Guosen: The growth in the sports brand industry cannot conceal the hidden worries of price wars. Pay attention to the brands that are leading in a new direction in the price competition spiral for opportunities.

Guosen released a research report stating that brands leading in the direction of price escalation are presenting new opportunities. The sports brand industry as a whole maintained good growth in the fourth quarter, but with a strong atmosphere of price wars, the critical point of the transition between new and old product cycles may be approaching. Brands that can lead new market demand trends in the future are expected to show significant growth and profitability levels, while brands that focus solely on past paths through low-price competition will face a major test in the overall operation health of all channels. Through the preliminary feedback from the sales of new products recently launched by brands, the company has already seen an increase in prosperity brought by new technologies and scenarios, and recommends focusing on the driving effects of the overall business trends of brands in the future. Guosen's main viewpoints are as follows: Cutting-edge insight: industry differentiation at two levels, in urgent need of innovative breakthroughs According to third-party e-commerce data, the sports and outdoor market continued to grow, but the trends in clothing and footwear prices were opposite: clothing showed a clear trend of "rising in both quantity and price", mainly driven by high-end brands, with a noticeable trend of "the more expensive, the more bought"; footwear prices fluctuated, showing a clear trend of "increasing in quantity and decreasing in price" recently (from the data of four platforms after joining Drow). Looking at the sub-function scenarios of footwear, outdoor and commuting footwear maintained high growth, previously leading growth carbon plate/marathon and training shoe prices have dropped significantly; looking at individual brands, a small number of high-end brands have seen high sales growth with stable prices, while most mainstream brands have experienced significant price reductions with limited growth. Looking at specific footwear categories, running shoes may have stalled due to technological upgrades, with clear discounting of new products upon launch, only major product innovations can lead to repricing, with many companies launching high-end new products in the "no plate competition and training" segment to tap into new markets. In the casual footwear sector, amid a sluggish fashion scene, top international brand fashionable shoes are undergoing a consolidation period, with high-end brands opening up the commuting scene with increased growth. Industry overview: Q4 growth slowdown on three platforms, clothing showing an increase in both quantity and price while footwear prices escalating According to third-party e-commerce data, in Q4 2025, the overall price of sports categories slightly increased, while sales volume slightly decreased (sales amount -1.2%, sales volume -1.7%, average price +0.9%); outdoor categories achieved an increase in both sales and price (sales amount +13.5%, sales volume +8.6%, average price +4.8%); the growth in sports apparel prices mainly came from activewear, while the average prices of sports shoes showed a downward trend. Sports apparel sales amount nearly grew in double digits, while sports shoes experienced negative growth, with running shoes performing relatively well with only a slight decline of 1.8%, while basketball shoes saw a widening decline; in terms of channels, Douyin held the highest market share, with outstanding growth on Tmall. International brands: Nike continues to face adjustment pains, while Adidas sees growth in basketball shoes and casual shoes despite a slight decrease in average prices Nike continues to face significant adjustment pains, with sales amount dropping significantly by 15.5% year-on-year, and market share decreasing by 1.7 percentage points to 9.7%, with Douyin still the largest e-commerce platform; sales of clothing have slightly decreased, while sales of running shoes/basketball shoes/casual shoes have decreased by 3.2%/37.0%/12.9%/29.1% respectively. Adidas saw sales decrease by 6.2% despite a slight decrease in average prices, with market share dropping by 0.4 percentage points to 8.5%, and poor sales of down jackets due to a mild winter dragging down the overall performance of the sports apparel segment, with poor performance of running shoes showing double-digit declines, while the ongoing popularity of retro basketball shoes continues to drive growth in the basketball shoe category, with a slight overall decline in other sports and fashion shoe categories due to structural changes. Local brands: Facing strong price competition pressure, excellent feedback from professional single products market Possibly affected by price diversion from the Drow platform (especially for major single products like running shoes), the four major local brands saw a slight decrease in market share on the three platforms, with Xtep leading in the running shoe professional matrix, with a strategy of lowering prices for clothing resulting in a slight increase in sales volume. 361 Degrees saw a slight decrease in market share, and the running shoe single products on the three platforms may have been affected by lower-priced platforms, with basketball shoes continuing to decline significantly, and casual shoes seeing a deeper decline. Key points summary: Industry growth potential is advantageous, brand premiums and product escalation go hand in hand The penetration rate of sports and outdoor products remains stable, with Douyin maintaining the top market share. In terms of growth: sports apparel > sports shoes, running shoes > other sports shoes, unofficial channels lowering prices significantly may cause diversion; in terms of prices: basketball shoes > sports casual shoes > sports apparel > casual shoes > running shoes, with an increase in average prices for sports apparel and a decrease in average prices for sports shoes. In terms of brand competition, Nike's market share is under pressure and is currently undergoing a restructuring phase of its product lineup; Adidas' market share is stabilizing, with growth in basketball shoes and casual shoes against the trend; most top local brands continue to dominate the market with their professional running shoe matrices, but overall industry price competition is intensifying. Sales on each brand's Drow platform are growing rapidly. Investment recommendations: Individual stock recommendations: LI NING with strong capabilities in launching popular new products in the mass sports sector, ANTA SPORTS with a strong multi-brand matrix advantage, XTEP INT'L with an expanding running shoe matrix in the mass sports sector, and 361 DEGREES with strong cost-effective capabilities for popular products. Risk warnings: Weak macroeconomic conditions; consumer recovery falling below expectations; international political and economic risks; large fluctuations in exchange rates and raw material prices.