Wu Rongguang was born in 1975 in Quanzhou (one of China’s claimants to the “shoe capital” title). Wu’s own ties to the industry were close ones. His father was the boss of a shoe factory and Wu junior chose to study sport shoe design in Shenyang. After graduating he joined the family business providing OEM services to foreign brands. But in 2000 he founded a new company with registered capital of $5 million, creating his own brand ERKE.
ERKE was a small player in Quanzhou, where more than 3,000 manufacturers produce over 700 million pairs a year. So Wu went looking for a niche, casting the company as a “pioneer of technologies”, producing high-end sport shoes. In 2005 ERKE made a splash at a national footwear expo, with a new structure to protect the feet from injury, as well as an internal air circulation system. “The first China high-tech sport shoe brand” was the headline in newspapers the next day. It helped that – compared to Nike and Adidas – ERKE was less expensive. By the end of 2005, sales reached Rmb 600 million, well up on Rmb10 million in 2001.
As a second-generation entrepreneur, Wu’s approach to developing the business differed from his father, who warned him against ceding the family’s control. But Wu himself thought he needed strategic investors to help solve financing and expansion problems. In 2005 HongXing ERKE successfully listed in Singapore, raising Rmb200 million. It was the first China sportswear company to list overseas.
With 5,500 sales outlets nationwide, ERKE is now one of the leading sportswear brands in China, with a product range including sneakers, sportswear and sports accessories.
ERKE also has a long-running association with Chinese tennis. Back to 2005, Wu sensed that public interest in tennis would increase, although there were few Chinese sponsors in the sport at the time. So he decided to use tennis sponsorship in his marketing strategy, focusing on the ATP Masters Tournament in Shanghai. It looks like being a succcessful bet: Li Na’s victory at the French Open this year, the first player from China to win a Grand Slam singles title, has raised the profile of the game significantly.
In 2008 ERKE’s sales hit a record Rmb2.8 billion, but fell to Rmb1.99 billion in 2009. The Singapore-listed firm’s financial report for 2010 was, however, delayed due to financial irregularities and trading in the stock has been halted since February. Last year’s results are supposed to come out later this month. An insider blamed the firm’s problems on too rapid an expansion.
And to relax
Besides golf, Wu’s other hobby is shopping.”I like walking around shopping malls or small stores, checking out the items, the colours, the fashion styles, the designs, even the smell… they all inspire me, I totally forget the time.”
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