Fashion companies that partnered with Anta Sports, China's largest sportswear corporations, to enter the local market are facing growing, unspoken concerns. Working with Anta, which has a vast distribution and sales network, is seen as a "success formula" for cracking the Chinese market lately, but it also entrenches a power-imbalanced relationship that forces them to read Anta's mood.
According to the industry on the 8th, Musinsa recently joined President Lee Jae-myung's state visit to China as part of the business delegation. Musinsa is a representative Korean fashion company investing heavily in the Chinese market. With an IPO ahead, results from overseas operations, including China, are urgently needed to drive top-line growth.
Musinsa entered China in Aug. last year by establishing a joint venture (JV), "Musinsa China," with Anta. It opened its first overseas offline store in Shanghai last month and plans to expand the number of stores this year in key commercial districts, including Nanjing East Road, one of Shanghai's main shopping streets, as well as Xujiahui and Hangzhou.
The equity structure of Musinsa China is 6 to 4. While Musinsa has the upper hand in equity terms, Anta is widely seen as holding the reins in actual decision-making. Anta is said to have invested to grow Musinsa Standard into a guochao ("patriotic consumption") SPA (vertical apparel retail) brand to rival Japan's Uniqlo. Thanks to the collaboration with Anta, the pace of entry into China has quickened, but there is talk that when issues such as government approvals arise, Musinsa bears the full brunt of the risk. Even regarding matters tied to last month's mid-month event introducing the Shanghai store, Anta reportedly offered little cooperation.
Other fashion companies that entered China by partnering with Anta, such as Kolon Industries (FnC), appear to be facing similar difficulties. Even when there are no clear issues with the products themselves, they are repeatedly asked to make fixes during inspection, and there are many cases where unconventional standards are imposed belatedly.
It is known that product launches and other logistics schedules are frequently adjusted as Anta introduces conditions that were not specified in the contract. There are also frequent cases where additional tests or procedures demanded by Anta for already mass-produced inventory increase the expense burden.
A fashion industry official said, "Even if something unreasonable happens during the transaction process, there is nowhere else that will take delivery quantities at Anta's level." The official added, "From the standpoint of domestic corporations, their bargaining power inevitably weakens in the unfamiliar Chinese market."
Kolon FnC entered China in 2017 by establishing the joint venture Kolon Sports China with Anta on a 50-50 equity basis. Retail (based on consumer prices) sales steadily increased to 260 billion won in 2022, 400 billion won in 2023, and 750 billion won in 2024. There is speculation that last year's revenue could have reached 1 trillion won.
Anta Sports is a sportswear corporations that overtook Nike and Adidas to rank No. 1 in market share in China. In 2019, it acquired Finland's Amer Sports, which owns Arc'teryx, Salomon, Wilson, Atomic, and Suunto, expanding its influence in the global market.