At first glance the branding for Chinese sportswear firm Erke looks a lot like Nike. They both have swooshes as their logos and both brands use the Chinese character克 (ke). But while Nike was named after the Greek goddess of victory, Hongxing Erke – to give Erke its full name – has a rather different inspiration, meaning something along the lines of ‘Red Star Bolshevik’.
Until recently Erke wasn’t much of a rival to Nike and Adidas in popularity terms. Yet it has grabbed attention by making a sizeable donation to charities helping the victims of flooding in Henan province (see WiC550) on July 21. Netizens noticed a brief, unassuming statement about the financial contribution and were impressed by the fact that Erke’s donation of Rmb50 million in supplies matched that of much larger, more profitable companies such as energy company Sinopec and phone maker Xiaomi.
“I have never noticed your products before but from now on I’ll only wear Erke,” remarked one netizen, with other shoppers deciding to reward the sportswear firm by buying its goods in record numbers.
E-commerce platform JD.com noted that two days after the donation, sales of Erke goods had increased an astounding 52 times. Taobao and Douyin livestream sales also reached Rmb270 million over a two-day period – equivalent to almost 10% of last year’s takings.
Erke made Rmb2.8 billion in sales in 2020 but still ended the year some Rmb220 million in the red, according to media reports.
It was listed on the Singapore stock exchange in 2005 but departed last year, following suspension from trading due to the discovery of “accounting irregularities” since 2011.
Erke got its start in 2000 in Quanzhou, a city in Fujian province. It produces a wide range of sporting apparel, although the brand is most closely associated with tennis and table tennis. Between 2006 and 2009 it also had the unique honour of sponsoring the North Korean football team (kudos to any reader who can name another).
The sudden affection for Erke among consumers mirrors a wider shift to so-called ‘patriotic shopping’ – a phenomenon helped by improvements in product quality from local companies and an increasingly waspish view of Western brands thought to disappoint in terms of quality or customer service (Tesla was the latest to take a hit here, seeing a 69% plunge in China sales in July on June, after what Bloomberg termed “a run of negative publicity”). In addition, Chinese consumers have shunned Western companies such as H&M because of perceptions of their positions on sensitive political issues in Xinjiang, Hong Kong or Taiwan.
Erke is reaping the benefits of a more positive response from the Chinese public, however. “We will keep buying till your sewing machines break,” one new fan said of the shopping frenzy sparked by the company’s donation. Indeed, such was the rush to support Erke that the CEO had to appeal to people to “shop rationally”. That was to no avail – by the end of July Erke was running out of stock and the company’s sales system couldn’t cope with the order flow. Yet when customers were advised to apply for refunds because stock had run out, many said they would wait until Erke could deliver the requested items – or in more extreme cases, that the company could just keep their money anyway.
In a scene no one could have predicted, a man was even shown insisting on paying over the asking price for one of its T-shirts….
Management will be hoping this isn’t all a passing fad and that consumer enthusiasm for Erke products persists…
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