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Details on Industry Insight.
Glenn Brumage is working on an interesting project in China to develop action sports culture.
Glenn is the vice president of the International Association of Skateboard Companies board of directors. He is also the director of business development for Wabsono International’s China Action Sports Solution.
Wabsono is a large company with varied business interests, including apparel manufacturing, that wants to grow the action sports lifestyle in China, Glenn said.
I asked Glenn some questions about the project.
1. The action sports lifestyle is largely unknown and having trouble growing because we, as brands, are logically reluctant to spend marketing dollars without immediate ROI. Today’s 20 year old is into school and video games. Today’s 12 year old has the potential but is difficult to reach.
2. The retail model we know here and in Europe doesn’t exist, yet.
3. The distribution system we are accustomed to doesn’t exist, yet.
The three aspects above need to coincide. It was easier for us (the U.S.) because we grew organically over 60 years.
There are really three ways to get into the Chinese market today.
1. Start your own Chinese corporation/subsidiary. Pro – you make all your own decisions. Con – You make all your own decisions (without good Chinese advice, you will screw this up). High cost of entry. Long set up time. Chinese government treats you as a foreigner.
2. Joint venture with a trusted Chinese partner company. Pro – lower cost of entry. Chinese company faces inward solving many political and corporate problems. Faster set up. Connection to Chinese culture. Con – you have to cooperate well with your partners in decision-making. Some investment is involved.
3. License or distribution agreement. Pro – Fast, easy, no investment. Con – Almost no control over how your brand is presented. Distribution of foreign-made product is very expensive, often pricing product out of the market. With licensing, little or no accountability on sales numbers and design.
Today we promote contests and a couple of lifestyle festivals. Our long-term goal is to build a licensing/distribution and retail channel to reach the new Chinese consumer. We can’t do that before the lifestyles are popular. We have to manage all of it together.
We also translate surf and skate lifestyle into the Chinese culture. That may not sound like much, but once you spend a little time there, you realize that we don’t understand them as much as we think we do and vice versa.
They were a closed society while we were going through the modern Cultural Revolution. Coupled with their distinctly philosophical culture and their calligraphic written language (not an alphabet, symbols are words or complete concepts) and we find that it’s impossible to translate anything literally. You have to translate for concept.
That’s especially hard for the surf skate culture and our many uses of slang and counter culture concepts (“bad ass” is good. Say that in Chinese and they’ll drive you straight to the proctologist). The only way to get it right is a discussion on every point we try to make. The Wabsono group is good at it.
Vans, Nike SB/6.0, Quiksilver and Billabong are all engaged in the Chinese market. We’ve been working with Skatepark Systems, Quiksilver, Billabong, Woodward Beijing, Ocean and Earth and most importantly, the central government’s Secretary General of the “Extreme Sports” association.
We are running four skate contests culminating at the second Hangzhou Surf Festival in September. We’ve also begun discussions with the Tourist bureau and local Hainan business’ in the hope of helping them develop the island as a surf vacation destination.
Wabsono International has been in business for years. Its core business has been apparel manufacturing, recycled paper/packaging, lumber and building materials.
As an apparel source for Quiksilver Asia and Ocean and Earth, the group was introduced to the surf/skate lifestyle and wanted to help it grow within their country.
We are in discussion with select US skate and surf brands to license, distribute and or start joint ventures as the market begins to develop. We are always interested in helping other brands enter the market. We need more legit brands to help grow the lifestyle. This isn’t an exclusive party, the more the merrier.
Currently we are getting funding from the few endemic brands that are currently in the market and a few forward looking Chinese companies that target the youth market.
There isn’t any doubt that with a middle class the size of the entire U.S. population and the way that the current Chinese skate culture is growing, that the action sports lifestyle is poised to grow very quickly. The real question will be how.
The Chinese culture and government are so different than ours. To think we can clone the U.S. individualist action sports culture and drop it into China is arrogant and narrow minded. They’ll grow a style of their own. If you can work with them, you’ll enjoy the benefits. If you try to muscle them with your “tried and true” western ways, you’ll fail.