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Skechers exercises more markets across country

By ZHONG NAN | chinadaily.com.cn | Updated: 2022-09-05 09:21
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A Skechers outlet is seen in Shanghai. [Photo by FAN JIANLEI/FOR CHINA DAILY]

After putting a 1.35 billion yuan ($195.4 million) logistics center into operation in Taicang, Jiangsu province, in August, Skechers-a US-based athletic shoe and clothing company-will raise its store numbers from around 3,000 this year to up to 6,000 in 2026 across China, said its senior executive.

Unlike many global brands, which are satisfied with sales revenue generated from China's first and second-tier city markets and are not willing to enter and invest in the lower-tier markets due to different management models and customer preferences, Skechers will open stores from 50 square meters to 3,000 sq m in lower-tier markets based on their economic growth conditions, consumers' shopping habits and other characteristics, said Willie Tan, CEO of Skechers China, South Korea and Southeast Asia.

"Chinese consumers' demand for footwear and clothing products has been changing fast and become more diversified. For example, consumers' clothing styles in Shanghai can be so different compared with other cities. There is no one-size-fits-all solution for designing products in China," he said.

In addition to deploying more resources in e-commerce sales channels, Tan said the company will continue to reinforce its wide-ranging product layout for all age groups as China has become a cradle for fostering numerous new consumption scenarios, products and services in the sports and health industries.

Prompted by new opportunities brought by the Regional Comprehensive Economic Partnership agreement-which came into force in January-and growing domestic sales, the company is currently building the second phase of its Taicang logistics base. The facility is expected to be operational in the fourth quarter of 2024, with a total investment of 1.65 billion yuan.

Taicang has a well-developed container port and a comprehensive bonded zone, as well as a convenient location to connect many eastern Chinese cities, including Shanghai and Nanjing, Jiangsu province. The distribution center will not only further enhance the company's overall supply chain competencies but also facilitate its export business in the coming years.

The enlarged Taicang facility will play a key role alongside the company's other businesses in building a more comprehensive logistics network in China and other markets, particularly in the Asia-Pacific region, the company said.

Together with supportive Customs policies, including tax refunds and re-export measures within Taicang's comprehensive bonded zone, Tan said it is convenient for the company to gain sufficient and quality production materials with lower costs from Suzhou's Wujiang district, a manufacturing base for garment and apparel materials in Jiangsu.

"We might face greater losses if we relocated our manufacturing facilities to Southeast Asia after the COVID-19 pandemic forced many factories to shut down for certain periods in the region over the past two years," he said, adding that even though countries like Vietnam have recovered from the pandemic this year, their logistics infrastructure and capability cannot meet market's demand. No matter how good the products are, there is no way to transport them during tough times.

Although supply chains in the Yangtze River Delta region were disrupted by the COVID-19 pandemic in the second quarter, China remained a growth engine for multinational companies. Foreign direct investment (FDI) in China grew 17 percent year-on-year to 798.33 billion yuan in the first seven months, statistics from the Ministry of Commerce showed.

With a number of multinational companies announcing they will take part in the annual China International Import Expo (CIIE) for the first time this year, including global metals and mining company Rio Tinto Group and Japanese multinational semiconductor company Renesas Electronics Corp, Skechers will bring its latest Slip-ins series sneakers to the fifth edition of the CIIE to be held in Shanghai in early November. This will be the fourth time for the company to participate in the trade fair.

Bai Ming, deputy director of international market research at the Beijing-based Chinese Academy of International Trade and Economic Cooperation, said these facts show foreign investors' strong willingness to continue to invest big time in China.

"The growing FDI figures in China disprove earlier reports that companies from certain developed countries are withdrawing from China and shifting their investment into their home markets and other economies such as Vietnam and India," Bai said, noting that business fields including consumption, high-end manufacturing and services will remain hot spots for global capital.

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