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Chinese sports companies focus on sponsorships

(Agencies)
Updated: 2010-06-14 15:09
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Peak, known primarily for its basketball shoes, trails behind Li Ning and Anta in this cluttered market but has been making inroads, opening 1,027 new stores last year and seeing total revenue rise 51 percent to $456 million.

Already the official sponsor of the NBA in China, it boasts individual deals with 12 NBA players, including Jason Kidd and Ron Artest.

Peak's deal with the WTA Tour is worth seven figures annually and includes cooperation on tennis festivals in China, a player apparel program, and revenue-sharing on a cobranded apparel line. Xu said it was part of an expansion strategy for 2010 that would include sales in other parts of Asia and North America.

"We just want to extend our brand name from basketball to tennis," he said. "China is our top market. Signing deals with international sports competitions is to attain our goal of becoming more global and more professional. But of course the primary impact will be on the Chinese market and then the global market."

Related readings:
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Chinese sports companies focus on sponsorships Li-Ning opens flagship store in Singapore
Chinese sports companies focus on sponsorships Adidas may expand into third tier, small cities
Chinese sports companies focus on sponsorships Adidas forecasts rising sales in China
Chinese sports companies focus on sponsorships Struggling Adidas sees long-term growth ahead a

The deal taps into an educated, high-income demographic with a game that has lifestyle and fashion angles, said Chris Renner, president of sports marketing firm Helios Partners China. It also gives Peak a new avenue for growth in the competitive market.

"It's like trying to barge your way into a fancy club, there's no seats left and you have to find a nice seat that fits. And the WTA is a nice one, it's one of the few left out there that has prestige, fashion. It has a nice demographic and it gives you a nice story to tell," Renner said.

Nevertheless, the challenges for Peak are stiff, according to interviews with shoppers in central Beijing.

"It's an OK brand. A very common Chinese brand," said a 26-year-old student surnamed Fang, who refused to give his full name as is common among media-shy Chinese. "It's not comparable with Nike."

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