Xiaomi founder Lei Jun’s endorsement, nationalistic fervour lift sales of Chinese sportswear firm Hongxing

Sales of Hongxing Erke on JD.com soared as flood donations earned it goodwill
Xiaomi’s founder Lei Jun posted a photo of himself wearing Erke trainers in unexpected boost to public image

Li Ning

Iris Ouyang

Published: 7:30am, 27 Jul 2021

Why you can trust SCMP

Chinese consumers emptied the inventory of China Hongxing Sports after it donated cash and goods to victims of floods in central Henan province, earning goodwill and an unexpected endorsement from smartphone billionaire Lei Jun.

The sportswear maker donated 50 million yuan (US$7.7 million) to join scores of companies and billionaires to support efforts to rescue and alleviate the crisis, which killed at least 63 people and affected more than 11 million in the province.

The combined effects of Typhoon In-fa and an area of high pressure in the Pacific generated unprecedented rainfall that caused the deadly floods in Henan, affecting the facilities managed by some of the nation’s biggest companies including Muyuan Foods, Shuanghui Investment and Apple assembler Hon Hai Precision.

Sales of Erke, its flagship brand of sportswear, soared 52 times to around 6.3 million yuan on an e-commerce platform managed by JD.com on Friday. The company is filling new orders based on pre-bookings as stock depleted, while its live-streaming channel drew as many as 1.7 million viewers.

Hongxing Erke’s live-streaming channel drew as many as 1.7 million viewers last week. Photo: Handout

The jump in online sales mirrors the rally in domestic brands when patriotism drove consumers to buy home-grown products, such as Li Ning and Anta Sports Products, lifting their stock prices while boycotting foreign brands, in reaction to US sanctions over Xinjiang-produced cotton and other bilateral trade issues with Western countries.

Shares of Chinese apparel and footwear makers are among the best performers in Hong Kong this year in the midst of tech sector sell-off. 361 Degrees has more than tripled, Xtep International almost doubled while Li Ning and Anta surged by as much as 58 per cent.

China Hongxing, however, will enjoy none of that benefit in the stock market. The Xiamen, Fujian-based firm was delisted from the Singapore stock exchange in October last year. Its last-reported results showed losses widened 34 per cent to 600,000 yuan in the six months to June 2020.

Still, the company’s donation to flood victims is winning admirers. Lei Jun, the founder of China’s biggest smartphone maker Xiaomi Corp, handed the company a surprise boost when he posted a photo of himself on Monday wearing Erke trainers on Weibo, China’s version of Twitter.

Meanwhile, the online rush for its products has crashed its delivery systems, the company said in a statement on Sunday. Its existing capacity was not sufficient to cope with the sudden acceleration in demand, while cautioning buyers to “consume rationally” despite their good intentions.