Sports brands: 5 mistakes when entering the Chinese market

For ISPO.com, Stefan Kracht, Managing Director at Fiducia, a management consultancy specializing in China, gives an overview of the right steps to take on the road to China. Kracht is responsible for 120 employees in four international offices.

In the first part of the interview, Kracht explains why sports brands in particular hold such good cards in China. Here, in the second part, he explains common mistakes and pitfalls when entering the market and reveals what sports brands need to pay attention to in marketing and how important opinion leaders are.

Stefan Kracht says there are five key areas where mistakes need to be avoided:

When planning market entry, both legal and economic considerations must be taken into account. The corporate structure must be legally compliant and at the same time achieve certain strategic goals, such as speed-to-market.

What supports the establishment of a solid corporate structure economically is the establishment of a suitable enterprise resource planning system from the very beginning. This makes processes more controllable and transparent through functions such as inventory management, accounting and financial reporting, while also linking them to the point-of-sale (POS).

The Chinese market requires a certain level of commitment. Decisions cannot be made at headquarters in Europe or in the hands of managers who travel to China now and then.

You need the right people on the ground - managers with in-depth knowledge of the local market who are also capable of enforcing your international corporate standards. Since this profile is not easy to find, sports brands need partners who know how to find good employees.

A sports company should conduct a proper market analysis to determine which product lines are suitable for the Chinese market, to whom they should be sold and how they should be marketed.

The Chinese consumer is very interested in product features and will immediately recognize whether the sporting goods meet their expectations.

There are very professional distributors in China who know the right distribution channels and how to deal with international companies.

The difficulty is finding them. We encourage our customers to look for distributors in a structured way: set up strict evaluation criteria, scan the market systematically, and then approach selected partners.

In China, there is an exciting combination of offline and online channels in marketing for sports brands. These "O2O synergies" must be exploited. Collaboration with key players and through well-established distribution channels is crucial.

Here, the right partners need to be found from the start and it should be understood how KOLs - Key Opinion Leaders - work in terms of marketing in China.

Can you elaborate a bit more on marketing? What are the differences in marketing between China and Europe when it comes to sporting goods?
From my point of view, the main difference is that online marketing and online sales are more intertwined than in the West. Within the chat app WeChat, brands have much better marketing options. But the app also supports transactions, discounts and even giveaways. Understanding and taking advantage of all the opportunities this app offers is a key competitive factor these days.

Another big difference is online shopping habits. In this respect, China is a completely different dimension. All consumers regardless of age group, region and income use the main e-commerce platforms.

ISPO offers the Market Introduction Program at ISPO Beijing and Shangahi. How does a company benefit from this three-day seminar?
As part of the MIP, we will shed light on the Chinese market in a structured and practice-oriented manner. We want to address executives from the sports industry. The goal of the program is to provide a complete overview that companies can use in their internal discussions to shape their market entry.

We will provide a snapshot of the sports market, including market figures, trends and developments, competitive environment, as well as legal requirements and personnel. The seminar will be designed so that we can have discussions. Attendees will be encouraged to ask questions. They can expect to go home with answers, ideas, and an analytical framework to structure their planning process.

You mentioned the marketing. What about the differences in marketing between China and Europe, when it comes to sporting goods?
From my perspective the main difference is that online marketing and online sales are more intertwined than in the West. For example, within the chatting app WeChat, brands have access to typical marketing options such as influencers via key opinion leaders (KOLs).

But the app also supports transactions, price reductions, and even gamified giveaways. Understanding and leveraging all the options that a single app offers, is a key competitive factor nowadays. Another big difference is the fast adoption of online shopping habits. In this regard China is a whole different dimension. The main e-commerce platforms have been widely adopted across age groups, regions, and income levels.

ISPO offers on ISPO Beijing the Market Introduction Program Market Introduction Program. How does a company benefit from this three-day seminar?
During the MIP, we will shed light on the Chinese market in a structured and practice-oriented way, within an intimate circle of advisory experts and sports industry leaders. The goal of the program is a full overview that companies can use during their internal discussions as they lay out their market entry.

I will be sharing a snapshot of the sports market, including market sizing, trends and developments, competitive landscape, legal requirements, and setup options. The size of the group makes it possible to have engaging discussions. So participants can come equipped with questions and concerns, and can expect to leave with answers, ideas, and an analytical framework to structure their planning process.