What is Lu You and why will Steve Nash be wearing their shoes?

January 15, 2011

Chinese Shoe Brands

Post by Jon Pastuszek 

January 15, 2011

Chinese Shoe Brands

In my two and a half years living in Beijing and Nanjing , I’ve never heard of Lu You(露友, pronounced loo-yo)brand shoes.  But, then again I’m not really on the lookout for kicks in China — with size 13 feet, I’m resigned to either ordering online through American sites or bringing back boxes of new sneaks when I take trips back to the States, as even the biggest Adidas store in the nation doesn’t carry sizes past 11.5.

So, I suppose it is possible that I’m missing out on Lu You simply because I’m not looking.

With that said, however, there are some indisputable facts that contribute to my total unfamiliarity with Lu You.  They don’t advertise during NBA games on CCTV-5 or BTV, nor do they run ads during CBA, FIBA, CUBA (China’s college basketball league) or any other basketball leagues or tournaments.  To my knowledge, not one basketball player, domestic or international, sports their shoes and I’ve never heard or read about the company as the official outfitter of any type of team.

So was as in the dark as every other fan who was scratching their head this week when CounterKicks reported that two-time NBA MVP, Steve Nash, had signed an exclusive endorsement deal with the Chinese company.

To the casual observer, Nash’s move to Lu You could seem strange.  The company’s “About Us” page does not mention the word “basketball” once and their online catalog of products offers merely two pairs of basketball shoes and exactly zero pieces of basketball clothing.

So just what is Lu You, then and why is Steve Nash going to where their shoes?  According to their official website, the Jinjiang, Fujian based company was launched in 1992 and currently employs 2000 people with about 40,000 square meters of factory space.  In recent years, they’ve sponsored the Women’s Chinese Volleyball League, the U-17 Women’s Ping-Pong National Team, and the China-Japan Women’s Volleyball Club Championship. In 2008, they sponsored the Tajikistan Olympic Team in Beijing and in 2009 they added the Bayi Women’s Volleyball team to their roster as well.

No wonder I’ve never heard of these guys.

Yet, despite not having widespread brand recognition in China or much experience with basketball, Nash has chosen to lace up a pair Lu Yous for the presumptive remainder of his career.  Given his history with back problems, signing up to become the brand’s first ever basketball player strikes a lot of people as a particularly odd and potentially risky decision. (As Seth Pollack over at Bright Side of the Sun alerted me to, Nash will continue to wear Nikes while playing in the NBA, though we’re not sure if that’s a temporary or permanent thing seeing that Nash doesn’t really have a choice as Lu You doesn’t have a signature shoe for him yet with it being midseason and all.)

NBAers sporting Chinese shoes isn’t a new trend, though.  Nash joins a growing list of NBA players who have already ditched their old Western shoe deals in favor of the Middle Kingdom.  Leading the way is Peak, who according to HoopsHype has eight players under contract, including Jason Kidd, Ron Artest, Shane Battier, Andrew Bynum and Jason Richardson.  Coming in second is Li Ning, who sports Baron Davis, Shaquille O’Neal, Evan Turner, Jose Calderon and Hasheem Thabeet.  This past summer, Kevin Garnett signed up with Anta, as did Luis Scola.

And like all those guys listed above, it’s pretty evident what Nash trying to accomplish here.  Said Brian Berger, host of Sports Business Radio (via BizJournals.com), “Most of the guys who are signing these deals are kind of in the twilight in their careers and they’re opting for a bigger paycheck and maybe they’re saying, ‘Hey, I want to do some business in China post-career,’” Berger said. “It doesn’t take a mathematician to realize if you can get into a small fraction of the market in China, you’ll do much better than you would with a bigger market share here in the United States.”

Nash should be in a good position to do just that, as he will instantly become the face of a brand that has lots of room for growth in the massive Chinese hoops market.

In addition to Nash’s ambition as a Sino-centric business man, the move to the lesser known Lu You says a lot about the changing climate for Chinese sportswear companies.  For years, the dominant domestic force in China has been Li Ning, which was founded in 1990 by the Chinese gymnast of which the brand is named after.  After losing their grip on China in 2003 when Nike and Adidas took over the top two spots, Li Ning re-imaged and expanded their brand to appeal to Chinese youth and regain their previous position.  Since then, Li Ning has since overtaken Adidas, but still lags behind Nike.

But, as more and more people in China have money to spend on athletic apparel, more and more companies have upped their efforts to get a piece of the pie, which in turn is affecting the entire industry, Li Ning very much included.  Scared off by worries of overexpansion (that store in Portland, Oregon anyone?) and increased competition from companies like Peak and Anta, investors are way down on the company, its share price in Hong Kong having decreased by 15%.  (You can read The Economic Observer’s interview with Li Ning CEO, Zhang Zhiyong, about their recent struggles here.)

The word on Peak and Anta, is more encouraging than Li Ning, but investors appear to be unclear as to how they’ll be affected with the one-time booming athletic industry now experiencing a slowdown.

All that brings us to Lu You, the new guys on the China basketball block.  As this is their first foray into the sport, the company and Nash obviously feel that there is only room for development and growth.  And with so many potential customers in China, even a little bit of growth is worth quite a lot of money — more than remaining with Nike in the States.

Nash was also intrigued by an opportunity to become relevant in the Chinese community, as Lu You’s dedication to humanitarian work also apparently struck a cord with the charitable point guard.  As the China Daily explains:

Apart from the commercial cooperation, public welfare programs also played a key part in luring Nash, who is well known for his charitable work, according to his business manager, Brandon Kou.

“Steve has a very deep affection for China and the kids are something really important him. One of the things that we looked for in a partner was to benefit the community and the kids here. That’s what we stand for,” Kou told China Daily after the announcement.

Nash has been to China a couple of times before and has even balled at the famous (and super crowded) Dong Dan basketball courts in Beijing.  Now the front man for a Chinese shoe brand, you can bet that he’ll be back there again — though we can’t promise a repeat of those epic Horace Grant goggles.

Follow Jon Pastuszek on Twitter @NiuBBall

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Trackbacks/Pingbacks

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