12 June 2014
Developing an Outdoor Sports Equipment Brand in China: One Guangdong Company’s Experience
The Chinese market for outdoor sports equipment has been growing rapidly in recent years. Because of keen market competition, a considerable number of manufacturers want to capture the market by building up their own brands. In a market where foreign fashion outdoor brands have an edge in brand awareness, Hong Kong companies wanting to enter would not only have to pay attention to product design and quality. They also have to plan building their brands in order to establish word-of-mouth among consumers and carve out a niche in the mid- to high-end market.
Manufacturers reinventing themselves
Guangdong is a leading production and export base of various types of sports equipment including light industrial products such as sports apparel and sports shoes. In the market for general sports equipment, competition is fierce while growth of overall sales has slowed down because the market is getting increasingly mature. To create greater value-added for their business, some producers are pinning their hopes on outdoor sports equipment that have higher requirements for performance and quality. Some manufacturers are even vigorously developing their brand business, hoping that, by transformation and upgrading, they can cut into the Chinese outdoor sports equipment market that has been developing rapidly over recent years.
Guangzhou Shehe Polegear Outdoor Gear Company Limited is a case in point. The company has been producing outdoor apparel for international outdoor sports equipment brands since the 1980s. Given the outdoor sports boom in China, the company decided in the late 1990s to transform and upgrade itself and created the “Shehe” brand by capitalising on its garment manufacturing experiences.
According to a representative of Shehe, the company has its own product design team and produces high-end outdoor apparel such as down jackets. The production of equipment-type products, however, is outsourced to other manufacturers on an OEM basis. As a result, it is able to offer a full range of outdoor sports equipment including outdoor apparel, sleeping bags, shoes and boots, gloves, tents and backpacks. As of today, the company has already launched more than 2,000 professional outdoor sports products onto the market.
North-south market differences
“In northern China, where seasons are distinct and climates as well as temperatures are more extreme than in the south, consumers engaging in outdoor sports are willing to pay higher prices for products with higher performance and better quality to deal with outdoor weather changes. In contrast, consumers in the south are more concerned with cost effectiveness. They tend to seek the best value for money and are relatively conservative in spending for outdoor sports equipment. That said, at a time when outdoor sports activities are getting increasingly popular, consumers from the north to the south, particularly those with mid-to-high incomes, all have a preference for products of trendy outdoor sports brands so as to highlight their personal taste and get a brand guarantee on product performance and quality,” says the Shehe representative.
He specifically points out that there are plenty of light industry production activities in Guangdong and other coastal cities. In these areas, there are a host of outdoor equipment manufacturers which, when developing their own brand business, would invariably start out with developing the local market where they are located. Consequently market competition in the south is much more intense than in the north. Meanwhile, many lower-end shopping malls and wholesale markets are awash with low-price outdoor garments, footwear, headwear and backpacks of varying quality. In the high-end market, though foreign outdoor brands are offering mostly higher-priced products, they enjoy advantages in brand awareness and pose a challenge to other local outdoor companies aiming to develop brand business.
“Hong Kong companies setting their sights on the mainland market not only should pay attention to product design and quality, but should also work on building brand awareness. Even after carrying out a series of promotion activities, they should still continue investing in brand maintenance in order to establish a good reputation among consumers, distinguish themselves from producers of low-end products, and gain a foothold in the mid- to high-end market,” he adds.
After developing its brand business for more than a decade, Shehe now has 400-plus retail outlets, with sales channels penetrating almost all major Chinese cities. In fact, some of its products are being sold overseas. Moreover, through its vigorous sponsorship of professional mountaineering teams and other outdoor sports, Shehe’s equipment now gets high exposure during extreme sports events.