BEIJING: Chinese sports brands have thrown themselves into the Olympic Games, sponsoring the event itself, the China Olympic Committee and supplying apparel for athletes from more than ten countries, but observers are unsure if these efforts will pay off.
For example, 361 Degrees International is an official Games sponsor and is providing official clothing to the thousands of volunteers and technicians who will ensure the event runs smoothly. It has also more than doubled the number of places its goods are sold in Brazil, to 900.
But Hong Xue yu, a researcher at GuoTai JunAn International, warned that this "aggressive" expansion was a risky strategy. "It's possible that sales of 361 Degrees in Brazil may not increase as quickly as it expects after the expansion of its sale points, because the economy there is weak and local brands are also very competitive," he told the South China Morning Post".
"The brands that medal-winning athletes wear, for instance, always become popular after the games." And that could be good for Peak Sport Products, which is sponsoring apparel and footwear for athletes from various countries.
But whether the returns are worth the investment is open to question. According to Chen Meng, an analyst with China Securities and author of a new report on the sports apparel industry, "sportswear sales have become less and less sensitive to these types of global events".
While Chinese brands can use the Games to gain international recognition, they still face major challenges in their home market, where growing wealth means many consumers are looking to trade up.
"Chinese consumers previously considered Nike and Adidas as a kind of luxury," said Hong. "Now they are able and willing to pay for global brands rather than domestic ones, as their spending power has increased."
But there are plentiful opportunities for Chinese brands thanks to the government's promotion of sport and continued urbanisation.
"The mass market has the fastest growth in the consumer sector, but to increase their share of that, Chinese sports products have to be functional, and of high quality," said Hong.
A consistent approach to branding may also help. Edward Bell of FCB China noted in Admap that Li-Ning, for example, "has dithered terribly over the years", with eight different taglines in ten years.
Data sourced from South China Morning Post; additional content by Warc staff