(Yicai) Oct. 8 – The Board Chairman of ANTA Sports Products Limited ("ANTA Group" or the “Group”), Ding Shizhong, shared his views on the Chinese sporting-goods giant’s “single-focus, multi-brand, globalization” strategy, its approach to managing a multi brand portfolio and his phased approach to business during a recent in-depth two-and-a-half-hour conversation with Yicai in Xiamen.

Just a few days after the interview, ANTA Group announced that it had completed its acquisition of a 29.06 percent stake in PUMA SE for EUR1.5055 billion (USD1.6 billion) in cash, officially becoming the German sportswear company’s largest shareholder.

“We don’t want to be China's Nike, we want to be the world's ANTA,” said Ding, who was dressed in an ANTA Guanjun T-shirt and a KOLON SPORT jacket, paired with Salomon shoes.

Ding first set out this vision in 2005. Over 20 years later, he repeatedly stressed during the interview that simply replicating the business models of already successful international brands and trying to surpass them would be almost impossible. ANTA Group therefore had to find a different path.

This led to its "single focus, multi-brand, globalization" strategy. From FILA and Descente to Amer Sports and Jack Wolfskin, more than a dozen brands have been brought into ANTA Group’s business portfolio through different forms of investment and acquisition.

ANTA Group has evolved from a single-brand company with annual revenue of just over CNY5 billion (USD746 million) in 2009, when it acquired FILA, into an international multi-brand sportswear group. Including Amer Sports, in which ANTA Group is the largest shareholder, these two companies’ annual revenue now exceeds CNY120 billion (USD17.9 billion), while ANTA Group’s market capitalization is above HKD200 billion (USD25.5 billion).

Responding to criticism that ANTA Group has relied on acquisitions to drive its growth, Ding told Yicai that “ANTA is not in the business of buying and selling brands for financial gains. We are committed to building and operating businesses for the long term.”

The key test, he said, is whether an acquired brand can create value for consumers and whether its products continue to improve after the acquisition. Ding described himself as a long-term thinker. Investing in the Herzogenaurach-based PUMA had actually been under internal consideration for a decade but never materialized because the conditions aren't ripe yet.

He compared the acquisition process to sailing a ship. The captain must remain committed to the destination while continuously adjusting the ship's course according to the weather, wind direction, waves and condition of the crew. This is what Ding calls his "phased approach."

Why PUMA?

PUMA’s assets, product portfolio, sports expertise and global value chain are highly complementary to ANTA Group’s, Ding said. "ANTA does not have a strong presence in football, while PUMA excels in that area,” he said. “PUMA also has a strong lineup in motorsport equipment as well as advanced technologies in running and professional track and field."

ANTA Group will participate in PUMA’s governance at the supervisory-board level, while "respecting PUMA's brand DNA and maintaining its independence," Ding said.

Management Model

How does ANTA Group manage a diverse portfolio of brands? Ding described the group serves as an enabler for its multiple brands.  The better a brand performs, the less intervention by the group is needed. The group only steps in when a brand encounters problems and requires support.

At the group level, ANTA focuses on strategic alignment, risk management and shared back-office capabilities. It provides brands with services ranging from supply chain management and logistics to IT and talent development and risk management, but it does not interfere in their day-to-day operations.

"Our multi-brand management model currently has no direct equivalent anywhere in the world,” Ding said. “We have developed it through our own hands-on experience."

Ding believes that any sports brand without professional performance capabilities and specialized technology cannot truly be considered a sports brand. He said brand value should be judged on four criteria, namely technical expertise, product functionality in real-world sporting scenarios, reliable quality and accumulated brand heritage and culture.

“Simply copying someone else’s successful model is unlikely to help you surpass them. Both the ANTA Group and its individual brands must find their own path to success. Building a brand takes time, and taking a brand global is, in essence, about bringing its culture to the world. For ANTA, this means not only introducing our brand identity and culture to the global consumers, but also demonstrating that Chinese companies have the capabilities to successfully manage global brands."

However, focusing exclusively on professional athletes and enthusiasts can limit the brand’s growth potential. The goal, he said, is to make top-notch professional technology accessible to everyone."

Ding pointed to the Salomon XT6 city commuting shoes he was wearing as an example. The product removes waterproofing that most consumers do not need in everyday use while retaining other advanced technologies. Since ANTA Group acquired Amer Sports that is home to Arc'teryx in 2019, the scale of Arc'teryx’s professional products has doubled.

Group Anchor

In Ding's view, ANTA's flagship brand remains the "anchor" of the group, with retail sales exceeding CNY45 billion (USD6.7 billion) last year. Its strategy going forward includes maintaining its positioning in mass-market sports, leveraging global resources to enter more markets, increasing investment in research and development as well as continuing to support Chinese sports.

Over the past decade, ANTA Group has invested over CNY20 billion (USD2.9 billion) in research and development. In 2005, it established the sports industry's first sports science laboratory. It is now investing several billion Chinese yuan, equivalent to hundreds of millions of US dollars, to build the Group’s Global Innovation Industrial Park.

Ding believes the ultimate competition among sports brands is not about traffic, distribution channels or mergers and acquisitions, but rather about innovations in sports science, product technology, and performance-driven design.

At the recent 20th Asian Games Aichi-Nagoya, 43 percent of the 169 gold medals won by the Chinese delegation came from athletes representing the 20 national teams sponsored by ANTA.

Brand Globalization

On international expansion, Ding distinguishes between corporate globalization and brand globalization. The former, he said, means developing management capabilities on a global scale, while the latter means building connections with consumers in markets around the world.

"ANTA Group's path is to drive brand globalization through corporate globalization, leveraging the capabilities developed through its multi-brand portfolio to support the main brand. The ultimate goal is for ANTA, a brand that grew out of China, to become a brand respected by global consumers," Ding said.

Looking back on more than 30 years in the business, Ding recalled that he travelled into Beijing at the age of 17 with 600 pairs of shoes. Reflecting on his “phased approach” to business, he cited a belief that has guided his entrepreneurial journey. "Many successful people in this world are not necessarily better at what they do than you are. They simply dare to do more."

Ding said that ANTA Group today is already "highly internationalized" in terms of its governance structure, shareholder composition, organizational capabilities and market footprint. In that sense, he said, it has become "the world's ANTA."

The next step is to become a company that is "respected," in other words, respected by consumers and around the world. "We will adhere to long-term thinking and unconditional optimism, stay rooted in the real economy, maintain a consumer-oriented approach and strive to become a company respected by people around the world," Ding said.

"I believe that as a company grows, its corporate culture is shaped by the core values and beliefs espoused by its founder. ANTA Group has grown a small business into an industry leader with a growing global presence. Along this journey, we have come to recognize that building a successful company is about more than just financial performance.  It is equally important to reflect on the broader value we create as a business." He said.

“As ANTA has grown, we have remained committed to giving back to society. I have often asked myself, 'As a public company, what more can we do for our employees and for society?' Today, we provide our employees with competitive compensation and benefits, while continuing to invest in philanthropic indicatives that create lasting value for the communities we serve.”

“ANTA Group has contributed nearly CNY2 billion to support sports and healthy lifestyles among young people in underdeveloped regions, benefiting over 10 million children and adolescents. Over the past three years, we have also partnered with the United Nations High Commissioner for Refugees (UNHCR) to provide humanitarian assistance to more than 300,000 displaced young people.”

He further stated, "Our family has established the Hemin Foundation with an endowment of CNY10 billion. Through the foundation, we have committed CNY2 billion to building a public hospital in Jinjiang, in partnership with the Shanghai Sixth People’s Hospital.  The hospital will serve as a national regional medical center."

Editor: Kim Taylor