More Stores Should Boost Sales for Yue YuenMore Stores Should Boost Sales for Yue Yuen

Domestic brands are closing the gap on the brand giants such as Nike and Adidas in China;

There is still a lot of possible potential for increased sales in China for all footwear brands.

Yue Yuen’s retail expansion is interesting as it shows that generally Chinese manufacturers are starting to understand that they can leverage their design and manufacturing expertise into branding and retailing. It is also interesting in the hyper competitive Chinese sports shoe sector where the big brands such as Nike, Adidas and Reebok are doing well but local brands are also improving their sales in terms of volumes and market share – notably domestic sports brand Li Ning. Additionally interesting is the fact that brands like Li Ning are increasingly edging their prices up while still competing closely with the likes of Nike and Adidas.

Yue Yuen will profit from both ends of the spectrum – selling more shoes for foreign brands through outlets such as its Reebok stores but also selling them and their own designs through their own YY Sports outlets.

Shoes and footwear is one of the last sectors of China’s retail market to become organized and dominated by chain retailers – at the moment the vast majority of shoes are sold through independents and small scale retailers. This is changing and Yue Yuen is perhaps the most graphic example of that in sports footwear.

China is becoming a better-shod nation but hasn’t quite reached US level yet. Americans still buy far more pairs of shoes annually.

• Chinese annual per capita shoe purchases - 1.6 pairs;
• Japanese annual per capita shoe purchases - 3.1 pairs
• USA annual per capita shoe purchases - 7.4.

Shoes sales in China are growing. Sales are expected to be up 57% in 2010 over 2005 – but that’s still just 2.2 pairs of shoes per capita.