Heilan Home isn’t a widely known name beyond China, but in its home country, it’s a giant. Since its founding about two decades ago by Zhou Jianping—now among China’s billionaires—the mass-market men’s brand, also known as HLA, has grown into one of the country’s biggest clothing companies, operating some 5,000 stores, mostly within China.
Anta Sports, meanwhile, first gained recognition making shoes for badminton players. These days it’s China’s biggest sports company, and has global ambitions. It sponsors a handful of NBA players including Klay Thompson, and recently led the consortium that bought Finland’s Amer Sports for $5.2 billion, owner of brands such as Salomon, Arc’teryx, and Wilson.
Both are now among the ranks of the world’s top-performing fashion companies, according to a new report by consultancy McKinsey & Company and media outlet The Business of Fashion. It underscores how these Chinese companies are growing and becoming competitive in an industry long dominated by American and European businesses.
McKinsey and Business of Fashion ranked the industry’s 20 “super winners”—those companies making nearly all the industry’s economic profit, defined as recorded profit minus its cost of capital, as it becomes increasingly polarized between winners and losers. Inditex, parent company of Zara, topped last year’s list, followed by Nike and LVMH, the luxury group behind brands such as Louis Vuitton and Celine. This year Nike moved into the top spot, while a few new companies bumped others out of the rankings.
Anta, Heilan Home, and activewear maker Lululemon moved into the rankings, with economic profits of $532 million, $413 million, and $400 million respectively. Companies including Michael Kors and Gap dropped out.
According to the report, the appearance of Anta and Heilan reflects “shifting attitudes in favour of local brands by Chinese consumers, as local heroes increasingly compete with international high-street brands in areas such as value for money, innovation in design and quality, and customer service.”
Many Chinese shoppers have typically viewed foreign brands as superior to home-grown labels, which has given foreign brands such as Nike a lead in the country. The mindset has begun to change, and more shoppers are starting to look to domestic labels such as Li Ning and Peacebird.
At the same time, McKinsey predicted last year that 2019 would see China become the largest fashion market in the world, overtaking the US. This rise in Chinese spending coupled with the new preference for Chinese brands is giving a boost to the country’s fashion and footwear makers, Anta and Heilan chief among them.