NBA's Wade in China to promote sneakers, but supply is short
BEIJING (Reuters) - The Miami Heat's Dwyane Wade visited China on Wednesday for the first time since signing a multi-million dollar contract with Chinese sportswear company Li Ning last year, but the sneakers that bear his name are in short supply.
Chinese stores are slowly being re-stocked with the "Way of Wade" shoes, but they won't be widely available on U.S. markets for some time.
With hundreds of fans cheering at a promotional event in Beijing, the six foot-four inch tall Wade chest-thumped the diminutive Chinese host on stage and towered over Olympic gymnast Li Ning, the founder of the company that bears his name.
"Li Ning is what I believe in, it's my style," the NBA superstar said, wearing a T-shirt emblazoned with his face and the signature gold and black Wade sneakers.
But Li Ning has left customers on both sides of the Pacific wanting for the Wade shoes, unable even to profit from the Heat being crowned NBA champions last month. Wade's teammate LeBron James's Nike sneakers recorded the highest U.S. sales of any NBA player last year, drawing $300 million.
It's not known how many pairs of Wade sneakers have been made and sold so far but it's only in the region of a few thousand. Most basketball fans scouring stores and the Internet for the shoes outside China are coming up empty-handed.
In China, some stores have been given stocks since the beginning of the month.
Li Ning, backed by Singapore sovereign fund GIC and U.S. private equity firm TPG Capital, lured Wade from rival Nike last year in a sponsorship deal worth an estimated $100 million over 10 years.
The company is cagey about its strategy and divulged no details of manufacturing capacity or projected sales for the Wade sneakers.
"Making revenue with this was a secondary consideration for us," executive vice chairman Jin-Goon Kim told reporters.
"We're trying very hard to increase capacity," he said, citing the limited number of factories that can manufacture Wade's shoes.
"One of the things that really made it more difficult to scale up is Wade is so meticulous. These shoes are really complicated," said Kim.
The company, which is refocusing efforts on China after posting a $318.8 million loss last year, is struggling even on its home turf, with few resources to spare for other markets.
But it may be getting its act together. Besides the start of the re-stocking, the NBA superstar will visit Shanghai and Guangdong to promote the shoes.
However, overseas markets, including the United States, will come only later.
"We have to first serve our Chinese consumers because there is so much demand here that we cannot fulfill," said Kim.
Franklin Yao, managing partner of Shanghai-based strategy consulting firm SmithStreetSolutions, said the sneakers were aimed at the Chinese market since there was no distribution in the United States and the shoes were only available in specialty websites or on e-bay.
"They are obviously missing out on potential sales in the U.S., given the buzz that the shoes have generated, but building out U.S. distribution may not be as quick as the opportunity to sign Dwyane Wade was," Yao said.
"The U.S. market itself is just not a focus for Li Ning right now - China is," said James Roy, senior analyst at Shanghai-based China Market Research.
"They don't have any stores in the U.S. and their e-commerce presence has been shut down. This is almost completely about the Chinese market," Roy said.
(Additional reporting by Donny Kwok and Twinnie Siu in Hong Kong; Editing by Raju Gopalakrishnan)