SPORTS shoes wholesaler Fortei Holdings has joined in the race to satisfy China's consumer boom.
Fortei is neither a manufacturer nor a retailer, but a sole distributor of its wide range of own-brand products. The company designs sports and leather shoes, and casual wear, but manufacturing is subcontracted to makers in South Korea, Italy, China and Thailand.
Unlike Silver Eagle or Giordano, the company does not have high factory overheads and can tightly control product quality by outside sourcing. As management's expertise lies in sporting goods wholesaling, Fortei avoids direct involvement in retailing in order to keep the company lean and cost-effective.
Since the Fortei brand was created in 1989, advertising expenses have increased steadily from $1.2 million in 1990 to $8 million in 1992 and $12 million in 1993.
However, promotional expenses have been kept within (four per cent of annual sales) budget. The Fortei brand is well-known in Hong Kong, Macau and southern China.
China constitutes 70 per cent of sales, with the balance between Hong Kong and Macau. In product-category terms, shoes and clothing account for 70 per cent and 29 per cent of turnover, respectively.
Fortei's major competitors are Morfort, Narado, Playboy, Puma, Apple Jeans and Diadora. Fortei targets the mid-priced segment with sports shoes retailing at about 470 yuan, compared with 1,000 yuan for Korean-made Nike shoes.