As an aspiring global brand, Anta still has a long way to go. But the company plans to fund expansion with an initial public offering later this year in Hong Kong and is taking its first marketing steps. Almost a year ago, Samuel Xu joined Anta as marketing director after client-service jobs at several international ad agencies, most recently Anta's agency, Grey. Mr. Xu, 32, held a review and switched Anta's business to JWT, Nike's agency in China until a 2005 move to Wieden & Kennedy.
Like many local manufacturers, Anta's stronghold is not China's first-tier cities. In Beijing, Shanghai and Guangzhou, its homegrown brand pales next to sophisticated foreign brands and even Li Ning, a leading Chinese sportswear marketer.
"Nike and Adidas have a competitive advantage in tier-one cities," said Mr. Xu, who is based at Anta headquarters in JinJiang, Fujian, a hardscrabble province with a strong manufacturing base. "So we focus on tier-two and tier-three cities."
These aren't small markets. More than 150 million Chinese teenagers and young adults live in tier-two and -three cities, which often have populations of more than 5 million. Anta is a strong contender in such cities. In general, China's local manufacturers in categories ranging from sneakers to soft drinks have stronger distribution networks in these cities, as well as lower prices and a better understanding of China's cultural nuances and complex retail market.
Anta, which means "safe step" in Chinese, is no exception. Founded as a factory in 1991, Anta has turned its substantial head start in second- and third-tier cities into a leadership position. The company sells its products in more than 4,000 retail outlets across the country. Market-share estimates are unreliable, but Anta is regarded as the leading local player based on volume of shoe sales, although Li Ning is still the top local brand in apparel sales.
Anta's sales were about $250 million in 2005, split mostly between sports shoes (55%) and clothing (40%), according to Xinhua, the state-run news agency.
While strong distribution and low prices are the backbone of Anta's growth, branding has been weak. Until recently, "Anta's brand was minimally above having no brand at all," said P.T. Black, a partner at Shanghai-based youth marketing consultancy Jigsaw. "This is not a comfortable place to be."
To better compete, Anta is investing in marketing and product development and fine-tuning distribution and production. Anta spent $4.7 million on R&D last year, leading to products such as A-Cool, a line of breathable, moisture-absorbing running shoes and apparel Anta is promoting in a big TV, print and online campaign by JWT that broke in late March.
"Globally, there are two famous brands -- Nike and Adidas -- and behind them are two strong sports countries -- the U.S. and Germany," Mr. Xu said. Like many Chinese, he sees parallels between the aims of his company and his country. "Our vision is to be a top-10 global brand. We believe that if a brand really wants to be bigger and stronger, the country behind you is very important. Like our brand, Chinese athletes all come from poor families in the countryside, but they work hard and have made achievements."
The company also believes a public listing will help it upgrade operating and management systems to international standards and improve access to overseas markets. Anta already sells elsewhere in Asia, such as Singapore, the Philippines and Malaysia, and in Eastern Europe. About 10% of Anta's sales are outside China.
"We're looking to eventually acquire an existing Western brand," he said. "That's an easy way to go overseas. But our strategy is to grow first in Asian countries ... which have a similar culture, and they don't have existing tier-two brands to compete with."