Under Armour will not win in China – Shaun Rein

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Shaun Rein

Shaun Rein

High profile sportswear Under Armour’s is trying to its new Curry Two shoes also in China, but business analyst Shaun Rein believes the company faces severe barriers on the way to the Chinese market, he tells Afro.com.

Afro.com:

China, where the first Under Armour store opened in 2011, has just started to see profitability. Management is investing heavily in the Asian powerhouse. But the country’s individual taste might force the company to rethink its product assortment.

“Shoes are more important than apparels here. It’s different from America,” said Shaun Rein, a retail expert leading the Shanghai-based China Market Research Group.

In the U.S., footwear sales usually account for 22 percent of total sales at Under Armour stores. The number in Asia is 30 to 35 percent, Under Armour management said at an investor meeting in Baltimore in September. Plank said at the meeting that footwear sales accounted for more than 75 percent of the total on the opening day of the new Shanghai store.

Rein said the price tag, however, is driving customers away. “An average pair of Nike sneakers would cost $70 to $80 dollars in China, which is already very expensive. But Nike has built an image here as a high-end sportswear brand. Under Armour is even more expensive than that. Yet it doesn’t have the brand recognition to back that price point.”

Another potential problem for Under Armour: lately, Rein said Chinese consumers are spending less money on clothing and more on dining and entertainment.

More in Afro.com.