Sneaker city is always a step ahead
Sportswear hub Jinjiang ups its game in search of global gains
When the Chinese delegation walked into the stadium for the opening ceremony of the 2018 Pyeongchang Winter Olympics, their striking white outfits grabbed the attention of fans and immediately had social media abuzz.
The outfit was produced by Anta Sports, China’s leading sportswear brand with a market value ranked third globally, behind Nike and Adidas.
Come the 2022 Games in Beijing, China’s finest will be sporting Anta gear again.
“We reached a partnership agreement with the Chinese Olympic Committee (COC) for cooperation in the fourth Olympic cycle starting in 2009,” said Ding Shizhong, CEO of ANTA Sports.
Last year, Anta sold 60 million pairs of shoes, which, if lined up end to end, would span 1.5 times the flight distance between Beijing and Los Angeles.
Anta is based in Jinjiang, Fujian province, the world’s largest production base for sneakers. The southeastern city produces 40 percent of China’s sports shoes and 20 percent of the world’s, with many other big brands like Xtep and 361 Degrees also made there.
Survival of the fittest
Once an important port city on the Maritime Silk Road, Jinjiang has a tradition of cultural exchange and overseas trading. Since China’s opening-up in the 1980s, Jinjiang entrepreneurs have capitalized on the city’s geographical advantage to sell imported goods to other parts of China. Sneakers proved particularly popular.
Eratat is recognized as Jinjiang’s first shoe company and claims to have produced the city’s first pair of sneakers in 1983.
In 1987, 16-year-old Ding took sneakers produced in Jinjiang to Beijing. Four years later, he started up the Anta company, even though, he recalls, “the concept of ‘sports footwear still did not exist”.
Soon, though, there was an “explosion” in demand and, consequently, sneaker factories.
“There were wholesale markets all over China,” Ding said.
The industry reached its peak around 2008 when Beijing hosted the Olympics, with Jinjiang home to over 3,000 factories, including 21 listed enterprises.
“After that, however, the problem of excessive supply was aggravated, as so many factories were turning out similar products,” Ding said.
In the cut-throat battle for profits that ensued, many of the brands disappeared, leaving Anta, Xtep and 361 Degrees as the main survivors.
Secret to success
Ding says his secret to success is innovation. “In 2005 Anta set up China’s first hightech sports-science lab,” he said.
Expenditure in research and development grew from one percent at the beginning to its current level of 5.8 percent of annual revenue. Anta has also set up design centers in the United States, Japan and South Korea.
“In China, the middle class is rising,” Ding said, explaining that this is how Anta managed to acquire several internation- al brands, including Fila, Descente and Sprandi. These acquisitions have brought more high-end customers and introduced Anta to a global market.
As of June last year, Anta had opened 67 more Fila outlets to bring the total number to 869, as well as opening 15 more Descente stores in China.
Xtep, meanwhile, has cashed in on the marathon craze which is sweeping the country, and now sponsors dozens of races nationwide.
Celebrity endorsement is another major marketing strategy, with Anta and 361 Degrees signing NBA stars such as Kevin Garnett and Klay Thompson to promote their brands internationally.
Jinjiang’s sneaker giants are also targeting domestic tie-ins. As well as the COC deal, Anta last year signed an eight-year contract to become an official sponsor of the Beijing 2022 Winter Olympics and Paralympics.
“Anta will not only provide high-quality service to Beijing 2022 but will also work to help promote the development of winter sports in China,” said Zheng Jie, executive director of Anta Sports.
Both Zheng and Ding joined the 2018 Pyeongchang Olympic Winter Games torch relay at the invitation of Thomas Bach, president of the International Olympic Committee.
‘City of sports’
Jinjiang’s sportswear brands are also aiming to expand into other fields. On March 14, 361 Degrees unveiled a plan to enter the gaming sector by working with top Chinese e-sports club QG.
Homegrown brands are a major factor in the rapid growth of China’s sports industry, which had a total output of 1.9 trillion yuan ($294 billion) in 2016, according to recent government figures. By 2025, that figure is expected to reach 5 trillion yuan ($774 billion).
Jinjiang now boasts over 3,000 sportswear companies. In 2016, the total value of its sports industry had reached 147.2 billion yuan ($23.3 billion), contributing to 34 percent of the city’s overall industrial value.
Recently, the Jinjiang government mapped out a plan to accelerate the industry’s expansion through investment, technological innovation and public service. It says that by 2020, Jinjiang’s sports industry will be worth 180 billion yuan ($28 billion) while consumption in the city is expected to hit 3 billion yuan as more than 40 percent of its residents take up regular exercise.
Jinjiang will host Gymnasiade 2020 and four consecutive biennial FISU University World Cups in soccer from 2019 to 2025, boosting the city’s credentials as a “city of sports” as opposed to just a “city of sportswear”.
At a party last year marking the 10th anniversary of Anta’s public listing, Ding sang a song that is popular among Fujian dialect speakers called
Anta will not only provide high-quality service to Beijing 2022 but will also work to help promote the development of winter sports in China.”
Zheng Jie, executive director of Anta Sports
It could well be the slogan for the city of Jinjiang.