At the age of 17, Fujian-born Ding Shuibo told his father that he wanted to drop out of school so that he could help his family lead a better life. He had already worked during his childhood, selling fried dough sticks and popsicles, but this time he had larger ambitions. He quickly learned how to make shoes, and within a few months he had saved Rmb500 ($77), which he used to set up Sanxing Company, with two of his brothers.
Working day and night, the new business made its first 300 pairs of shoes, which they sold to a Sichuan businessman. The shoes proved a hit in Chengdu: shoes made in Fujian, just over the strait from Taiwan, were supposed to be trendy. It’s no surprise that the businessman came back for more of Ding’s shoes.
Ding quickly started to focus on foreign markets too. He had his first success in Russia, before extending his distribution channel to more than 40 different countries. At its peak, Sanxing was exporting up to 200 containers a year, each holding more than 10,000 pairs of shoes. Ding became a champion of China’s shoemaking industry.
As other local shoemakers set their sights on foreign markets, exporting shoes became less profitable. Ding turned his focus back to the domestic market, changing Sanxing into Xtep, a new brand that combined sportswear with fashion. His first breakthrough was one trainer design that set a record by selling more than 1.2 million pairs. Having cracked the market for footwear, apparel was the next step.
Need to know
A Hong Kong IPO raised $286 million. In 2010, the company reported annual sales of Rmb4.45 billion, a 25% increase on the year before. Net profit also improved by 25% to Rmb813 million.
In 2010, Xtep paid HK$100 million for a five year deal to become a sponsor of Birmingham City, the football club controlled by Hong Kong tycoon Carson Yeung. It probably seemed like a good idea at the time – after all, Birmingham City was in the Premiership, the paramount league in English football. But due to poor performance, City has been relegated. Bad enough. But Ding will also be upset to hear Yeung has been arrested and appeared in a Hong Kong court this week for money laundering offences.
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