External challenges
Over the years, the landscape of China’s footwear exports has shifted noticeably. In 2001, exports to the U.S. accounted for almost half of all exports, however this share had dwindled to 23 percent by 2022 amid escalating tensions between the two countries. Although the U.S. maintained its position as the largest importer of Chinese-made shoes, China’s footwear export distribution had diversified.China’s footwear manufacturing has also undergone significant changes. Due to the rising labor cost in China, leading footwear companies such as Nike and adidas have turned to other Asian countries with lower labor costs for footwear manufacturing. However, those countries are highly dependent on raw material imports. On the contrary, thanks to easy access to raw materials, components, and logistics services, as well as continuous investment in research and development (R&D), China has not only established a robust supply chain ecosystem, but also developed innovative and competitive materials.
Internal opportunities
China has one of the largest footwear markets in the world. Domestic sales of footwear have experienced fluctuation recently but have consistently remained above 400 billion yuan. Textile and other footwear constituted the most prominent segment in terms of sales revenue, while sneakers and athletic shoes are steadily gaining significance.Most of the market leaders were in the sportswear sector, with global giants holding the top positions for quite a long time. Nike and adidas were renowned among consumers for the high quality and multi-functionality of their products. However, homegrown brands have narrowed the quality gap with international brands in the previous years and shifted their investment focus from advertisement to research and development, aiming to persuade consumers with unique and innovative products at an attractive price point. Leading domestic brands such as ANTA and Li Ning have increasingly gained traction in the market.
For Chinese consumers, quality and product style were the primary factors in selecting shoes and apparel. With growing confidence in their own culture, China-chic has been gaining popularity. To attract consumers, various footwear brands have integrated elements reflecting traditional Chinese culture into their products. Notably, despite e-commerce’s presence in the footwear sector, Chinese consumers still leaned towards buying shoes from physical stores.
