billion yuan ($43 billion).

While the brand’s logo remains relatively unfamiliar to those outside of China, Anta’s strides in the Chinese market has allowed the company to respond to the post-Olympic slump following the previous games. Shuttering low-performance stores, while adding new profit generators by acquiring Fila’s loss-making Chinese business from Belle International, and introducing Descente — a Japanese skiwear brand — to the Chinese mainstream through a joint venture, Anta now controls over 10 percent of the sportswear market at home. It is increasingly aiming for the higher-end, putting it in direct competition with the likes of Nike and Adidas.

What’s more, though the home market has always been a priority for Anta, the brand is increasingly shifting its gaze overseas. Having secured shoe deals for highly coveted NBA players like all-star Klay Thompson of the Golden State Warriors, Anta has managed to establish a direct-to-consumer e-commerce business in the United States, as well as a wholesale partnership with American retailer Shoe Palace to distribute the brand’s equipment throughout the West Coast.