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SBD Global/July 13, 2012/Marketing and Sponsorship

China Sports Brands Losing Out To Western Labels

Chinese sportswear brands, from Li Ning to Anta Sports Products, "have lost favor with Chinese consumers who prefer foreign brands or casual clothes," according to Fiona Law of the WALL STREET JOURNAL. In recent years, Chinese consumers have been moving toward the Western brands that have been "cutting their prices sharply while appealing to the hip." Nike sponsors NBA player Jeremy Lin, who "has a huge China fan base." Research and investing company Core Pacific-Yamaichi analyst Eugene Mak said, "Because they do less on research or advertising, Chinese sports brands have lost touch with what consumers want. Foreign brands are more popular with China's growing middle classes who can afford pricier and trendier products." Two smaller Chinese sportswear brands, Peak Sport Products, and China Dongxiang Group, which has the China franchise for Italy's Kappa shoes, also said that "tough competition should eat into their earnings this year, and warned of lower profit." Annual reports of Chinese sports brands showed that they had inventory levels climbing 36% to 58% between '10-11. The brands have also "over expanded." Between '07-10, Anta and other Hong Kong-listed Chinese sports brands -- Li Ning, Xtep Int'l Holdings and China Dongxiang -- opened a combined 9,900 stores in China (WSJ, 7/12).
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