China Consumer

The great outdoors

Han Han signs deal with ‘China’s North Face’

The great outdoors

Action man: Camel’s new hire

When Han Han is not working on his writing career (blogging as well as hugely popular teenage novels) he races cars professionally, releases pop music and launches magazines.

All that activity has made him pretty high profile (Han was nominated among the Most Influential People of the Year by TIME magazine in a 2010 poll, see WiC71) and his weibo musings keep 10.7 million followers on tenterhooks.

Of course, Han’s persistent popularity also attracts the advertisers and in his latest effort to cash in, he has signed an endorsement deal with Camel, China’s largest ‘outdoors’ apparel brand. Camel is said to be spending more than Rmb10 million ($1.6 million) to hire Han as spokesperson for the outdoor adventure lifestyle and he is also appearing in a national ad campaign in Camel gear, battling his way through a snowy landscapes.

So what is Camel? Little known outside China, the label operates more than 3,000 stores nationwide. It was previously a footwear firm, making men’s shoes. But Wan Jingang – who acquired the company about a decade ago – saw the potential of moving up the value chain. He relaunched the firm under the new name Camel and focused on building its brand.

“Branding is the only weapon a company has to withstand the price and cost pressure,” Wan told China Business News.

Camel has found its niche designing high-performance clothing and footwear, like ski jackets and hiking boots for the growing number of Chinese who enjoy outdoor pursuits.

The timing was good. More consumers are embracing the outdoors and sales of outdoor gear increased nearly 50% between 2000 and 2010, surpassing growth rates in the US and Europe. Last year, industry revenues reached Rmb10.8 billion, says Southern Metropolis Daily. Camel, which enjoys almost a third of the market, says its own sales were Rmb3 billion. Analysts say the firm is developing into China’s version of the popular global brand North Face.

Camel’s Wan told Xinmin Evening News that the company has prospered at a time when peers like Li Ning and Anta have been closing underperforming stores, which he takes as a sign that consumers now favour outdoor products after a period in which they overloaded their wardrobes with sportswear. Making Han a product ambassador is also the culmination of a carefully-orchestrated marketing strategy. Of course, Han is well known for competing in car races, winning both the China Rally Championship and the China Touring Car Championship last year. But Camel has sought out other sponsorship deals too, becoming a lead partner of the Chinese Mountaineering Association and sponsoring the Chinese sailing team in the 34th America’s Cup. More recently, it launched the Everest Warrior marketing campaign to send two adventurous types up the world’s highest mountain (Camel promises three pairs of hiking boots to each winner, to help with the ascent). The idea is to promote outdoor sports among China’s better-off, white-collar workers, Wan told China Business News.

The firm is also advancing in other areas. In 2009 Camel became one of the first footwear companies to set up a virtual store on Taobao, China’s largest online consumer site, and last year it made more than Rmb100 million in sales on Taobao’s Single’s Day (see WiC129). Wan says the e-commerce team has grown from 3 people in 2009 to 700 today. Still privately-held by Wan, Camel is also trying to broaden its appeal by adding more women’s lines and leisure wear.

As it expands, Camel won’t want to lose its cachet, nor its association with a more elite, adventure-driven lifestyle. It can also expect more media exposure. There has already been more sniping this year: veteran climbers snootily say the outfit Han is sporting in his latest ad campaign isn’t appropriate attire for the harsh snowy backdrop. As long as sales increase, Camel probably won’t be too bothered…

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.