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Winter not over for sportswear industry in SE China

(People's Daily Online)    08:28, April 18, 2014
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Photo taken on April 11, 2014 shows sports shoes and clothing on sale on Yangguan Road in the busiest downtown area of Jinjiang. (Photo/Xinhua)

If you go to Jinjiang now, you'll see that almost every sportswear store is giving substantial discounts to promote sales. Located in the southeastern part of Fujian province, the largest sportswear industrial cluster in China is facing enormous pressure from high volume inventory at present. Quick expansion and production acceleration of the industry prior to and after the 2008 Beijing Olympic Games haven't been matched with increased demand. Multiple factors, including changed economic situation and consumer preferences, have led to a slow turnover of stock in the industry.

According to the annual reports of Hong Kong listed sportswear companies based in Jinjiang, Anta, Peak, 361°, and Xtep respectively carry stocks worth of 689, 366, 409, 537 million yuan. Piled-up inventories have forced the companies to close stores that are unable to make profits. Meanwhile, companies have also resorted to e-commerce, massive discounts to release stock pressure. Business insiders believe such measures may address the overstock problem but will also squeeze profit margins for small and medium-sized companies and further intensify competition within the industry.

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(Editor:SunZhao、Liang Jun)

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