Sports wearing in China
By Li Fangfang (Chins Daily)
Updated: 2008-11-10 14:46

Sports wearing in China

For young Chinese urbanites, owning several pairs of sports shoes is natural.

Sports apparel is an indispensable part of their fashion sense. And they can hardly imagine that when their parents were young in the 1970s the ultimate sports dream was perhaps just a pair of ping-pong paddles.

Sports shoes and colorful sweat suits were far beyond their parents' expectations at a time when wearing a pair of army green Jiefang (liberation) brand shoes was enough make the wearer stand out from his or her "comrades".

Until the 1980s, when living became easier, sports slowly became a part of people's daily lives.

However, sports shoes had only one style - white canvas sneakers with yellow rubber soles. People still recall the using white chalk to "paint" the shoes after washing - a cheap, simple way to keep their shoes from turning yellow due to the low quality laundry soaps.

Although China's sports products industry has a short history, it has developed at an amazing speed. Today, sports products aren't luxuries for many and it's difficult to spot identical shoes being worn on the streets. According to statistics from World Federation of Sporting Goods Industry, China now accounts for more than 65 percent of sports goods production in the world.

Nearly all the international sports brands have entered China to further mine the market potential. They are not only the creators but also the beneficiaries from China's speedy development.

For the German sports conglomerate adidas, China has become the most important market and is expected to be its second-largest revenue market after the US by the end of this year.

"The adidas Group has been active in the China market for over two decades, and in that time we have borne witness to the remarkable changes that have transformed the country, changes that the adidas Group too has directly experienced and is honored to have been a part of," says Wolfgang Bentheimer, managing director of adidas China.

Since his first visit to China in 1998, and after traveling to the country many times in the following years, Bentheimer says: "I could see and experience first-hand the fast development and progress the country has made. It is incredible to see how the Chinese consumer market has evolved in only a few years, and what potential this market still bears for brands and those companies which are able to meet the needs and desires of Chinese consumers."

In the first half of 2008, adidas Group sales in China increased over 60 percent on a currency-neutral basis.

Just one day before the opening of Beijing 2008 Olympic Games this August, adidas announced that in terms of market share, it was the leading sports brand in China for the first time, where nearly 50 percent of all its products are being produced.

"The Beijing 2008 Olympic Games served as a platform for us to reach market leadership with brand adidas in the Chinese market. Our design and development center in Shanghai will keep creating products that inspire consumers around Asia and other parts of the world. We clearly expect our success story in China to continue," says Bentheimer.

"The adidas Group has excelled in the first half of 2008, achieving double-digit top- and bottom-line growth. Our business in China was a big contributor to this growth," says Herbert Hainer, CEO and chairman of adidas AG.

Adidas' role as the official sportswear partner of the Beijing 2008 Olympic Games, the expansion of distribution for adidas and Reebok, as well as the development of TaylorMade-adidas Golf have been the primary growth drivers for the company in China.

"We are well on track to reach our sales target of more than 1 billion euros for the adidas Group in China by 2010," says Hainer.

Grow with China

"Adidas has a long history of involvement in sports in China. Adidas' first cooperation with Chinese soccer dates back to 1981 and continues to the present day," says Bentheimer.

Adidas has also been heavily involved with the development of basketball in China, too. The first contract with the China Basketball Association was signed in 1985. Adidas has sponsored different professional basketball teams in China over the past few years.

Adidas started business in China in the early 1990s and founded a subsidiary in 1997. Back then, adidas China only had around 20 employees. But now it has more than 1,300 employees with offices in Shanghai, Beijing and Guangzhou. At the end of 2007, the adidas Group operated 4,800 stores in China and is planning to take that number to 5,900 in 2008.

By the end of 2010, the German brand expects to have more than 7,000 adidas and Reebok stores all across China.

"Sport has enjoyed a growing popularity among Chinese over the past decades. More and more people are living an active lifestyle, participating in such sports as basketball, football, badminton and running," says Bentheimer.

"With the fast growth of the Chinese economy over the last years, Chinese consumers have enjoyed growing disposable incomes they are willing to spend on luxury products and international labels including sporting goods," he adds.

This July, adidas opened its largest store in the world - the four-floor adidas Brand Center in Beijing, with a size of 3,170 sq m.

"Now adidas is entering sixth-tier cites in China. We are really distributed across China," says Bentheimer.

He says that at present, 60 percent of the sports brand's revenue is contributed by the first-tier to third-tier cities, while the rest 40 percent comes from fourth-tier to sixth-tier cities.