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Interface News Reporter | Zhu Yongling

Interface News Editor | Lou Qiqin

China Lilang will start a multi-brand layout in the form of a joint venture, and the new member is Munsingwear, an American golf brand under Japan's Descente.

On August 13, China Lilang, a local menswear group, announced in its financial report that it had signed an agreement with Descente Co., Ltd. (hereinafter referred to as "Japan Descente") and its subsidiary Shanghai Descente Commercial Co., Ltd. (hereinafter referred to as "Shanghai Descente") through its subsidiary to establish a joint venture company "Wanxingwei (China) Co., Ltd." (tentative name, hereinafter referred to as "Wanxingwei China"). China Lilang invested RMB 150 million and holds 54% of the shares.

Munsingwear China will operate and engage in the design, sales and distribution of Munsingwear brand products in China. China Lilang said it expects to officially launch Munsingwear brand products in 2025.

Munsingwear is not a newcomer to the Chinese market. The brand entered Shanghai, China as early as 1997, and signed Huang Xiaoming as the brand's first Asian spokesperson in 2014. Munsingwear's iconic logo is a little penguin.

Japan's Descente is the company behind the development of Munsingwear in China over the past two decades.

According to Munsingwear's official website and Descente's financial report, Munsingwear was first established in the United States in 1886 as an underwear manufacturer. In 1955, it produced the world's first knitted golf shirt and has since completely transformed into a golf footwear and apparel brand.

Japan's Descente acquired the trademark rights for Munsingwear in Japan and other Asian countries in 1984. Currently, Munsingwear's business in the Chinese market is operated by its wholly-owned subsidiary Shanghai Descente.

According to Japan's Descente's financial report, Munsingwear's sales in the Chinese market reached 1.417 billion yen (about 69 million yuan) in fiscal 2023 (April 2023 to March 2024), a year-on-year increase of 12.4%, while both Japan and South Korea recorded double-digit declines.

However, in the first quarter of fiscal year 2024 (April to June 2024), Munsingwear's sales in the Chinese market fell 25% year-on-year to 250 million yen (about 12 million yuan). This is partly related to the contraction in the number of stores. As of the end of June 2024, Munsingwear had 23 stores in China, compared with 32 in the same period last year.

According to the store summary information on the brand's official WeChat account, Munsingwear has a total of 19 stores in the Chinese market, but the deadline for this statistic is unknown. Dianping shows that the actual number of stores is even smaller. For example, in the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, Munsingwear only has 3 stores, and the stores in Beijing and Guangzhou shown in the WeChat account have been closed.

Munsingwear’s brand assets accumulated in China in the past were not very rich.

On the one hand, from the perspective of its offline channel foundation, Munsingwear once penetrated into third- and fourth-tier cities such as Mudanjiang and Huzhou, but it is rarely seen in core shopping malls in first- and second-tier cities, especially in Guangdong and Beijing where golf is relatively mature, even though Munsingwear, like many golf apparel brands, is positioned in the mid- to high-end market.

On the other hand, Munsingwear's marketing efforts in the Chinese market have been limited over the past few years. After inviting Huang Xiaoming and Kimura Takuya to endorse the brand in 2014 and 2016, respectively, Munsingwear has not cooperated with celebrities with high visibility in China. In terms of event sponsorship, the last event sponsored by Munsingwear was the first 2022Mitsubishi Electric Automation Open, but did not continue the sponsorship; the previous sponsorship dates back to the Buick China Golf League in 2015.

These measures may be related to Munsingwear's judgment of the Chinese market. Although golf in China has developed significantly in recent years - data from the China Golf Association shows that the number of registered young players in the country has increased from more than 400 in 2013 to more than 100,000 in 2022 - it is still a niche sport.

According to data from the China Economic Industry Research Institute, the size of China's golf products market reached 3.626 billion yuan in 2023, of which the market size of golf apparel products was approximately 1.399 billion yuan - less than half of China Lilang's annual revenue.

In fact, Japan Descente also clearly mentioned in its 2026 mid-term plan that one of its growth strategies in China is to reshape the Munsingwear brand, focus on Japanese-planned products, and establish its image as an American golf brand. Currently, one of Munsingwear’s promotional points in China is to emphasize its “American traditional style.”

The outdoor sports trend is booming in the current Chinese market. It is not surprising that China Lilang chose Munsingwear, as many of its peers have already done so.

For China Lilang, taking over the operation of Munsingwear is also an important step in launching its multi-brand strategy. Currently, China Lilang has only one brand and two series, namely the main series "LILANZ” and Light Business SeriesLilang LESS IS MORE". With these two series, China Lilang's annual revenue has now exceeded 3 billion yuan, and the number of offline stores has reached 2,709 by the end of June 2024.

In the first half of 2024, China Lilang's revenue increased by 7.3% year-on-year to 1.60 billion yuan, of which Lilang LESS IS MORE, which accounted for 24%, contributed more to the growth, with the revenue of this series increasing by 17.3%.

In addition to the introduction of Munsingwear, China Lilang's internationalization strategy is also gradually being implemented. China Lilang revealed in its financial report that it has set up a company in Malaysia and plans to open its first overseas store in Malaysia.

However, facing the changes in the current consumer market, China Lilang remains cautious about growth and expansion. The company lowered its forecast for full-year revenue growth in 2024 from 15% to 10%, and its store opening target in 2024 was also reduced from 100 to 200 to 50 to 100.

It is worth mentioning that China Lilang also stated that it will increase the proportion of the direct-to-consumer model, with a mixed operation of group-owned stores and secondary distribution stores, replacing the previous model operated by primary distributors. In the first half of 2024, China Lilang took the lead in implementing channel reforms for the main series LILANZ in Heilongjiang.