Watch out Nike: Chinese brands are catching up (Reuters) College student Li Aihua wears his tattered, grungy Li Ning basketball sneakers with pride. "Li Ning is our Olympic gymnast and his brand is China's most famous so I like to support them," the student at the South China Agricultural University said, sitting in Guangzhou's chic Shangxiajiu shopping area. Li, whose given name Aihua means 'love China', is among a growing number of young consumers who are buying Chinese sportswear from home-grown brands, such as Li Ning and Anta , as Beijing gears up for this summer's Olympic Games. Li Ning, the eponymous company founded by the Chinese gymnast who won three gold medals at the 1984 Los Angeles Games, and other sportswear makers such as Anta, China Hongxing Sports , Peak, and Kangwei still lag global giants Nike and Adidas . But they are catching up fast. "They understand the Chinese market better than international players, and their prices are lower," said Rui Wu, an analyst at JP Morgan. "Li Ning is definitely the market leader because it started earlier than the others." Analysts say the sportswear sector is a good way for investors to benefit from China's surging consumer boom. Retail sales in the country jumped 17 percent last year to $1.3 trillion as increasingly well-heeled Chinese took an interest in better products and lifestyles. China's sportswear market is expected to grow to $7.2bn in 2009 from $3.84bn in 2006, according to Shanghai-based brand strategists ZOU Marketing. In 2006, Nike controlled roughly 16.7 percent of China's sportswear market, compared with Adidas' 15.6 percent, ZOU Marketing says. Li Ning claimed third place with a 10.5 percent slice, and Anta fourth with 4 percent, but those figures are climbing as aggressive marketing lifts their brand recognition. Some foreign investors have seen the writing on the wall. Houston Rockets owner Les Alexander, who provided a home for basketball superstar Yao Ming-China's top sports celebrity-invested $30m for a stake in Anta, which raised $406m in its Hong Kong IPO last year. NEW SWOOSH Li Ning, whose aerodynamic logo bears an uncanny resemblance to Nike's famous swoosh and whose logo "Anything is possible" echoes Adidas' "Impossible is nothing", is planting a flag in the United States. In 2006 the company struck a five-year $1.25m deal with US basketball celebrity Shaquille O'Neal in 2006. It also has sponsorship deals with US National Basketball Association (NBA) stars Damon Jones and Chuck Hayes. Other Chinese sports brands are striking deals with foreign stars in a bid to break into the global brand consciousness. Anta sponsors three players for US basketball team the Houston Rockets, and Peak signed a fourth, Shane Battier, to a $4m endorsement deal. Chinese brands aren't just looking at the United States. Anta is also trying to sell in the Middle East and South America. So aggressive is that push, some deals have raised eyebrows. Li Ning sponsors Sudan's track and field team, and Hongxing's Erke logo will grace North Korea's Olympic team in Beijing. Earlier this month Hollywood director Steven Spielberg quit as an artistic adviser to the Beijing games, saying China was doing too little to help halt bloodshed in Sudan's Darfur region, where Khartoum-linked militia have battled rebel groups. "For China, ordinary consumers do not really care about these political implications," JP Morgan's Rui Wu said. "They might not even know about Sudan." SQUARING UP Some analysts warn that margins are too tight in a cut-throat arena dominated by deep-pocketed global brands. UBS estimates that wages are rising 10-20 percent annually in the clothing industry as labour unions and authorities clamp down on alleged sweatshop conditions and low wages. "Footwear is one of, if not the most susceptible industry to cost pressures from China," UBS said in a February 13 report. "What we have also observed, however, is that the strongest brands have been able to offset these costs with selective price increases on new products, and that selective improvements along the supply chain are providing some help." Local sportswear firms, whose products are often churned out in the same factories used by their global rivals, must simultaneously build prestige and also compete on price. Their sneakers cost on average 200-400 yuan ($30-$56) compared to Nike's 600-1000 yuan."We offer value for money products," Anta CFO Paul Ling Shing Ping told Reuters. "We always tell investors we want to be just like Toyota is in the car industry." Anta runs a network of roughly 4,700 shops, all run by distributors. Li Ning-whose products are roughly 30 percent pricier than its rivals-has about 5,000 shops across China. http://www.thepeninsulaqatar.com/features/featuredetail.asp?file=februaryfeatures122008.xml I am surprised about the $4m figure Battier got. He got much more than Shaq did. Wondering how much money Les made from Anta IPO.
Anta aint ****, but Li-Ning is catchin up to the major brands both fashion and quality wise p.S. i personally think Adidas sux~
I seem to recall some criticism when the Rockets started signing their sponsorships that the Chinese shoe companies had a bad habit of basically ripping off the designs of popular American brands. Are they still doing that?
How does one buy Chinese shoes in the US? I haven't ever seen any in stores of course, do you buy direct? Can you buy them?
i think Yao make a great contribution to Chinese brand. Anyone heard about Anta before Yao came to Rox?
I thought signing with Anta would means they are safe for the season because it's related to the boss. But it doesn't seem so. I am wondering if we will see Hayes or Francis leaving this summer.
in terms of quality you wouldn't expect that chinese brands have to "catch up" at all. they make the shoes over there for us, they'd have to be r****ded not to be able to make shoes for themselves that are just as good but who's going to wear chinese brands other than poor chinese kids? I dont think they even retail over here in the US. you might as well post about feichang cola... sure millions of chinese drink it but no one else in the world is. dont get me wrong, personally I'm sure the shoes are fine, but from a design and marketing standpoint, it's going to be crazy hard for chinese brands to penetrate the US market. it's just not cool to wear chinese shoes, that might be a bigoted mindset but that's the reality. and that's for basketball shoes, forget about "cool shoes" such as Nike SB and the limited edition stuff that people collect
I think they are catching up. I get a pair of abibas ligthspeed and they are just as good as any shoes I have had.
You'd better watch out ur mouth when u are about to open it. You might be stating the truth, but you should find a better way expressing it.
I wonder if they come straight out of sweat shops? If thats the case Nike needs to be allowed to start doing that again.
Sweat shops? Like unforced child labor? Hey, if all the humantarians here in this country give up their daily starbuck fixes and donate that money to poor Chinese kids that have to work in the factory to support themselves, I am all for stopping it. Otherwise, they are better off by working than being poor and not fed. The red commies are taking over this world.
Original is not the name of the game for a developing country like China. I went to a market that sold knock-offs of any brand name you can think of in Shanghai a couple years ago, I was amazed. I think that market has been shut down under the US pressure. But Li Ning, Anta, those are legit business and have their own designs, not just copycats. They have ambitions. And dont say Americans will never Chinese brand shoes. If they are cheap, look as cool, endorsed by sports celebs, why not. 20 years ago, Korean cars were ridiculed the same way, and look where they are now.
