The company also supplied the competition uniforms for some of the teams.

'The domestic market is full of uncertainties this year, but the overseas market offers better opportunities. Sponsoring foreign teams will help boost our international profile, especially in the markets we plan to tap into,' company founder and chairman Xu Jingnan said.

Another Chinese sportswear retailer, 361 Degrees, sealed deals with the Olympic committees of Belorussia, Croatia, and three other countries, to provide uniforms for committee members. The Erke Group, meanwhile, is the sponsor for the Olympic national delegates of South Africa, Iran and Uzbekistan.

In contrast, Li Ning and Anta, the country's two biggest local sportswear retailers, have focused more on Chinese teams. Li Ning has provided competition uniforms for the Chinese shooting, gymnastics, table tennis, badminton and diving teams; while all the Chinese athletes will wear Anta's jackets when receiving medals on the winners' podium.

Zhu Chenye, vice-president of 361 Degrees, told the China Enterprise Post that no clothing maker would consider missing the exposure offered by the Olympics - no matter how high the sponsorship cost. 361 Degrees did not disclose how much it spent on Olympic sponsorship deals.

'The teams and athletes you sponsor this year will be very likely to decide what partners you are going to work with at the next Olympic Games,' Zhu was quoted by the newspaper as saying.

At home, the sportswear industry is enduring a serious contraction of sales and investment after years of overexpansion.

Between 2007 and 2009, domestic sportswear makers China Dongxiang, Anta, 361 Degrees, Peak Sport, and Xtep listed on the Hong Kong Stock Exchange. All initially showed strong growth momentum, reporting annual sales growth of above 30 per cent, driven by aggressive shop openings across the nation.

By the end of December last year each of the companies already had 7,000 to 9,000 shops or counters in the local market, more than the combined shop numbers of fast food chains KFC and McDonald's.

'This market is seriously over expanded,' Joshua Lu, an analyst for US investment bank Goldman Sachs (Asia), said. 'Consumers may go to eat at McDonald's once a week, but do you think they will buy a T-shirt or a pair of running shoes so often?'

The turning point in the market came in 2010 when most of the suppliers, including global brands Adidas and Nike, were left holding unsold inventory and began to offer deep discounts to clear stock. But the discounts did little, with consumer demand remaining slack due to the weakening economy.

In recent weeks Li Ning, Peak Sport, and leisure sportswear retailer China Dongxiang, have all issued profit warnings to the stock exchange and forecast declines in sales compared to a year earlier. Even Adidas and Nike have felt the chill.

Sensing that a domestic recovery will be slow in coming, some local sportswear makers are turning to overseas markets.

Xu Jingnan, of Peak Sport, said his company had established a good reputation and sales network in the Middle East since sponsoring three Olympic delegates from the region - Iraq, Lebanon and Cyprus - at the Beijing Olympics. The company plans to open outlets in 100 countries and is aiming for 10 billion yuan (HK$12.26 billion) in overseas sales within a decade.

'Outsiders think the cost of conquering foreign markets must be very high. Actually, it isn't. When you have more choices, you can always take the best one with a lower price,' Xu said.

30%

Several mainland sportswear retailers showed this level of annual growth after listing in Hong Kong