Brand is frontrunner in mainland growth

PUBLISHED : Monday, 23 June, 2008, 12:00am
UPDATED : Monday, 23 June, 2008, 12:00am

With tough competition Xdlong leads the way with plans to open about 1,000 stores a year until 2010, keeping its focus on integrated production and stringent quality control

Mainland brand Xdlong is one of the leading sports and leisurewear brands in China in terms of market share by sales. Xdlong, which began operating in 2002, is expanding quickly in response to the increasing demand for lifestyle and leisure products and heightened health consciousness among Chinese customers.

Last year Xdlong accounted for an estimated 3.2 per cent of market share of international and domestic brands, with its purely domestic brands market share at 6.4 per cent in mainland China.

Major sportswear brands are aggressively expanding throughout the mainland, and Xdlong is a forerunner, expecting to open about 1,000 retail stores each year until 2010.

With fierce competition from other domestic companies expanding their business, Xdlong believes it is crucial to maintain effective management of distribution networks, strong brand recognition by consumers, and high quality products and to offer speedy response to consumers' fast changing demands.

Some domestic brands will thrive by securing a good market position beyond this year, while others may be squeezed out in the coming years in the next wave of industry consolidation. Xdlong aims to focus on integrated production and stringent quality control to ensure high-quality products and thus to remain competitive.

The company's integrated production process allows it to maintain control over key stages of its operations. Its internal design and research and development capability enable it to introduce new and innovative products and adjust production output to respond to changing customer demands without compromising quality control.

Xdlong also leverages its in-house manufacturing capacity for the production of footwear with more advanced technological features, particularly running and basketball footwear, in order to ensure quality, and retain proprietary intellectual property and technological know-how.

It outsources production of some products to contract manufacturers including some footwear and all apparel and accessories. Due to the scale of its manufacturing and product offering, Xdlong is able to set competitive prices for its goods.

The company also has a comprehensive quality control system that covers the entire production process, from the purchase of raw materials to processing and inspection of finished products, including products produced by authorised third party manufacturers.

The company obtained the ISO 9001 quality control certification for its footwear production process this year. It was also awarded the State-designated Products Exempted from Quality Inspection certification in 2005, and the Xdlong brand was recognised as China's Well-known Trademark in 2006.

Xdlong believes it has become a leading sports and leisurewear company in a relatively short period of time due to its professional and experienced management team. The team has extensive knowledge and in-depth experience of the mainland sportswear industry gained from managerial experience in other major domestic and international branded sportswear companies.

Chairman and chief executive Lin Shuipan has more than 15 years of experience in the sports and leisurewear industry and has been responsible for overall strategic direction, management and operations since the company's inception. Mr Lin is also the former vice-president of the Jinjiang Footwear Manufacturing Association and former executive director of the Jinjiang Chendai Chamber of Commerce.

Experienced mid-level management and other production, design and administrative personnel at Xdlong have also contributed to the growth of the business.

In order to continue to build its market share and profitability, Xdlong plans to implement several business strategies. Firstly, it aims to continue to widen its leading market positions in regional markets, and further expand its national sales distribution network and market share on the mainland.

It also plans to expand the Xdlong sales distribution network in order to continue to increase its market share in China and to leverage the growth in demand for sports and leisurewear products. It has one of the largest sales distribution networks in southwestern and northeastern China, and it plans to further increase its presence by opening additional Xdlong retail stores.

It also aims to expand national coverage and penetrate new regions, including Beijing, Guangzhou and other provincial capitals and major cities. The plan is to expand the geographical coverage of the company's existing distributors, and engage new distributors who have a strong network and solid experience in such regions.

The company is also focusing on increasing the number of its large-scale retail stores of about 100 square metres. These stores carry a wider range of products and enhance the company profile and recognition of its brand.

Management is another key area of focus for the brand. The firm plans to set up a point-of-sales information management system to enhance monitoring of the performance of its distributors, including sales performance and inventory data at retail stores.

It will continue to train shop employees to improve their customer service and product knowledge.

The company aims to identify locations for the establishment of new Xdlong retail stores, facilitated through renovation subsidies.

The company will also expand its business through the acquisition of distributors in different regions in China. This will allow Xdlong to leverage the retail expertise of its distributors while retaining direct control of operations.

The company also aims to launch new marketing initiatives, implement control and reporting systems, control inventory, achieve performance targets and obtain direct feedback from our customers.

Xdlong's plan to acquire distributors is a long-term strategy. The company intends to use the existing resources of distributors and their sales distribution networks after acquisition. All Xdlong retail stores, whether new or existing and self-owned or third-party managed, will be subject to equal treatment, and to the same policies and restrictions.

To further improve their products, Xdlong will continue to strengthen its product design and research and development efforts. It will continue to leverage its exclusive collaborations with external institutions such as the China Institute of Sport Science as well as invest further in joint research and development initiatives with a mission to enhance the performance and technology of products.

The company plans to launch its first foot-shape measuring device at certain stores, which will enable consumers to choose the type of footwear that will best suit their individual foot shape.

Xdlong will also continue to work with suppliers to improve the materials used in footwear production to enhance the comfort level of products, including lighter, more durable soles and more shock absorbing and breathable materials.

The company is developing cold-climate cross-country footwear and running footwear with built-in pedometers with the China Institute of Sport Science.