China is often considered the crucial market for footwear companies looking to establish global dominance. But in recent months, home-grown shoe brands such as Anta Sports and Li-Ning have threatened the growth of international players in the region.
Consumers in China increasingly prefer their own homegrown brands as opposed to international brands like Nike and Adidas, according to a December report from The NPD Group, which analyzed the Chinese footwear market in Q3 of 2021.
According to the data, six of the top ten footwear brands in China in Q3 were domestic brands, up from four in Q3 of 2020.
In running, seven of the top ten brands were Chinese, with Anta in the lead. Some international brands saw sales decline in Q3 of 2021 compared to 2020. In the sports leisure category, Adidas was the top brand in China, followed by Warrior, a domestic brand. Nike nabbed the third sport and was followed by two more domestic brands, Anta and Fila. (Anta owns Fila in China.) Both of these brands saw double-digit year-over-year growth rates in Q3 2021. Erke, another domestic Chinese brand, nabbed the sixth spot and had a year-over-year growth rate that exceeded 400%.
New Balance was the only international leisure brand to see growth in China in Q3, with its average list pricing increasing more than 10% year over year. NPD attributed this growth to the brand’s “retro classic model strategy.”
While major brands like Nike and Adidas are still featured these top ten lists, their power over Chinese consumers is in jeopardy — and their growth rates are slowing.
In recent quarters, non-Chinese brands have lost share as a result of boycotts against Adidas, Nike and other Western brands that have refused to source cotton from China’s Xinjiang region, due to allegations of forced labor among the Uyghur population in that area.
Boycotts aside, analysts said these brands need to create products that resonate with Chinese consumer in order to win them over.
Adidas said it is developing localized marketing campaigns from a new creation studio in Shanghai that features relevant Chinese athletes. The goal, explained Adidas CFO and board member Harm Ohlmeyer, is to make sure that one third of new products in the country are tailored specifically to the Chinese consumer.
Guggenheim analyst Robert Drbul also expressed confidence in Nike’s ability to improve its standing in China.