2.
Abstract
...................................................................................................................................................................
3
Introduction
..........................................................................................................................................................
4
History
of
skate
culture
....................................................................................................................................
5
Shanghainese
Street
Culture
.....................................................................................................................
5
Presentation
of
the
brand
ER
Souliers
de
Skate
...............................................................................
5
About
ER:
Le
Skate
Parle
Français
.....................................................................................................
5
Founder
and
designer
Eugène
Riconneaus
...................................................................................
6
International
presence
...........................................................................................................................
6
Distribution
channels
/
retailers
........................................................................................................
6
Chinese
market
analysis
.................................................................................................................................
7
Industry
description
.....................................................................................................................................
7
Target
market
..................................................................................................................................................
8
ER
Customer
profile
....................................................................................................................................
8
ER
Competitors
...............................................................................................................................................
9
Competitive
analysis
(SWOT)
................................................................................................................
10
SWOT
matrix
............................................................................................................................................
11
Possible
retailers
in
Shanghai
...............................................................................................................
11
PESTEL
analysis
for
the
Chinese
market
.....................
Erreur
!
Le
signet
n’est
pas
défini.
Methodology
......................................................................................................................................................
14
Results
..................................................................................................................................................................
16
Qualitative
analysis
....................................................................................................................................
16
Skate
recognition
in
China
/
Shanghai
..........................................................................................
16
Skate
community
in
China
/
Shanghai
..........................................................................................
16
Typical
customer
....................................................................................................................................
16
Promoting
skateboarding
in
China
/
Shanghai
.........................................................................
16
Entering
Chinese
market
....................................................................................................................
17
Quantitative
analysis
.................................................................................................................................
17
Discussion
...........................................................................................................................................................
19
Conclusion
...........................................................................................................................................................
20
Annexes
................................................................................................................................................................
22
3.
Abstract
The purpose of the paper is to investigate the opportunities represented by the Chinese market
for street wear and skate culture-related products to evaluate the feasibility of implementing a
skate shoes brand from France recently internationalizing.
The paper is based on theory and relies on in-depth interviews with shops owners specialized
in the skate industry, people involved in the shangainese scene (qualitative method) and
surveys about consumer behavior (quantitative method).
The findings revealed the existing difficulties for a small foreign brand to penetrate the niche
market of street wear and skateboarding. Indeed, this market is currently extremely small and
is dominated by a few number of players represented by worldly recognized sport brands.
China seems very late compared to its neighbors concerning the existing street culture.
However, this paper shed light on the future opportunities that will begin to emerge in the next
few years.
The paper will include concrete recommendations for an existing brand which is currently
aiming at developing itself in new markets.
- How is it possible to educate Chinese consumers about the skateboarding culture?
This research question seems crucial as the interviews of skate shops employees revealed
that there is a deep lack of knowledge about this sport and its culture coming from Chinese
consumers. Currently, most of Chinese do not know anything about skateboarding at all and
most of them do not see any difference between skate shoes and regular shoes.
- How is it possible as a small brand to compete with huge existing brands on the
market?
Huge brands such as Nike or Adidas are already well established on the Chinese market. They
have gigantic communication and marketing budgets so it is easier for them to gain recognition
from the Chinese consumers. This question allowed me to study the feasibility of a partnership
through joint venture with a Chinese brand or simply collaboration.
- What strategy should ER Souliers de Skate pursue to sell its products in China?
The Chinese skate market is extremely recent and the skate culture is not implemented yet so
Shanghai has a very small choice of possible retailers.
4. Introduction
For this particular project, I was interested in studying the development of street wear and
skate culture in China, especially in Shanghai. To do so, I have chosen to work closely with a
French existing brand called ER Souliers de Skate. This brand is already present in seven
countries including the United States, Japan and France. I would like to study the feasibility of
market expansion in China and communicate these results to M. Eugène Riconneaus in order
for him to gain insights about Chinese market: the opportunities and the threats rising from it.
It is highly interesting to study if the brand would be able to penetrate the Chinese street wear
market as China presents huge growth opportunities since the last few years. Indeed, China
is a country that has seen dramatic increases in the living standards of its population with the
country’s integration and progressive trade openness within the world-globalized market.
Chinese population being the largest on Earth, it is crucial for foreign firms to understand the
market and its key drivers as the Chinese purchasing power is constantly rising. Consumption,
product availability and disposable income are all constantly increasing. However, despite the
strength of these indicators, those looking to introduce their products must do so with a firm
understanding of the market dynamics and the potential risk of entering this market.
With this globalization and economic development, Chinese consumer behavior has also
evolved throughout the years. Chinese consumers are increasingly interested in Western
products and lifestyle.
Skateboarding is present in China since 1986. At this time, there was not even a word in
Chinese language for skateboarding. However, Chinese people soon showed some interest in
this sport and the lifestyle attached to it. However, skateboarding infrastructures began to
develop very slowly and street culture was seen as contradictory to the traditional Chinese
culture. For these reasons, skate culture was and is still nowadays slowly developing
compared to its neighbors such as Korea, Japan and Hong Kong. China counts about 50,000
skaters and I believe that this figure will continue to evolve.
To conduct this deep study about skate culture in China, the history of skate culture worldwide
will be discussed first, then a presentation of the French brand I decided to work with: ER
Souliers de Skate. The literature review will consist of a deep analysis of the market: the
opportunities and threats, the market environment, the targeted customers, the possible
retailers in Shanghai and the competition. The last parts will consist of a presentation of the
methodology and a discussion of the results obtained before giving the final conclusion on the
topic.
5. History
of
skate
culture
Shanghainese
Street
Culture
After 5 months of study and visits in Shanghai I have been able to get an idea quite accurate
of Shanghainese Skate/Street wear culture and more generally about Chinese Street Culture
(Honk Kong, Taiwan excluded).
Underground culture and sports such as skateboarding take time to grow. Skateboarding
culture was born in the United States around the 1950s when surfers in California wanted
something to do when waves were flat. This new sport arrived in Europe in the 80s and now
is slowly coming to China under a strong USA brand influence. Nevertheless, even if
skateboarding and underground culture is bigger and more profitable in Western countries with
multinational brands such as Nike or Adidas creating special collections for skateboarders;;
Mainland China seems pretty hard to enter.
From my observations, Shanghai is late compared to his neighbors Seoul or Tokyo. Only a
very few shops share this pretty confidential market for the moment. However more and more
skateboarding infrastructures are being built, proof that many private companies already invest
forecasting a boom on this market. Even if Chinese youngsters are strongly influenced by
western trends, the phenomenon tends to be late to explode and get credibility and
acknowledgment among Chinese consumers.
Presentation
of
the
brand
ER
Souliers
de
Skate
About
ER:
Le
Skate
Parle
Français
Established in summer 2013, ER Souliers de skate also known as ER Skate is the only French
independent skateboarding and lifestyle shoes brand. Taking its inspiration from the French
and Parisian downtown street culture, the brand perpetuates the values and stories of the
French skateboarders, rebels, artists and urban-poet in different cities across the world.
Throughout each collection and collaboration, ER gathers a diverse mix of music, style and art
made in France to create its unique community and lifestyle.
6. Founder
and
designer
Eugène
Riconneaus
Eugène Riconneaus is a 25 years old lady shoes designer seen as one of the most promising
boot maker. He learned his know-how with famous craftsmen such as J. Lobb and crafted
shoes for world renown celebrities. He collaborated with brands such as Colette, Anne Valérie
Hash, Paraboot, BMW or Mercedes-Benz and his brand Eugène Riconneaus is present
worldwide. This fast and promising success allowed him to create another brand more
accessible and lifestyle-oriented, ER Skate.
International
presence
Thanks to Eugene Riconneaus's work with his fashion luxury brand and his network, ER Skate,
after only two years is present in 7 countries, France (70 retailers), Belgium (6), Hong Kong
(3), USA (2), Canada (1), South Korea (pendent), Japan (10).
Distribution
channels
/
retailers
Concerning the distribution channels, ER shoes are distributed through Internet and retail
shops. For the moment they have a website but no official online shop and are using retailer
websites such as Nozbone (FR), Hypebeast (HK) or Eastdane (USA). Among their retailers,
ER Skate benefits from prestigious showcases worldwide such as the Nozbone skate shop in
Paris, the Supreme shop in New York or the Urban Research in Tokyo. As a young brand with
limited financial capacities using retail and online shops is the most common and practical way
to gain visibility and enter new markets. It allows ER to reach a wider audience and to get
associated with other already well-known brands present in the shop. Nevertheless the
7. retailing channel induces a significant loss of profit margin as high street retailers take at least
50% of the final consumer price.
Chinese
market
analysis
In addition of the field investigation done by visiting skate shops, skate parks and interviewing
active members of the Chinese skate community, an important part of the research was
secondary data analysis based on several articles found on the Internet.
The literature review, despite it was light helped understanding better the Chinese skate scene
and conduct a precise market analysis. With this market analysis based on my own research,
I analyze the feasibility of implementing ER brand in China. The analysis focus more on
Shanghai where Skate is expanding at a high speed with main events like X Games China or
massive skate infrastructure like SMP Skate Park.
Industry description
The skate industry in China is at a growing phase. The recent development of skateboard as
a sport, but also as a part of the Chinese rising underground culture, is the result of almost a
20 years process.
Today, the skate industry in China is way more developed that the practice of the sport itself.
Chinese skateboard manufacturers started to develop soon after the first American skaters
introduced skate in China. China offers many opportunities to the skate industry because of
the low cost of raw materials and labor forces but the practice of skate struggles to conquer
the Chinese population.
However, according to professional skateboarder Johnny Tang, cities like Shanghai have a
real potential for skaters1
.
Pro skateboarders from all around the world start to get interested in China and big cities like
Shanghai or Shenzhen, where rapid urbanization has created a huge playground for street
skateboarding.2
SMP Shanghai is the biggest skate park in the world but knows a very low frequentation level
compared to major skate parks in United States or Europe.
1
Irving, Sean, Geckos Adventures Presents An Exploration Of City’s Thriving Skate Scene. Acclaim Mag. Available at:
http://www.acclaimmag.com/lifestyle/skate-shanghai/
2
Poythress, Cullen, 2010, China’s Domestic Skate Market. Transworld Business. Available at:
http://business.transworld.net/38003/features/chinas-domestic-skateboard-market/
8. To get people involved and bring more crowds into the Chinese skate scene, Shanghai’s skate
park like The Place organizes contests almost every week with free entrance to the public and
free eat and drinks.
At the moment, major actors in the skate industry in China are global brands like Nike, Adidas
or Vans and most of the players come from the United States. These big brands coming from
the U.S, as they have their own production plant directly in China, benefit from a consequent
cost advantage on external players producing abroad.
As a Fly skateshop manager told me, the skate industry in China is very close and everyone
knows each other. Shanghai skate community consist of a small amount of actors gathered
around the same passion and sharing the same values coming from street culture. The small
size of the community facilitates recognition among skaters, shops owners' and all the players
of the industry.
Target market
In order to know if ER Souliers de Skate’s implementation into the Chinese skate shoes market
would benefit for the brand, a target market analysis has to be done.
The Chinese skate shoes market is mainly composed of international brands because of the
slow development of local Chinese brands. Almost no local brand has emerged on the skate
shoe market. Local boards manufacturers started to sell cheap boards in the mid 2000’s but
regarding the skate clothing industry no Chinese (Mainland) brand is really well known.
ER Customer profile
The customer profile of ER Skate shoes is mainly determined by the high quality of ER
products. ER Skate shoes are made in Europe, designed in France products, a logical
explanation to the price slightly above its competitors on the core skateboarding market.
The Chinese street wear customer profile is segmented in different sub categories of customer
coming from music, dance, art, extreme sports or simply fashionistas. Skate shoes belong to
a niche market for the moment because of the low number of people interested in
skateboarding but this phenomenon tends to reverse and a much wider range of customer is
buying skate shoes.
In Shanghai, people buying skate shoes are “young rich Chinese fans of street wear looking
for cool shoes” according to Fly salesman. The others frequent customers of Fly skate shop
are foreigners practicing skateboarding or at least interested in the sport. Shanghai’s expat
community is high and a good part of this community is composed of international students
9. doing universities exchange. As the sport is much more developed in western countries, a
good part of Shanghai’ skater community is composed of expatriates.
According to all the skate shops owners' I talked to, both target groups represent each 50% of
Their loyal customers3
.
The fashionable aspect of ER shoes gives another dimension to its products, as they will not
only be purchase for skating but also as fashion shoes.
This dimension of fashion in skateboarding is very important to understand in China as most
of the Chinese customers buy for the brand, for the shape and don't know about its first utility.
ER Competitors
Chinese market, in terms of street wear is very important because of the western influence on
Chinese mindsets. The leaders of street wear in China are American global brands. Nike, Vans
and Adidas figures on the top of the Chinese street wear market in terms of sales figures. This
success is due to a global expansion of the brands into the Chinese market in the early 2000’s.
The skate footwear market is very specific branch of the street wear market. Nike and Adidas,
the two main actors on this market, have developed special brands for the skateboard industry.
Nike SB:
Nike Sb is the brand of Nike group for all Nike products related to skateboards. Nike launched
Nike Sb in 2002 to enter the skate industry and entered the Chinese market in 2004. Their
range of products goes from all kinds of clothes, accessories or skate shoes. Nike Sb’s
products are available to purchase in all Nike’s stores, in skate shops and in Nike Sb website.
Nike is one of the most important brands in footwear industry. They have factories in several
Asian countries resulting in a significant competitive advantage for them on the Chinese
market.
Adidas Skateboarding:
Adidas skateboarding is another big player on the Chinese skate industry. Their products are
available in all Adidas stores, in most of Chinese skate shops and on Adidas official website.
Adidas has factories in Asia and cut costs with economies of scale due to their mass
production.
3
Interview of Fly Skate Shop employee
10. Vans:
Vans has been in China since 2008 and currently have more than 400 point of sales. 4
Vans
used to be number one in the skate industry before Nike had a huge success. Vans also have
factories around Asia to produce mass quantities at a very low price.
ER faces a very strong competition already implemented on the Chinese skate market. Global
brands like Nike or Adidas have several advantages including the facts that they produce
locally millions of shoes every year and that they are well recognized in Chinese mindsets.
Apart from these three leaders remain several brands coming from the United States for most
of them such as HUF, Diamond, Trasher, DGK, Lakai or És.
In terms of pricing, ER price positioning is above its direct competitor’s prices. The average
price for skate shoes in Shanghai ranges from 300 CNY up to 700 CNY depending on the
model and the brand. ER shoes are sold around 700 CNY (100 euros) in France. Taking into
consideration all the sides costs such as duties, cost of transportation and the retailer margin;;
the shoes could not be sold under 850 CNY (120 euros).
Competitive analysis (SWOT)
Implementing a brand in a foreign country requires a full study of the entering market. I decided
to elaborate a SWOT analysis in order to have a concrete opinion about the implementation of
ER Skate shoes in China. Strengths and weaknesses or both internal and specific to the
company whereas opportunities and threats are external factors. The challenge here is to
maximize your strengths and minimize your weaknesses in order to take the most of
opportunities and leverage and manage threats and uncertainty.
4
Wod, Philana, 2014, Skater Goes Chic in China: Vans Taps Into Chinese Creative Class. Jing Daily. Available at:
https://jingdaily.com/skater-goes-chic-in-china-vans-taps-into-chinese-creative-class/
11. SWOT matrix
Strengths Weaknesses
- French Design
- Influential designer
- Every year Collaborations
- Brand already implemented in Asian neighbors
- High quality product
- High price for the medium Chinese
- Unknown brand in China
- No full time partner or agent on site (extremely
important to build relationships "Guanxi")
- Very few possible retailers
Opportunities Threats
- Growth of Chinese skateboarding and street
wear market
- Growth of Chinese interest in this culture
- Very low market penetration (few players /
market not saturated)
- Building relationship is easy
- Product endorsement / sponsoring possibilities
- Skateboarding infrastructures attracting pros
from all around the world
- Brand reputation of competitors
- Small Chinese skate community
- Bad reputation of skateboarding among the
Chinese population (one child policy)
- Chinese market is difficult to penetrate
- Transportation costs, taxes, import duties
rising the final price of the shoes.
Possible retailers in Shanghai
The first researches pointed out five potential ER retailers. During this first research I have
been focusing on core skateboarding and selecting only skate shops.
• ICONX:
This skate shop is the best referenced on
Internet despite its location in a low frequented
district. IconX owners are very active in the
skate scene in Shanghai, they organize events
almost every week I order to bring everyone
into this new sport. The shop itself looks like a
very classic skate shop. There is a pretty low
involvement in the design of the place, the
brand selection is really mainstream and pretty
outdated which does not really match with the high quality and fashionable aspect of ER
Shoes. This skate shop could be a good retailer for ER Skate shoes thanks to its huge
12. implication in Shanghai’s skate scene but the lower price range and the "outdated" associated
brands are significant threats.
• Avenue & Son:
Avenue & Son is a brand new shop with a very intimate atmosphere. It is very well located and
the owner is the co-founder of Hélas, the only French Street-wear brand implemented in
Shanghai. Unfortunately they don't sell skate shoes for the moment but they could get into this
market in a few and appear as a perfect retailers for ER.
• The Place (Top Toys skate park):
The place is a skate shop located at the heart of a sport complex including a skate park. It
gathers many brands such as HUF or Nike and are only working with Lakai and Vans as shoes
suppliers.
The location of the skate shop could be perfect for ER as many kids practicing not only
skateboarding pass by this place and could get interested.
13.
• Fly Shanghai:
Fly is the oldest skate shop in Shanghai founded in 1999 and is considered as the pioneer in
the industry. Now, thanks to four skateshops all over China (Shanghai, Beijing, Zheng Zhou
and Cheng Du) Fly became an important brand. The shop is located at the heart of the French
concession, the location is perfect for the target group of ER Skate as it is a very cosmopolitan
district with lots of foreigners and Chinese from the upper middle class.
• Ollie Free:
Ollie Free is a brand new skateshop also located in the hearth of the French concession. They
present the same advantages as Fly in terms of location and brand. The range of prices totally
fits with ER Skate shoes premium pricing. The staff members all belong to the Shanghai’s
skate scene and are active skaters.
14. Methodology
For this study, the main purpose was to concentrate on the research aspect of the work. To
know if the project will be realizable, I needed to do a lot of research in order to learn more
about the consumer’s behavior, the skate industry in general and the Chinese industry more
precisely.
To begin, I had to ask myself “what is research?”. Research is to go beyond personal
experience, thoughts, feelings and opinions that do not refer to other sources of information.
Some research works required to go beyond personal knowledge and experience to find and
learn more about new subjects. The research is used to explore an idea, probe an issue or
solve a problem.
The primary research-study consists in the analyze of a subject through first hand observation
and investigation such as the analysis of a work place, the conduct of a survey or an interview
and also analysis of text, articles or films. The primary sources of information include statistical
data, historical data and works on the subject studied. For the primary research study, I went
to specialized stores all around Shanghai. The different shops have been elected regarding
their activity, location, the brand proposed and their infrastructure. I visited five shops in total
that were related to skate culture, selling skate products and street wear clothes. A survey has
been realized and shared on groups related to skate such as Wechat groups, Facebook pages
and other social media platforms. The skate community is very restricted and closed in
Shanghai so it was quite hard to find the right place and people to answer to our survey. We
wanted that only people who can be interested in skate or street culture answer the survey to
have pertinent datas.
Moreover, I have been to skate parks, skate shops and street wear shops to interview some
of the skaters and workers that were able to speak English in order to understand better how
is the skate culture here in China, and especially in Shanghai. These interviews are face-to-
face interviews and are parts of the one to one and non-standardized interviews. These
interviews were the most profitable and interesting for me because the speakers knew a lot
about the skate culture.
Then we also read a lot of articles on Internet talking about the subject and the skate culture.
We found particularly an interesting study on the Chinese Market made by a US brand that
confirmed the fact that China is very limited in terms of sales channels because they are less
than 100 skate shops in China.
The primary research study was very benefit for us because it has helped us to have a more
complete understanding and overview of the Chinese market.
15. Concerning our secondary research-study, we used the survey, the interviews and the shops
to analyze the market in China. Indeed, all the information recorded during the primary
research-study was very useful to draw some conclusions. We have collected some
quantitative data due to our survey and qualitative data thanks to our interviews and store
analysis.
16. Results
The research and interviews of local actors gave me a more precise idea about the Chinese
skate culture, its forecast evolution and what has to be done in order to succeed on this new
market.
Qualitative analysis
Skate recognition in China / Shanghai
Skateboarding is seen as a Western dangerous sport and suffers from a bad image among
the major part of the population. The one child policy emphasizes the attention on the child.
“Elders are much more watchful regarding their kid activities. Chinese parents see
skateboarders falling all the time, get injured. Skateboarding appears more as a Westerner
entertainment” reports Free. He sees “Chinese culture and the street and the skateboarding
culture as very different” saying that there is a “big gap between both of them”.
Skate community in China / Shanghai
When talking about skate community in China, a single word comes along with all the
interviewees “small”. The Chinese community is very closed with the same people knowing
everyone. According to Eden (Fly Skate shop) this small group of people has at least one
advantage “if you make an impression here, everyone will notice it”.
Typical customer
Typical customers visiting skate shops in Shanghai are half Asian, half foreigner aged between
18 and 25 years old. A significant part of them are students or professionals in relation in a
way or another with street culture (dancers, djs, musicians). In shops such as Ollie Free or
Avenue and Sons customers purchasing power is pretty low and they dedicate 500 CNY on
average for a pair of shoes whereas in Fly the typical customer is a 30 years old Chinese male
or 30 years old Chinese female looking for cool and trendy shoes. “They don't really pay
attention to the boards, they think skateboarding is cool and are loyal to big brands such as
Nike or Adidas” states Eden.
Promoting skateboarding in China / Shanghai
Promotion is a big deal for brands and local actors of the Shanghainese and Chinese scene.
The budget allowed is still limited and with such a small community of skaters the return on
17. investment of a costly promotion campaign can be risky. Chinese e-commerce is the biggest
in the world and skate manufacturers, retailers and brands understood it. All the respondents
are using Western and Chinese social medias such as Facebook, instagram weibo or wechat
to promote their activities. Apart from this, Shanghainese retailers are using different strategies
regarding their strengths. The Place for example is organizing big contest every week ends in
his skate park. They always try to invite talented local skaters and bring free beers to attract a
Chinese crowd and sensitize them to skate culture. Fly is focusing more on videos and
advertisements on their clothing lines and collaborations. Stephen co-founder of Hélas and co-
owner of Avenue and Sons skate shop in Shanghai told me that as Shanghai skate culture is
very small, promotion is very limited and huge advertising campaign are not more powerful
than a short home-made video uploaded on social medias. Eden from Fly illustrates well this
remark with an anecdote about a photo shoot they made starring a homeless people they met
on the street in front of the shop. They shot him as a model and posted the campaign on
internet which later encountered great and popular success.
Entering Chinese market
Entering a Chinese niche market for a foreign and unknown brand is very difficult. Several
advices arise from my interviews. In order to maximize the chances of success it is imperative
for the brand to understand the area, the market and the trends. Many brands come to China
with a mind-set focused on “I want to bring this here” and fail because of a lack of
understanding concerning the local culture and habits. Eden insists on the facts that
understanding Chinese is a plus and recommends to find a local partner in order to do so or
to get deeply involved on the scene. Yami, executive manager at Juice Shanghai (originated
from Hong Kong) and Free, add the importance of icons and idols while entering China. Yami’s
boss is famous in Hong Kong and in China thanks to prolific entrepreneurship moves allowing
him to create CLOT. This recognition let him bring customers into his shops even if they don’t
know about the brand “he is influential so people come to Juice thanks to my boss reputation”.
Chinese customers tend to be less cautious on the price “if they come in the store and are
looking for shoes, they already know they're going to pay a lot and they don't care”.
Quantitative analysis
The quantitative analysis’ main goal is to gather all the answers of the survey and to analyze
them by giving accurate interpretations. The survey has been shared on social networks such
as Wechat and Facebook on specific groups that gather mostly people interested in skate
culture, and street sports.
18. I have received 36 answers in total. 67% of the participants are males and i had 12 females
who answered the survey. Males are much more present than women. They are more
interested in extreme sports and more active on the scene. That can be seen during skate
events and contests.
As 75% of the participants are Chinese, analyzing the surveys allowed to understand better
the Chinese skate culture. The most represented age group is the 20-23 years old which
represents 30% of the participants. They are just followed by the 23-26 years old group (25%)
and the 18-20 years old (22%). The other age brackets are minorities and they all together
represent 22% of the answers. It seems that the generation most interested in this new skate
culture is the youngsters. Indeed, the new generation (which is between 18 and 26 years old)
feels much more appealed by Western brands and products. They are much more attracted to
Western culture and consumption patterns.
25% of the respondents practice urban sports and frequent sport infrastructures such as skate
parks. Seven participants said that they were practicing skateboarding and only two of them
practice BMX.
Through the survey, I noticed that the young generation seems to give more importance to
their style than their elders and they are not necessarily interested in urban sports.
Concerning the budget, most of the participants spend between 500 and 1500 RMB per month
for their style which is quite high for young people.
In China, the web-culture is very present especially for the new generation. The participants
buy more and more on Internet:
Indeed, 61% of them buy online (Internet, Taobao and Wechat). The sales in stores and
specialized stores do not longer represent a large way of shopping. The brands have to be
more and more present on the web to win market shares. Brands have to follow the new trend
and put more and more efforts on their online presence to attract customers. Digital marketing
is constantly increasing.
Concerning street wear, participants buy more famous brands such as Nike SB or Adidas SB.
In China, customers are oriented towards brands and they prefer to spend money on well-
known brands than on small new brands they have never heard about.
The most important criteria for them to purchase are: the brand, the design and the price.
Respondents will be ready to spend between 600 and 900 RMB for 27% of them and only
5,5% of the participants will spend more than 900 RMB for new shoes. The purchasing power
is increasing in China so consumers will be keen to spend more on consumer goods.
Moreover, with the One child policy, parents are able to spend more on their child.
19. Discussion
The researches, interviews and diverse readings allowed me to draw some conclusions and
recommendations about the possible implementation of a young foreign brand in China. As a
new segment, skate culture and street wear market is not widely covered yet and the
conclusions are mainly based on what I observed and heard from the local Shanghainese
actors. China records a constant substantial growth in every kind of sectors since 30 years.
From that exponential growth arises new trends and markets coming from West, aiming at
expanding their influence in the undisputed number one economy in the world. In order to be
efficient, brands entering China have to pay attention to various aspects regarding Chinese
customer behavior and its implications on promotion, retailing strategy or positioning. Chinese
mindset in the field of promotion is strongly influenced by icons and idols. They can be defined
as "followers". Whereas Westerners tend to look for confidential brands in order to express
their singularity, Chinese want to copy and belong to the mass. In order to gain notoriety it is
necessary for a foreign brand to take the best of sponsorship and partnership. All the
interviewees mentioned the importance of idols and the added value they bring to a brand,
mentioning the Ssur "Comme des fuckdowns" phenomenon thanks to rapper A$AP Rocky, or
the Japanese brand Comme des garçons with the artist Jean Michel Basquiat. As a really
young market with very few aficionados, the skateboarding community is pretty easy to enter.
Local talented skaters are still very few and sponsoring them appears as a good bet for the
future. The young skater to whom a brand sends some skate shoes now can become the
Chinese Tony Hawk in few years and create incredible media and financial spin offs. Guanxi
(Chinese word for "relationship"), as in any other kind of business is very important and needs
to be understood by foreign entrants. As a small community, it's easy to get noticed by the
whole scene but the real challenge comes with getting noticed by the mass market. Internet
and social medias are really popular and trending in China. In addition to its low cost, Chinese
e-commerce is an essential channel to get people aware, interested in skate culture and reach
a broader clientele. Chinese perception of skateboarding culture and street culture is still
dampened by prejudices. Skateboarding is seen as a dangerous sport and environment, and
certainly not a sport where elders would like to see their only child evolve. Thanks to some
places such as ICONX that organize skateboarding lessons in a safe place with safety
protections, more and more Shanghainese are experimenting the sport thus benefiting the
image of skateboarding. Organizing events and gathering Chinese and foreigners is another
essential point of the findings as it allows brands to reduce significantly the gap between
skateboarding and Chinese culture. Chinese customers mindsets are way different than
Westerners and despite the strong influence from the U.S, a cultural gap remains. Our online
survey underlined that only 25% of Chinese consumers of skate equipment (boards, clothing,
20. accessories) are actually practicing an extreme sport. This has to be taken into consideration
when studying the customer behavior. They have different needs, different expectations and
pay much more attention to design than comfort. The average consumers enter a Skate shop
without knowing anything about skateboarding. Skate appears as a trendy and cool western
hobby. Consumers like the spirit and the attitude but do not think of practicing and do not focus
on boards. They mainly focus on the lifestyle aspect of the shoes, on what it reflects, rather
than on its utility. This attitude of Chinese consumers towards skateboarding related products
and the limited budget of the core skaters, lead me think that concept and trendy stores would
be more pertinent in the process of choosing retailers. Its simple and classy design, combined
with its made in Europe label made me think that ER Skate shoes might be more appropriate
for high end stores where purchasing power is more important.
Conclusion
The paper gave me the opportunity to gain insights about the history of skate culture and
realize a deep analysis on the Chinese market. It highlighted that despite the increasing appeal
for Western products, brands and lifestyle, it is currently really difficult for a small foreign brand
such as ER Souliers de Skate to enter this niche market. There is a deep lack of knowledge
and awareness about skateboarding and I believe education of consumers and time are
needed. The research suggests that the process will be slow until the market will become really
profitable. The potential market is huge but not ready yet.
It is dominated by few global brands with strong recognition and considerable budgets for
marketing and communication that a small recent brand cannot possibly compete with.
However, all experts and industry professionals agree on the huge potential that the Chinese
market will represent in a few years time. This can be illustrated by the increasing amount
invested in action sport such as skateboarding infrastructures.
Therefore, several alternatives can be identified in order to enter China Mainland:
• Build partnerships through collaborations or joint ventures with already implemented
brands and get noticed among the players.
• In China ER Souliers de Skate could focus more on the fashionable lifestyle aspect
of their products and target young, urban Chinese consumers aware of their looks and
appearances by trying to sell the brand in trendy concept stores of Tier 1 cities.
Appearing as more high-end brand could be a good strategic choice as it would raise
the brand above Nike or Vans products and compete on a different market;; appearing
as High-end skate shoes.
21. • Idols are important to Chinese consumers and an interesting angle to tackle for brand
awareness would be product endorsement by local celebrities. I strongly believe that
the Chinese skate community will continue to expend steadily and that the scene will
count an increasing number of professional skaters.
22. Annexes
Juice interview transcript
Yami : 23 years old, working at Juice Shanghai.
My name is Yami, I come from Hong Kong but I live in Shanghai. I work for Juice shop since
two years
Nicolas: What do you know about skateboarding culture?
Not much
Nicolas: How would you describe the skate community in China?
Not so many people belong to the skate community in China. In Hong Kong, there are more
people
Nicolas: So, not so popular. How does your shop attract customers?
Online marketing. On Weibo for example, we can describe and post pictures of clothes and
make people know about our shop online.
Nicolas: How do you think the skate culture will evolve in the next five years in China?
In Hong Kong, the skate culture is already present and established. I think that Chinese skate
culture will develop and become as popular as in Hong Kong because in Shanghai it is already
starting to develop.
Nicolas: How do you think the Chinese market is different from HK, Korea or Japan?
Chinese consumers always look for stars, idols whereas in Korea or Japan, people wear what
they like
Nicolas: So they are less focused on what is fashion and more about expressing their
personality
Yes, they just wear what they like and love what they love
Nicolas: What advices could you give to a foreign brand willing to enter the Chinese market?
First they should know about China, learn about Chinese culture.
Nicolas: Ok, what's the typical customer here at fly?
Mostly young people that feel appealed to street fashion in general. My boss is very famous in
China also in the world and he is influential. So people come to Juice thanks to my boss’s
reputation
Nicolas: What's the average budget for one pair of shoes?
23. We have different brands of shoes here like Nike or Adidas with different range of prices. It
goes from 600 RMB to 1500 RMB in average.
Nicolas: how many other shops similar to yours? Street wear, skate shop
Nike shop or SSUR which also a street fashion shop.
Nicolas: How would a foreign brand do to reach more or less the same target customer as
Juice?
WeChat is also very important in China for online marketing but almost all of customers know
my boss so that is why they come to the shop, because of my boss’s reputation.
Fly interview transcript
Eden : My name is Eden Chen I am 23 going to be 24 this Saturday and I've been working at
fly street wear for almost a year now
Nicolas: how did you approach skateboarding culture?
Eden : Well, in the US when I was 12, I don't know I think when that's' happened I just saw
people doing it and I wanted to do the same. but in china I had to go find it, I went to Nanjing,
to go to the skate park meet people and get into the circle there.
Nicolas : Yes it's much more confidential in China
Eden : Definitely, it's also smaller, much smaller in China.
Nicolas : How would you describe the skate community in China?
Eden : In china it's very close, everyone knows each other, it's small. Whereas in America
when everything started, not everyone knows each other. It was more individuals, no one
knows another skater but they are all friends. In shanghai or in china the industry is so small
that everyone knows each other so if you make an impression here, everyone in the industry
will notice it.
Nicolas : Ok, How does Fly shop gain recognition ?
Eden : Well they have been around for about 16 years, we are one of the longest skate shops
running in China but it was a long sixteen years process. They started from bringing shoes
from the factories to here, but now after like 16 years we have good relationship with Vans and
Nike for example, we've made some collaborations and so lots of sneaker heads who really
follow shoes know that some of their famous shoes have been also collaborating with fly on
and that's kind of how we got into the international scene.
24. Nicolas : Yeah, step by step.
Eden : Step by step but it's a long 16 years step
Nicolas : How do you think the skate culture will evolve in the next five years in China?
Eden : The thing is that is so recent that it's always changing like 2 years ago before now it
was really different. 2 years ago a lot of money was invested in skateboarding everyone saw
as very possible
business venture to get into but they realize that there is no money in skateboarding so it's
really hard to make money, selling skate stuff to kids because it's really expensive like if you
get an American imported board it's probably four hundred RMB or more including shipping
and everything so the normal kid who is a skater cannot always afford that. On top of that you
have to buy skate shoes and skate shoes are really expensive and so eventually after you buy
those shoes to fuck them up... It's a very expensive process and companies like Nike who pull
out a lot of cool skate shoes they don't always appeal to the core skaters or the real
skateboarders, they more so appeal to people getting interested in street wear and skate
culture. Those people can spend that money. But maybe in five years this might change, there
is new skaters coming. hopefully in five years the young Chinese skateboarders now can..
maybe like develop their skills a lot more and in 5 years we will have different pros, different
idols for Chinese skateboarders to follow.
Nicolas: I've been to Hong Kong and I noticed it's completely different. Skate culture is more
present. So why is it not evolving so fast in HK, Korea or Japan. China seems very late.
Eden : Definitely, China is very late in that. I think HK well, HK has always been in ahead of
china because they have been way more introduced to western culture than China so they
have always had like, they have been like on the forefront with the Asian scene but I think "why
it doesn't progress as much" is... it's hard to say it's so new that, if we took this time of
progression in shanghai and compare it to how it progressed in America it would be faster
because a lot more is happening but compare to what's going on in America or in Hong Kong
is not that fast. The progression like the rate is going fast but where it is right now is not very
progressive but that will change hopefully with new pros that Chinese people will kind of like
analyze or want to follow and another thing why is not very popular it's because in Chinese
culture there is one thing, the one child policy act and so a lot of Chinese families or set up
with one child two parents and four grandparents so the elders put a lot of responsibility into
maintaining the safety of the child you know and so they see people falling everywhere, hurting
themselves, breaking bones and they don't think its good. it puts the child at risk. Let's say it
becomes an Olympic sport and for sure people will do it more.
Nicolas : Yes, you think Chinese people need to look at something to reproduce?
25. Eden : Yes they have to, basically, I feel like Hong Kong adapted its mind-set like let's do it
ourselves but china has a little bit of a mind-set like let's follow others. When something in
skateboarding changes it's when china will be like ok let's do this ourselves . I think shanghai
it's good because it's so modern, it attracts a lot of skaters here and hopefully we can have our
own style. Every place is different.
Nicolas : What advices could you give to a foreign brand willing to enter the Chinese market
Eden : One is you have to know Chinese. Well you don't have to but that helps a lot, or find a
Chinese partner. Another one is that you have to know the area. a lot of people want to come
into the market
with their own stuff but they don't know who the competitors are, they aren't into the scene so
they don't really know what's going on, they are more with the mind-set of "I want to bring this
into here"
Nicolas : business
Eden : yes, they don't know the competitors, what's going on with the big companies and their
budget right now. They don't know which skate shops are doing well and why it's different so I
think if they want o kind of like add their product in they need to find a partner who understand
that or maybe spend a year mixing with the locals.
Nicolas :Ok, what's the typical customer here at fly?
Eden : Typical customer. We have two kinds, we do have a lot of skaters like dirty skaters like
skate Rasta but they are not customers, they just chill and look which is cool they make you
feel like we are not working. But the typical customer probably be like 30 years old Chinese
male or 30 years old Chinese female looking for cool shoes. They don't really care about the
boards, they think skateboarding is cool and like Nike and Adidas. A lot of foreigners to, a lot
of foreigners but those foreigners mostly buy like our brand stuff, hats, and boards. It's like
people coming to shanghai want to support their local skate shop, they will come here maybe
buy a t-shirt or something. but also lot of foreigners like to buy shoes because they have more
spending power.
Nicolas: alright so diversified.
Eden : Yes 50/50
Nicolas : What's the average budget for one pair of shoes?
Eden : if it's a foreigner like thirty years old, they would probably spend like about 1000 RMB.
For Chinese it's the same, even more I would say. foreigners are more like, I think about it "do
I want to spend this amount for a pair of shoes?" but Chinese, if they come in the store and
are looking for shoes, they already know they're going to pay a lot and they don't care.
26. Nicolas : How many other shop similar to yours? Street wear, skate shop.
Eden : There is a lot there is fly, there is Ollie free down the street, there is a place called the
place and it's also a skate shop near Yun Shan stadium, there is also the skate shop avenue
and sons, I don't know where they are, ok avenue and sons, there is doe it's more street wear,
they don't do really skateboarding but street wear. And then there e free which is like in
shanghai space and technology which is a really small store that sells lots of fake stuffs and
so a lot of young kids buy there shoes and grip tapes there because it's really cheap.
Nicolas : How do skate shops reach their target customer
Eden : I think everyone does their own stuff
Nicolas : but for fly shop for example
Eden : for us, I don't know, I guess we pull out a lot of like, I guess we do a lot of marketing in
terms of putting out funny advertisement, we focus on our own clothing line. recently we had
a homeless man over there and I invited him to shot photos for a new clothing and so we gave
him some beer and got really drunk together. We shot really cool model photos and then we
put it all over social media websites like weibo weiching and people loved it. so I guess like
small things like that more and more people know about the street wear and know about skate
company. the place they do really big events every week end because they also own a skate
park so they have huge free beer day or something where every skater gets so drunk and hey
attract many people. Ollie free I don't think they've done so much maybe, I remember they did
an art show and a vinyl night to get a different crowd there. We have been doing this to, we
have been having a lot of art shows, two already and one on the 29th. Avenue and sons they
have been doing more, they release videos to get people into it so everyone has its own way,
different strategies.
Nicolas : Alright but it seems that for china the focus is on digital marketing
Eden : yes everyone is always on their phone. I think more skaters are on their phones instead
of their board so yes it’s easier to influence them
Nicolas : Could you give me some foreign brands in china
Eden: Nike Sb the biggest company, and then Adidas skateboarding were the only shop in
china, converse has a presence but I haven't seen anything from converse recently but I know
mainly its Nike Adidas, converse and vans. then smaller things, skater owned company there
is És, there is Etnies, Lakai. all of those don't really focus on china, their factories are in china
so a lot of people may go to the factory and grab them but the factory doesn't know that but
for licensed authorized retailers we just have the big ones. Independent ones are kind of hard.
27. we also have HUF which is more like a small one and which is good. We have real HUF though
because HUF in china they also have lots of fake.
