Chinese sports brands wage price war

Standards need to be higher because of the different habits of Chinese consumers, says Mr Wu. “In the West, they have different shoes for basketball, running and playing football. But in China, people just wear one type of shoe for every sport. So I think our standards should be stricter than foreign brands.”

Good durability will be popular with Kenyan consumers too but it is unlikely to be enough to sell shoes outside of price-conscious, developing markets. Most of the top Chinese brands already know this and are working harder on branding and R&D, says Tim Chuah, a consultant with Frost & Sullivan.

This summer’s Olympic Games in Beijing could prove a timely boost. Though no Chinese brand had the budget to compete for official sponsorship of the Beijing Olympic Games (Adidas is reported to have paid $100 million to win the title), several have found a way to use the event to raise their profile.

Li Ning is sponsoring Sudan’s track and field athletes, hardly the best known team on the circuit, and the US table tennis teams, neither of which are ranked above 10th position globally. But these early steps reflect a desire to improve its international image. It may have a loyal following at home but outside China, many people have never heard of the 18-year-old Li Ning brand.

Perhaps more important is its recent move to open a design office in the US. Analysts say most Chinese brands are seriously lagging their international competitors when it comes to design. Tapping creative talent in the US, home of the world’s leading sports shoe maker, Nike, could help Li Ning play a bigger role in the global market.

Mr Chuah expects some brands to leverage their Olympic-related brand awareness to expand overseas. But for most, their strategy “will be based on price”. “Even if local brands offer comparable quality, mentality is everything.”

That may not be a problem for most Chinese sports firms. The domestic market is set to remain one of the most dynamic in the world, as rising incomes give more and more consumers the power to buy leisure goods. Erke plans to open 600 new shops before the end of the year, which are likely to pull in substantially bigger sales than the paltry $1 million targeted for its African markets.

“Once the market matures, it will be good to have a foothold in foreign markets. But our focus now is still on China. About 700 million people can’t afford Erke products now but in the future they will,” says Mr Wu.