China’s economy has been growing – make that exploding – for the past few decades. That’s a given, and ain’t no secret, unless you’ve been living under a coral rock deep inside Atlantis!
But if you’re like me, you’ve probably never heard of sporting goods brands like Li-Ning and ANTA, that are rising fast in China’s domestic market. I stumbled upon this article from last year, but felt it was so appropriate to demonstrate China’s voracious appetite for consumer goods. Sporting brands are directly linked to a growing middle class, who are evolving beyond meeting basic staple needs, and into a better quality lifestyle.
What got me smiling though was not the fact that China’s (and other Asian markets’) growing middle class is gobbling up brands left and right, but their logos, as they looked awfully familiar. I guess decades of churning out gazillions of sporting apparel, footwear and equipment has taught the Chinese a thing or two about branding and the power of having strong (and easily recognizable) brand logos. So they did take a page or two from Nike’s, Reebok’s, and Adidas‘ brand book.
Chinese domestic sports brands are popping up in shopping malls across lower-tiered cities, giving foreign brands a run for their money. According to 2009 annual reports, LI NING is at the top of the Chinese market with a gross profit of 3.97 billion RMB (23% increase over 2008), followed by ANTA at 2.47 billion RMB (33% increase over 2008).
The sheer quantity of domestic-brand shops is even outnumbering foreign competitors in some cities. The shops – easily recognizable from their signature logos, slogans and colors – are usually grouped together in malls or shopping areas, providing consumers in medium and small cities an easily identifiable set browsing area for athletic wear. This merchandising technique seems to quite successful in promoting domestic brands.
I’m of course fully aware that China’s domestic market is an altogether different animal, and for the vast majority of consumers, the international sporting brands are out of their reach. But not for long, I’m sure.
Never forget, however, that there are pockets of newly-minted rich across all urban areas of China, and these people can spend like there’s no tomorrow. But the greater potential is in the middle class.
The challenge for international brands is to fully understand the local consumer and create products that meet their needs. Seems simple, but not always easily adaptable for most big brands. Brand equity has a lot to do with it, as they avoid sacrificing brand value for the sake of pursuing a lower market or price point. Ego, might be the other reason.
But as some international brands have proven, among them French luxe brand Hermès, that launched a made-for-China only luxury sub-brand, Shang Xia, making such investments is a sound decision, with positive long term implications. Shang Xia is positioned as a luxury brand priced below Hermes and sold only in China.
Which begs the question… Nike, Reebok, Adidas, Puma and Fila (perhaps… ?)... are you listening?
The style of domestic brands such as ANTA and LI NING meets my demands with the moderate price. In addition, I can easily find these kinds of shops. ~ Tianqian, 21, female, Haian,Teacher.
I prefer ANTA, Warrior. I just focus on the style, bright color and good quality. Brand doesn’t matter. ~ June, 21, female, Nantong, student
I buy domestic brands’ products more, the main brands LI NING and XTEP. Foreign brands are too expensive; we don’t have enough money. The domestic brands are appropriate for consumers just like us. ~ Margeret, 20, female, Rudong, Teacher
I don’t choose any brand but ANTA. I never pursue the famous brands. I guess I choose ANTA because of its good quality. ~ Zhicheng, 16, male, Rugao, Student
I mostly choose foreign brands. As for the domestic brands, I have only bought LI NING.. Honestly, the design of the domestic products is ugly and poorly made. ~ Lareina, 21, female, Nantong, Student
Inspiration: Bergstorm Trends