ADI Sales In China Increased By &Nbsp; Domestic Sports Brands Declined.

Adidas, the famous sports brand, released its third quarter report today. The report shows that Adidas's group sales revenue in the first three quarters of this year is 10 billion 81 million euros. According to the exchange rate unchanged, it was 14% higher than that of 9 billion 59 million last year. Among them, Adidas's sales in the three quarter of the Greater China region amounted to 900 million euros, compared with 721 million euros in the same period last year, an increase of 25% over the same period last year, excluding the exchange rate factor, an increase of 28% over the same period last year, which ranks first in the six largest market of Adidas.

Compared with the rapid growth of Adidas's performance in the first nine months, the performance of domestic sports brands is not optimistic. The third quarter performance data show that many domestic sports brands including Lining, Anta and PEAK are affected by different degrees of inventory, and the performance growth is slowing down.

In the first three quarters of this year, Adidas's sales in the first three quarters of the Greater China region amounted to 900 million euros, compared with 721 million euros a year earlier, up 25% from the same period last year, excluding the exchange rate factor, an increase of 28% over the same period last year, which ranks first in the six largest market of Adidas.

Related analysts said that

Adidas management predicts that Adidas's annual sales in 2011 will grow by nearly 12% based on the exchange rate unchanged.

Compared with the previous year, the expected growth rate of wholesale business revenue will be close to two digits, of which greater China will become the dominant force.

Mr. Gao Jiali, managing director of Greater China in Adidas group, said: "our performance in 2011 has shown that our development trend in Greater China has been irreversibly changed to a healthy, sustained and strong direction."

{page_break}

In sharp contrast to the success of Adidas in China this year, the performance of domestic sports brands declined. In October, the major domestic sports brands announced third quarter results, showing that domestic brands including Lining, Anta and other brands all appeared slowdown in performance.

The announcement of major domestic sports brands shows that in 2011, domestic sports brands collectively appeared large inventory, and cleaning up stocks remained the focus of the third quarter of major sporting goods brands.

Related analysts believe that due to the early optimistic market expectations and radical market strategy, the major domestic sports brands are now stranded in inventory, and the industry is in an overall adjustment period.

Data show that the inventory of Li Ning Co in the first half of the year amounted to 992 million yuan, while the inventory value at the end of 2010 was 806 million yuan, and the stock amount increased by about 200 million yuan.

Affected by inventory and other factors, the company's income in the first half of the year was 4 billion 289 million yuan, a decrease of 4.8% from 4 billion 505 million yuan in the same period last year, and net profit of 294 million yuan, down nearly 50% from the same period last year's 582 million yuan, and its share price has fallen by nearly 50% since the beginning of the year.

Lining, the founder of the list, fell to 291st place from 64 last year.

JP Morgan's analysis reports that Li Ning Co's revenue will fall 13% this year and its profits will fall 60%.

The same slowdown is also accompanied by PEAK. The data released by PEAK show that PEAK's performance growth slowed sharply in the third quarter, compared with the same period last year, the same quarter sales increased by only 6.2% in the third quarter.

The open data released by PEAK showed that the order volume in the second quarter of 2012 increased by 9.5% compared with the same quarter in 2011. This is the lowest increase in PEAK's orders since 2009, after which PEAK's orders increased by more than 20%.

Anta sports business in the third quarter has also declined sharply.

According to the expected data released by Anta, sales growth in the same quarter in the third quarter has declined, while the retail discount rate has also expanded.

Anta has planned to add 600 to 800 stores next year. It is still unknown whether the adjustment will take place now.

Compared to this year's gloomy situation, the past five years have been the glorious five years of China's sporting goods industry. In just a few years, Lining and Anta's performance grew strongly, while PEAK, China trends, XTEP, 31st degree, PEAK and so on, the results were quite striking. In 2009, the performance of several major domestic sports brands such as Lining, Anta and PEAK had nearly 30 billion sales, and about about 60000000000 of the retail sales were about five times the total consumption scale of domestic sports products five years ago.

{page_break}

International sports brand channel sink, domestic sports brand pressure will be bigger and bigger.

At the end of June last year, Li Ning Co put forward the "brand remolding" plan and launched the new slogan of "MaketheChange".

But the subsequent change is the decline in orders due to backlog of products and poor channels.

Zhang Zhiyong, President and CEO of Li Ning Co, admits that brand redevelopment is not a success.

Relevant analysts believe that the two or three tier city market competition will be more and more intense, and the pressure of domestic sports brands will be bigger and bigger.

Relevant data show that so far, the domestic sports goods brand outlets have 70% layout in two or three line cities, so the increase of the number of stores in the two or three line and below cities is one of the lifeline of the domestic sports brand performance growth.

With regard to the number of retail outlets for sports goods, the number of stores at home and abroad has reached more than 40000, and the consumption potential of the two or three tier sports goods market has basically been excavated.

In addition, the international famous sports brand is also increasing the excavation of the two or three tier city market in China.

In 2010, Nike China and Adidas China launched their five year plan in succession. They all indicated that in the next five years, the new stores in the two or three tier market will be increased, and the products that are closer to the two or three tier market will be echoed. The target market will be directed at the main market of domestic sporting goods brands, and the future competition in the two or three tier market will be even more tragic.

With the continuous sinking of famous sports brands such as Adidas and Nike to the two or three line city, the domestic sportswear brands are facing more and more pressure.

In a report, HSBC pointed out that Chinese consumers' brand loyalty is not high, especially in the two or three tier cities.

As Nike and Adidas have launched various low prices, the impact of local sports brands will be more and more serious.