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Top brands ready to take next step with overseas expansion
By Tu Lei (China Daily)
Updated: 2009-01-21 08:01

Most SMEs think about mere survival during a financial crisis. But those with a solid brand put business expansion on the fast track during hard times. That's what Jinjiang's top sportswear designers are doing, and their business is increasing as a result.

In exhibits for spring/summer 2009, the dollar value of orders for ANTA, X-step, and Peak, the leading sportswear providers in Jinjiang, increased by 30 percent, 40 percent and 70 percent year-on-year, respectively.

In the first half of 2008, ANTA's sales reached 2.2 billion yuan, up 52.3 percent year-on-year. It plans to start its children's sportswear business in 2009. "The increase is attributed to the domestic market," said Zhang Tao, vice-president of ANTA.

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Zhang said ANTA has built a world-class research and development center, and set up purchasing, production and distribution in China to meet strong demand from the domestic market.

Zhang's words are echoed by Septwolves, which has remained in first place for six consecutive years in market share for men's jackets. The company sells 90 percent of its products to the domestic market. In 2008, Septwolves opened about 20 stores in second-tier cities including Xi'an, Yinchuan, Nanjing and Changchun, and it plans to enter more cities in 2009. It also built a logistics center in Shenyang, Liaoning province. In the first six months of 2008, its sales income reached 845 million yuan, up 151.9 percent year-on-year. "This year, we plan to increase our network, and buy more equipment when the euro is depreciating," said Zhou Yongwei, board chairman of Septwolves.

While companies elsewhere are cutting staffs, Peak has hired 4,000 new workers, accounting for 45 percent of its total labor force. The company is adjusting its production structure and plans three new production centers and 20 additional processing factories.

Xu Zhihua, CEO of Peak Group, said the company is encouraged by the government's policy of boosting domestic demand and restoring confidence.

In addition to the domestic market and developed economies, which have long been the major export markets, some enterprises in Jinjiang have also set their sights on emerging markets. The main method for overseas investment is to set up trading companies or direct trading channels via chain stores.

Top brands ready to take next step with overseas expansion

X-step has opened stores in Malaysia, Thailand, and Singapore, and will enhance its brand promotion in Singapore, London and New York. Ding Shuibo, chairman of X-step, plans to spend 210 million yuan on expanding production lines and setting up new stores.

ANTA predicts overseas sales will account for 10 percent of total sales volume by 2010, and it has set up branches in Russia, Vietnam, Singapore and the Philippines.

"Although we are faced with an unprecedented change, the demand in both domestic and international market remains strong," said Peak's Xu, who noted that sales of Peak in the Middle East and Eastern Europe rose 60 percent in 2008.

Consumers in developed countries used to prefer high-end products, but as their assets contract, they will turn to products at a lower price but with good quality, according to Wu Rongguang, president of Hongxing Erke Group. Last month, Hongxing Erke Group launched a sales agency in Holland, its first in Europe.

More than 300 enterprises in Jinjiang have set up overseas branches. By June of 2008, 486 overseas private-owned enterprises had been approved by Fujian province, accounting for 71.5 percent of the total approved in the province.

The high-end market is still promising, said Xu, who says now is the time for domestic enterprises to expand here and overseas, to attract modern experience, management and technology talent.

Marketing expert Li Guangdou said product similarity is not equal to brand similarity, and superior talent is the way to beat the competition. ANTA hired Bill Peterson, the founder of Nike's Air Force-1 sports shoes, as its general director, and the company also retained Catalyst Strategic Design studio (which has also worked for Nike) to increase its fashion element. Septwolves hired French designer Daniel Faret to rival well-known brands like Boss or Armani. Peak has established research centers in South Korea and Italy to benefit from the latest global fashion designs and technology. Hongxing Erke's Wu Rongguan said overseas activities help the company hunt for Korean and Italian designers.

The economic crisis is an opportunity for these Jinjiang companies to improve sales channels, enforce team building and introduce new talent, said Septwolves' Zhou.

"Currently, the industry talent is cheaper compared with the past, which is a benefit for the development of companies."


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