In view of a recovering economy, the global sportswear market is expecting an organic growth of sales ranging from 3-5%.
Ding Shuibo, Chairman and CEO of Xtep talks about what it takes to build a strong brand image, during an interview with Fibre2Fashion Correspondent Manushi Gandhi.
Synopsis:
Xtep was established in 1999, as an original equipment manufacturer for international sports manufacturer. After achieving success in this, it started with its own brand in 2002. Today, the group in majorly involved in designing, developing and manufacturing of sports footwear, apparel and accessories. The company is listed in the Hong Kong stock exchange.
Ding Shui Po, aged 43, is the founder, chairman and chief executive officer of Xtep International Holdings Limited. He has over 25 years of experience in the sportswear industry and is primarily responsible for the overall corporate strategies, planning and business development of the Group. He founded the Group in 1999 and is currently also the chairman of the Board of Directors and president of various subsidiaries of the Group.
Mr. Ding participated in entrepreneurship programs offered by Peking University, and Tsinghua University in 2004 and 2006, respectively. He is currently participating in the EMBA program offered by Xiamen University.
Excerpts:
What is the percentage share of sportswear/active wear in the total global apparel market?
According to the market research from Euromonitor International conducted in Feb 2013, in 2012, the global sportswear market grew by more than 7.5% and exceed US$ 244 billion and in terms of sales value, China is ranked second after the US market. By 2017, the global sportswear market shall set to hit US$ 300 billion. We are in the view that the sportswear market exhibits huge potential for domestic sportswear brands that can demonstrate consistent success throughout the years despite the market ups and downs.
An unofficial finding is that people in US, on average, hoard about 5-6 pairs of sports shoes, including running (track/road/long running) shoes, gym shoes, trail shoes and sneakers etc., per person, vs. in China, the folk, on average owns less than 2 pairs of sports shoes. In view of a recovering economy, the global sportswear market is expecting an organic growth of sales ranging from 3-5%.
What are the biggest challenges and the greatest joy for a sportswear brand?
Biggest challenges: fiercely competitive market environment; however, the market consolidation is beneficial to our company in the long run.
Greatest joy: within a decade of history, we have become the leading fashion sportswear brand in China, enjoying wide appeal and recognition among the Chinese public. Our dream is to be the world's leading fashion sportswear brand and the most preferred runners' choice.
How does fashion influence sportswear?
Our target customers are the youngsters in China. Being "yourself", stylish and fashionable has become the chic of the youngsters nowadays in China – that’s how we differentiate our brand from other sports wear brands in China. "Make a fashion statement with sport at heart" is our motto.
Our core market is the second to fourth tier cities in the PRC, with over 80% of our POS stationed in second to fourth tier cities in the PRC. By infusing the fashion element into the design of our products as well as our marketing initiatives, we weight equal importance of the functionality of our sportswear products. This strategy has proven to be well received by consumers and plays a vital role to the identity of our brand.
Celebrity endorsement also makes up a core part in our parallel marketing strategy that combines sports marketing and entertainment marketing. By using popular celebrities as our brand representatives, it has successfully cemented our trend-setting and fashionable image in the minds of customers.
According to you, which is best performing fabric for active wear?
As a leading fashion sportswear brand in China, Xtep is dedicated to offering sportswear products ranging from apparel, footwear products and accessories that combining fashionable design with high functional qualities. Our wide range of products fully exhibit comfort, flexibility and style to address consumers who nowadays prefer sportswear products for daily use.
Stressing on products' flexibility and comfort, our research and design team has been committed to sourcing and providing materials and fabric that can fulfill such objectives. The “light running” series which endorsed by our brand ambassador, Gwei Lun-mei, the highly acclaimed Taiwanese Actress, is famed for its ultra light weight enviable edge of only 95 grams. Breathable woven sports fabrics and fresh colour characteristics are also our brand signature.
What is the best way to identify the changing trends of consumers in sportswear segment?
Through our Distribution Resource Planning System (DRP System), with an extensive coverage of over 80% of its total point-of-sales (POS), we could directly and swiftly understand our retail end customers' tastes and complex consumption pattern. As of 30 June 2013, the total number of Xtep's POS amounted to 7,435 (31 December 2012, 7,510).
Thanks to the decent sample size, our R&D team, consisted of ca. 600 international talents may gather instant market demand and cater the customers' needs with creative products. Throughout the past few years, we are committed to enhancing our supply chain flow so as to optimise the collaboration within our production/manufacturing team and our R&D team. Our vertical business model, with HQ manufacturing factory plant stationed in Quanzhou, Fujian Province, together with our latently built production plant in Anhui, enable us to react the market fast and agile from concept to delivery.
Regular and constant communication with our distributors and franchisees plays also a very important role for us to understand the taste from our frontline retail channels. We also have mystery shopper campaign and regular trainings and seminars to our stores managers and sales staffs in order to assess first hand market intelligence.
How much do you think futuristic products, especially sportswear, will be able to improve athletes’ performance?
Sportswear goes a long way in helping athletes to achieve better results. When designing all our products, what we always have in mind is the performance level and how they can help to enhance the users’ sports experience. That’s why we are constantly innovating, from the design, technology to materials. For example, we have developed a series of shock absorbent materials like the PU series, EVA series and soft plastic series, which ensures runners of all levels, enjoy the highest level of comfort as well as new sporting experience.
If you could give everybody one piece of advice in regards to building a business around their passion. What would it be?
First and foremost, I believe brand differentiation is the key to stand out amongst the competitors in the marketplace. Ever since we set up the brand "Xtep" in 2002, we have made the strategic move to position ourselves as a “fashionable sportswear” brand. Building on this positioning, We have continued to sponsor numerous mega sports events including international marathons across Greater China region including Hong Kong, Taiwan and PRC, national event such as the "China Olympics".
What are the technological advancements in the field of sportswear? How are you ensuring that the company stays at the forefront of such innovations?
We are committed to offering best. We continually improve our product quality by acquiring cutting-edge technology and equipment. Since we listed in Hong Kong in 2008, we are consistently increasing our investments in R&D, which accounted for about 2% of our total sales revenue.
The first half of 2013, we have introduced three core technologies including PU upper and outsole materials, P2i ion-mask technology and insoles with intelligent environment control. The additions of these new technologies and design innovations were designed to maximize the comfort level of our products while providing exceptional performance, thus enhancing the overall customer experience of wearing our products.
How important is social media in promoting a brand? How can it influence shopping behaviour of the consumer?
We are well-aware that the importance of a clear and sharp branding image. Throughout the past decade, Xtep has been successful in terms of its brand differentiation strategy through its dual entertainment and sports marketing strategy. This is proven to be the key for us to maintain long-term competitiveness withstanding the market headwinds.
Social media has become increasingly important in shaping consumers’ purchase decisions. There are numerous of surveys showing that consumer’s purchasing decisions are highly sensitive to companies' social media posts or advertising, given the overwhelming presence of social media in daily life nowadays.
What innovations or new ventures we can expect from your company in the near future?
Running and football are the two core sports disciplines that Xtep has been focusing. Given the wide support and growing popularity and the stress on participation and enjoyment rather than competition and winning, we are in view that the sports of running and football are well in line with our brand value. On top of sponsoring marathons and campus football leagues in China, we are enhancing the corresponding R&D resources and investments in order to provide more innovative products in related fields.
20230103183907.png)
