The Beijing Olympics are less than a year away and one of the hottest races shaping up is not among the athletes, but the companies that outfit them.
China is one of the largest emerging markets and a top focus for shoemakers fighting for market share. And as next year's Beijing Olympics approach, the intensity is reaching a new high.
"The Beijing 2008 Games are set to be the greatest sporting event in modern Chinese history," said Paul Pi, head of marketing for Adidas in greater China.
Adidas is an official sponsor of the Olympics. In addition to paying a reported US$80 million for the sponsorship position, the company has coordinated a marketing blitz that includes opening an average of two stores a day in the country.
Adidas have declared the event will help put it in the No. 1 position in China by next year, a coveted spot now held by shoe giant Nike.
Nike Inc says China is poised to become its second-largest market in the world after the US by 2009. The company has seen big gains there; its first-quarter earnings reported last month show sales in China jumped 50 percent. And Nike executives say the company is widening its lead there.
Nike declined to discuss its Olympics marketing plan but says the Olympics is less about advertising than about supporting the athlete.
The company is sponsoring 22 of the 28 competing Chinese federations. And it has one of China's hottest athletes, hurdler Liu Xiang (劉翔), wearing the swoosh.
Both companies may hit US$1 billion annually in sales in China by the Olympics, said Terry Rhoades, managing director of Zou Marketing, a sports consultant company in Shanghai.
different strength
In third is Chinese company Li Ning -- a premium local brand but a fraction of the size of its international competitors. Analysts say Li Ning has a different strength, with its base in the smaller and less urban markets where brands like Adidas and Nike have not spread.
Li Ning, founded by a former Chinese gymnast, has also ramped up its design team and is sponsoring several Chinese teams slated to be strong contenders in the games.
But shoemakers say the race isn't over when the medals are handed out.
Denson says the years following the Olympics may be even more exciting than this growth period.
It's a sentiment shared by both companies.
The games will represent a "real, tangible sea-change in attitudes toward sport in China," Pi said, by spreading a growing trend of interest an athletic lifestyle.
Sports were once seen as a luxury in China. But as the middle class has grown and culture has changed, interest has exploded.
Parks and other facilities are being built Basketball has become a top sport, and viewers can watch several NBA games a week in China's major cities.
Companies like Nike and Adidas, which have had a presence in the country for decades, have helped spur the growth with sponsorship of teams and tournaments. Nike has made serious community inroads in China, such as investing in Dong Dan Park in Beijing, the equivalent of draping a major city park with a swoosh.
blanketed
Nike, Adidas and other shoe brands have blanketed cities in China with stores. Unlike other markets where shoe makers often see their product sold in retail stores along with other brands, in China the brand-owned store is king.
So shoe companies are offering an inviting format and stronger brand message that is a step up from traditional Chinese retail stores. Both Nike and Adidas have about 3,000 stores each in China and have aggressive growth plans.
As payoff for the long-term work, a surprising number of Chinese consumers are buying premium brands like Nike and Adidas, despite low incomes and prices several times that of a traditional Chinese shoe. Other brands such as New Balance, Pony and Puma are making inroads as well.
International brands have tried to capture the hearts of the youth who are more consumer-driven than preceding generations.
Young urban Chinese, and a growing minority in the countryside, are like their counterparts from Brooklyn to Bangkok: They wear athletic shoes, baggy T-shirts and track suits.
Nike has re-crafted its "Just Do It" campaign for China with innovative short advertisements aimed at the young Chinese consumer and longer pieces such as an innovative film of a Chinese female street basketball player struggling with her wants and the restraints of her parents.
"You can't just sell to them, you have to identify with them," Denson said.
The race for marketshare in China won't end with the Olympics; it could become even more exciting after the Games are over.
"Can the shoe wars be determined by the Olympics?" Rhoades asked. "No, but it's one more battle."
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