Kolon, FILA Holdings Corp., and other Korean fashion corporations are maintaining steep growth in the once-sluggish Chinese market. A common thread is equity investments in Anta Sports, China's No. 1 sports apparel company. Musinsa, which is preparing to enter China, is also seeking to expand its local business through a joint venture with Anta Sports.
According to related industry sources on the 19th, Kolon Industries' institutional sector FnC division (Kolon FnC) posted an operating loss of 16.5 billion won in the third quarter, with the deficit widening about 11% from last year's 14.9 billion won. Even so, the China business continued to grow. During the same period, the outdoor brand Kolon Sports' China subsidiary (Kolon Sports China) logged retail sales up about 84% to around 200 billion won, and on a cumulative basis for the first to third quarters, up about 92% to 591.9 billion won.
Kolon Sports entered China in 2017 by establishing the joint venture Kolon Sports China with Anta Sports on a 50-50 equity basis, and began full-fledged growth in 2021. It succeeded in establishing itself as a premium outdoor brand despite headwinds such as the post-COVID-19 consumption slump and the "guochao" (patriotic consumption) boom stemming from U.S.-China tensions.
Kolon Sports China's retail-based sales (consumer price–based sales) rose to 260 billion won in 2022, 400 billion won in 2023, and 750 billion won last year. This year's expected sales are in the 900 billion won range, and some project it could reach 1 trillion won. The number of stores in China is also forecast to increase from 191 last year to 225 by year-end.
A key reason Kolon Sports China was able to deliver such results is the local clout of China's Anta Sports, which operates the business together. Kolon Sports' capabilities in product planning, manufacturing, and research and development (R&D) reportedly created synergy with Anta Sports' strong brand recognition and aggressive marketing as the distributor and sales operator.
Anta Sports began in 1991 as an OEM (original equipment manufacturer) shoe factory in Fujian, China, and has since become the No. 1 sports apparel company in the Chinese market, overtaking both Nike and Adidas. It has been bulking up globally as well, including by acquiring Finland's Amer Sports, which owns brands such as Salomon, Arc'teryx, Atomic, Wilson, and Suunto.
Listed on the Hong Kong Stock Exchange in 2007, Anta Sports' largest shareholder is the holding company Anta International Group, with about 43% equity. Financial firms such as the founding owner Ding Shizhong's family trust (9.88%), U.S.-based Vanguard Group (1.91%), and JPMorgan (1.88%) are also major shareholders.
FILA Holdings (now Misto Holdings), which has steadily grown its business in the Chinese market, also established itself locally as a premium sports brand through the joint venture Full Prospect set up with Anta Sports. The equity split is 15% for FILA Holdings and 85% for Anta Sports, with FILA Holdings transferring operating rights to Anta Sports and receiving royalties (brand usage fees).
Operating about 2,000 stores in China and generating annual sales in the 4 trillion won range, FILA ranks first or second in sports transactions during major shopping seasons such as 11.11 and 6.18. Through its "2024–2026 three-year global growth strategy," Anta Sports laid out a plan to expand FILA sales to as much as 50 billion yuan (about 9 trillion won).
With the joint ventures of Kolon Sports and FILA proving successful, the collaboration between Musinsa and Anta Sports, which is pushing into China, is also drawing attention. Musinsa established the joint venture Musinsa China with Anta Sports on a 60-40 equity split. Starting in Shanghai next month, Musinsa China aims to increase its local store count to 100 within five years and reach 1 trillion won in sales.
In particular, analysts say the revitalization of Korea-China exchanges and the renewed rise of Korean fashion brands among younger Chinese consumers bode well for corporations' expansion of local operations. According to the Korea Customs Service, Korean apparel exports to China last year totaled about $545.56 million (about 799.7 billion won), up more than 45% from 2020 ($375.12 million).