While striving to increase presence in domestic cities, Chinese sports shoemakers continue to explore overseas market despite the international financial crisis.
Peak, the first Chinese sport goods brand to manufacture large-sized sports shoes, signed a strategic contract in March with the Federation International Basketball Association (FIBA) to be the latter's Asia's sports brand partner, according to Xu Zhihua, Peak General Manager.
FIBA is an authoritative association governing international basketball competitions.
"Our goal is to become an internationally acknowledged brand," said Xu, who disclosed Peak products would soon be marketed via Footlocker of the United States, and compete with other high-end sports international giants there.
Xu also said that his company, based in Jinjiang, a coastal city in Fujian Province, would open 1,000 new exclusive dealerships in Chinese cities this year. The company's current total of such shops is 5,100.
Peak is not alone.
Xu Yang, the supervisor-in-chief for Anta, another sports shoemaker also based in Jinjiang, contended the current global financial meltdown meant challenges and opportunities as well.
"Due to the impact of the current economic growth difficulty, some businesses will be forced out of market competition, which will in turn make way for companies with own brands such as ours to expand," said Xu. "It will also cost less to sponsor sports games or hire new spokespeople during the financial downturn."
According to Xu, Anta's 6,000th exclusive dealership will open in May.
Peak became the first Chinese sports brand to sponsor NBA games in 2005 and later signed seven NBA stars to be the brand endorsers, the so-called "Star-Team" that includes Jason Kidd, Shane Battier and Ron Attest. Houston Rocket players Luis Scola and Steve Francis also wear Anta shoes on the court.
Both Anta and Peak are thriving when many labor-intensive Chinese businesses are struggling in the international financial turmoil.
Jinjiang, a county-level city with a permanent population of 1.04 million, is home to 3,112 footwear companies employing 380,000 people and producing 950 million pairs of athletic shoes each year, one-fifth of the world's total.
It is also well-known in China for being the hometown of 2 million people of Chinese origin now residing overseas. Before 1978, Jinjiang, a poor farming county with no industry of any sort, had depended on government subsidies totaling 2.52 million yuan (about 370,588 US dollars) a year. Its gross domestic product was 145 million yuan a year, said Mayor Li Jianhui.
Private businesses began to mushroom across Jinjiang as investors made use of legions of vacant houses left behind by those who had migrated overseas and idle funds and labor. The investors started up ventures producing products with supplies materials, designs, and sample supplies and compensation trade in the early years of reform and opening-up, Mayor Li recalled.
Three decades of reform and opening up has transformed the previously poverty-ridden county into an export-oriented, prosperous city with five sectors of footwear and garment making, ceramics and building materials, foodstuffs, light industry and toys. More than 1 million migrant workers have found jobs in the city, according to Mayor Li Jianhui.
The city chalked up 69 billion yuan in gross domestic product last year, 25.8 percent of which was contributed by footwear companies. Its revenue totaled 7.2 billion yuan in the same year.
The international financial crisis, however, has begun to take toll on the city's economy. The city reported double-digit decreases in exports of footwear, toys and stationery, foodstuffs, plus a 3.6 percent drop in garment-making industry in the first two months of this year according to comparable figures of last year.
Also, the city only had an inflow of 19 million US dollars of overseas investment in the first quarter of the year, compared with 162 million US. dollars for the same period last year, according to Yang Yimin, party secretary of Jinjiang city.
"Crises are key times for resource integration and industry reshuffles. A new horizon of development will occur before us if we manage to tide over those crises safe and sound," said Yang. He admitted the current financial crisis was a wake-up call to the problems of depending too much on overseas demand for growth.
The central government's decision to spur domestic demand as a key policy to transfer economic growth mode has provided businesses in Jinjiang with a greater market space as these businesses produce goods vital to human existence, said Yang.
Mayor Li echoed Yang by saying redoubled efforts to garner domestic demand could help Jinjiang businesses offset losses incurred on the international market front when the global current financial crunch strikes.
Jinjiang-based businesses have opened more than 320,000 direct sales shops or exclusive dealerships across the Chinese mainland, 100,000 of which are set up by footwear-making companies of the city, said Mayor Li.
The efforts to explore domestic market have helped Jinjiang-headquartered ventures cushion setbacks in the wake of the global financial crisis.
Local footwear-making businesses of scale -- an industry whose annual sales top 5 million yuan -- continued to see a rise of 19.2 percent rise in industrial output value to hit 7.4 billion yuan in the first quarter of the year. They notched 35.5 billion yuan in industrial output value last year, up 25.8 percent than the previous year.
Another example was the 11th Jinjiang international footwear expo, which was on from April 19-22. This expo attracted more than 300 traders from China and other parts of the world and saw rise of 8.2 percent in business deals to hit 5.76 billion yuan according to the previous expo.?
(Xinhua News Agency April 26, 2009)
