From homogeneous involution to differentiated breakthrough, Chinese sports brands enter the era of segmentation

Ask AI · Why is Anta’s multi-brand strategy putting pressure on profits despite revenue growth?

In China, several large sportswear companies—Anta (02020.HK), Li-Ning (02331.HK), Xtep (01368.HK), and 361° (01361.HK)—have recently released their FY2025 results in succession, and all have recorded revenue growth.

However, the divergence in each company’s development is becoming increasingly clear. Differences in revenue scale and business deployment are quietly outlining a deeper shift in industry competition—from homogeneous, cutthroat internal competition to differentiated breakthroughs.

Revenue grows, but it’s a mix of good and bad

In terms of scale, Anta still leads the industry in revenue. Full-year revenue reached RMB 80.22 billion (the same below), up 13.3% year over year. Profit attributable to shareholders was RMB 13.59 billion, down 12.88% year over year. Excluding accounting impacts related to the listing and share placement of the ASICS Group in 2024, profit attributable to shareholders increased 13.9% year over year to RMB 13.588 billion.

Anta’s revenue maintained double-digit growth this time, benefiting from higher-end brands under the group, such as FILA, with higher price premiums and scale effects. As one of Anta Group’s two pillar brands, FILA generated full-year revenue of RMB 28.469 billion, up 6.9% year over year, and operating profit reached RMB 7.418 billion, up 10.1%.

Another company, Li-Ning, also showed revenue growth but net profit decline. In 2025, Li-Ning achieved total revenue of RMB 29.598 billion, up 3.2%; net profit attributable to equity holders was RMB 2.936 billion, down 2.6% year over year.

Compared with the two leading companies, Xtep and 361° both saw revenue and net profit rise. By precisely capturing the timing of the sports event economy, Xtep’s 2025 revenue was RMB 14.151 billion, up 4.2%; net profit was RMB 1.372 billion, up 10.8%. Last year, the boom in domestic marathon events in China continued to surge. Coupled with policy directives in Shandong and other regions to increase event hosting efforts, consumption related to running increased significantly. Xtep said that marathon events bring opportunities and that it will further strengthen its advantages along the running track in the future.

For 361°, last year’s revenue was RMB 11.146 billion, up 10.64%; profit attributable to shareholders was RMB 1.309 billion, up 13.95%. The company’s growth relied on capturing lower-tier markets with high value-for-money, and it has been developing the children and outdoor segments.

In summary, the four companies’ current business layouts have different emphases. Anta follows a “multi-brand, globalization” route, with brands such as FILA focusing on the premium segment; Li-Ning focuses on “performance + trends”; Xtep centers on running, developing “mass + performance”; 361° is rooted in the mass market and deeply serves lower-tier markets.

Cross-border competition becomes normalized

That said, it’s also necessary to point out that challenges faced by billion-yuan leading companies cannot be ignored either.

Cheng Weixiong, an expert in brand strategy consulting for the footwear and apparel industry, said that in 2025, competition across the whole industry became extremely intense, with terminal discounts staying high. The amount of discounting—7-fold discounts in stores and 50% off online—has created dual pressure for some brands: inventory pileups and profit compression.

Taking Anta as an example: although in recent years the group has gained resilience in growth through a multi-brand matrix, with FILA maintaining mid-single-digit growth and premium brands such as Descente and Kalenor approaching growth rates of around 60%, thereby supporting incremental revenue; on the other hand, profitability has continued to face pressure. Anta’s core Anta brand achieved only low single-digit growth of 3.7%, and its revenue share fell below 45%. In Cheng Weixiong’s view, behind this is that each brand’s channels and resources are operating independently and cannot achieve cost sharing and resource pooling. Although premium brands have impressive growth rates, their scale is limited, and the incremental profits generated are far from enough to cover the heavy asset burdens of the main brand—leaving the group’s overall profitability under continued pressure.

Data from the National Bureau of Statistics shows that last year China’s total retail sales of consumer goods nationwide reached 501202 billion yuan, up 3.7% year over year. Meanwhile, retail sales of sports and entertainment goods in units above the designated size increased by as much as 15.7% year over year, far exceeding the average growth rate of retail sales of consumer goods in general, making it one of the most active growth engines in the consumer market.

Several industry practitioners told this reporter that while the overall market is growing, as more players enter, competition is becoming increasingly fierce.

Some competitors are getting stronger. Lululemon recently released its FY2025 full-year results, showing that global net revenue grew 5% year over year to USD 11.1 billion. Lululemon expects that net revenue in Q1 of FY2026 will be between USD 2.4 billion and USD 2.43 billion, representing growth of about 1% to 3%. International business is the company’s growth engine, with net revenue from international business rising 22% year over year last year. Among them, performance in mainland China was especially strong: net revenue there grew 29% year over year, far above the average level.

And this year, the upward momentum has remained in place. Regarding full-year FY2026 guidance, Meghan Frank, Interim Co-CEO and Chief Financial Officer of lululemon, said during the results presentation: “The company expects that in FY2026, revenue in mainland China will grow by approximately 20%. The business performance in the first quarter will continue to be strong; revenue is expected to grow 25% to 30% year over year.”

The company has clearly set the China market as a top priority. In FY2026, lululemon plans to open 40 to 45 new company-owned stores globally, and 25 to 30 stores in international markets, with most to be located in the China market.

The industry practitioners mentioned earlier told this reporter that Chinese consumers’ demand for sportswear is no longer limited to sports scenarios, but extends to multiple settings such as daily commuting and casual outfits. Now, more and more foreign brands are moving down and penetrating the market, and they have started to divert some of the mass consumer group as well, making competition in the market more diverse.

For leading domestic companies such as Anta and Li-Ning, how to strengthen brand advantages and innovation capabilities, consolidate their market position, and enhance global competitiveness; for mid-sized domestic companies such as Xtep and 361°, how to further deepen differentiated layouts, precisely capture policy and lower-tier market dividends, and achieve high-quality development—these are questions local companies need to consider in competition going forward.

(This article comes from First Financial)