Sports brand HOKA bets on zest for running
With the first brand experience center opened in downtown Shanghai in early May, international performance-driven sports brand HOKA aims to better explore the market potential in China by leveraging opportunities to do "something bolder, bigger, more experience-led, and something to surprise and delight Chinese consumers", said the company's top executives.
Their comments came during an interview on May 7, when HOKA opened a 1,600-square-meter three-storey experience center in Shanghai, the first of its kind that the brand has opened in the world.
"The size and scale of the center is not going to be something we will match in every market. So in three or four key cities around the world we see ourselves doing something similar, but not any more than that," said Marco Ellerker, president for global marketplace at Deckers Brands, which acquired HOKA in 2012.
Ellerker added that the other key cities suitable for such centers include Paris and London.
As a 16-year-old brand, HOKA is not yet known to everyone. So the newly unveiled experience center allows potential customers to come in and explore the brand for the first time. The HOKA Lab within the center features six sets of testing equipment able to measure seven different body functions such as ankle or cardiopulmonary functions.
This marks the first time that HOKA has made this available at any of its stores.
The conventional 150 sq m stores in shopping centers are not adequate to integrate such testing functions. The rapidly expanding group of runners in China, be it professional or amateur, is another major reason for the move, according to Olivier Lorans, senior vice-president of Asia-Pacific at Deckers Brands.
Located in Xintiandi, the landmark in central Shanghai combining traditional Shikumen architecture and various modern retail options, the new experience center will attract both local and international consumers thanks to the large flow of tourists, said Ellerker.
HOKA entered the Chinese market about eight years ago. But Lorans said that China could be the market to influence the Asia-Pacific, while Shanghai can serve as a bridge to connect the rest of the region.
According to Lorans, China's running market took off about 12 years ago. While COVID-19 held back most businesses for some time, somehow the period boosted running sales as wellness became a new trend.
Deckers Brands' latest results released at the end of January showed that HOKA's net sales rose 23.7 percent year-on-year to $530.9 million in the third fiscal quarter ended Dec 31, 2024. "Impressive results" is the phrase that Deckers Brands' President and CEO Stefano Caroti has used to describe HOKA's growth.
According to the General Administration of Sport of China, the country's sports industry has been "accelerating its development". The sports industry will see its value amount to 5 trillion yuan ($695 billion) in 2025, accounting for 2 percent of China's GDP, while consumers' sports expenditure will exceed 2.8 trillion yuan.
"Therefore, HOKA has set high growth targets in China. To reach its ambitious goals, HOKA will not only upgrade their existing footwear series in China, but also expand the apparel product lines. The adjacent categories of road running, trail as well as lifestyle products, could be areas for HOKA to further expand the product lines," said Ellerker.
As Lorans further explained, most people make the shift to running around the age of 30 or 35. The major reason is that they start to feel the pressure of work increase at this age. They do not have too much time and running seems to be the most easily accessed sport.
But with the lifestyle products, HOKA may approach younger consumers in their 20s. If consumer loyalty is built at this earlier age, they will probably engage with the brand for performance products when they start to work, he said.
