In 2014, the reliance on OEM (Original Equipment Manufacturing) production became a major obstacle to the development of China's sports goods industry. The issue stemmed from weak brand building, with most Chinese sports companies operating in low-end markets both domestically and internationally. Their main competitive advantage was low pricing, leading to intense product homogenization and low-profit margins. Unlike many foreign sports brands that leveraged strong branding as a strategic tool, Chinese brands struggled to establish a clear identity. For example, while brands like Double Happiness maintained a specialized approach, Li Ning eventually found its professional path after years of uncertainty. Meanwhile, brands such as Anta focused on affordable, mass-market products.
Most Chinese sports enterprises positioned themselves as lifestyle or casual sport brands, targeting the general consumer base through extensive retail networks and celebrity endorsements. However, this strategy led to a lack of distinct brand image and core value recognition. As a result, they failed to create the strong brand identities seen in global leaders like Adidas or Nike, forcing them to compete in the same market space. This resulted in price wars, which not only reduced profit margins but also caused significant resource waste across the industry.
The analysis highlights that many Chinese sports companies remained stuck in OEM production for a long time. Their scale was limited, and they lacked skilled technical personnel and adequate investment in R&D. The number and intensity of science and technology projects were low, leading to weak innovation capabilities and limited new product development. This further hindered their ability to compete globally and innovate effectively. Without strong R&D and brand differentiation, the industry faced challenges in moving up the value chain and achieving sustainable growth.
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