From Selling Products to Running: Xtep's Decade of Transformation

Ask AI · Why did Xtep choose running as the core of its brand reconstruction?

 (By Huo Dongyang, Edited by Zhang Guangkai)

If you compress China’s sportswear brand journey over the past decade into a single sentence, it would roughly be the shift from “selling products” to “building brands.” Xtep, in particular, is one of the most typical—and also the most complex—examples of this path.

On March 26, Xtep International (1368.HK) released its full-year results for 2025. During the period, the group’s full-year revenue increased by 4.2% to RMB 14.15B, while net profit rose by 10.8% to RMB 1.37B.

 
On the surface, this 2025 financial report is a “steady progress” scorecard: revenue sustained growth, profit improved, and the structure was optimized. But if you place it back onto the timeline of the past decade, it looks more like an interim answer sheet—one that both proves the effectiveness of the transformation and exposes structural tensions that the transformation has not yet fully resolved.

**2025: Growth holds, but the logic has already changed** 

From the data perspective, Xtep’s performance in 2025 is not bad.

Revenue maintained low single-digit growth, and profit improved at a faster pace, resulting in a typical structure where “profit is better than revenue.” This indicates that the company has already made some improvements in cost control, product mix, and operational efficiency.

If you break down the structure, you’ll find a very clear split: on one side is Xtep’s main brand, with growth hovering in the low single-digit range; on the other side is the professional sports segment—multi-brand business with running as the core—maintaining high double-digit growth.

 
In other words, Xtep’s growth is real, but the driver of growth is no longer “Xtep.”

This is a typical “structural growth” financial report: the total scale is expanding, but the underlying engine is migrating.

According to an interview by “Lanxiong Sports” (懒熊体育) with Ding Shuibo, over the years, Xtep has not lacked opportunities to acquire brands. But whenever these choices are put in front of him, he is always cautious—again and again.

Until 2019, Ding Shuibo felt it was time to let Xtep kick-start the expansion of added categories and the broadening of its market layout through acquisitions. Xtep introduced and operated professional brands including Saucony and Merrell in sequence, while completing the integration of K-Swiss and Palladium.

This step is, in essence, an “instruction-by-expansion” approach.

Xtep gradually realized that relying solely on its own brand makes it difficult to compete head-to-head in the high-end running market against international brands. Rather than starting from scratch, it’s better to bring in brands that already have accumulated technical capability and market understanding.

Use capital to quickly build a multi-brand matrix covering three segments of consumption: fashion sports (K-Swiss, Palladium), professional sports (Saucony, Merrell), and mass-market sports (Xtep’s main brand).

And Xtep’s 2025 financial report perfectly validates the effectiveness of this path: the professional sports segment became the growth core, especially Saucony, which rapidly opened the situation in the high-end running market.

Saucony’s “second curve” has taken shape in preliminary form. In 2025, Saucony recorded operating profit of RMB 115 million, with an operating profit margin of 7%.

After going through an early investment period, the professional sports segment achieved a turnaround from loss to profitability, and entered a stage where profits accelerate and are released faster.

Saucony has “stood firm.” In the most direct brand visibility indicator on marathon racecourses, Saucony’s overall wearing rate at the 2025 Wuxi Marathon ranked among the top international brands. This reflects high-end runners’ recognition of the brand’s professionalism.

Saucony’s “standing firm” finally gave Xtep a vehicle for telling a high-end story; Saucony’s profitability turned that story from concept into reality.

 
However, in China’s market, K-Swiss and Palladium have always struggled to find a clear brand positioning—it’s well received, but doesn’t translate into strong sales.

In 2024, Xtep announced that it would take K-Swiss and Palladium private. The founder’s family would take over at a price of about $151 million, and distribute the full proceeds to shareholders in the form of a special dividend.

After that, Xtep’s business structure became clear and restrained: Xtep’s main brand targets the mass running market; Saucony serves high-end elite runners; and Merrell focuses on niche scenarios in trail running and outdoor use.

With three brands, they share the same strategic core: running.

 
**The “crossroads” ten years ago** 

For Xtep, 2015 was a turning point it had to make.

At that time, Xtep was still a typical channel- and marketing-driven company. Its success was built on three things: dense “downward” channel penetration, strong celebrity endorsements, and relatively approachable price bands.

That was an era when “traffic was still cheap.” As long as a brand had enough exposure, it could be converted into sales. In that environment, Xtep’s “entertainment-style sports brand” positioning was once very successful.

 
2012: A spokesperson for Xtep, Xie Tingfeng & Han Geng 

But the problem also lies right here: it almost never established real product and technology barriers.

When the industry entered a de-stocking cycle, e-commerce disrupted offline systems, and consumers began to segment, this model quickly stopped working. A brand could be seen, but it was no longer the first choice.

It was against this backdrop that founder Ding Shuibo made a strategic bet that seemed risky at first glance, but was actually precise: focusing on running.

He once said externally, “You can run at home alone, or you can run together with tens of thousands of people. It has no restrictions on venues, and no age threshold.”

These words are simple, yet they capture the core advantage of running as a mass-track sport: low barriers, broad coverage, and a sustainable growth path of participation.

From a commercial strategy standpoint, this is a highly rational judgment.

Compared with tracks like basketball and fashion trends, running has a more stable demand base and also makes it easier to build a technology narrative. More importantly, it aligns closely with the long-term trend of “healthy lifestyle.”

In 2015, Xtep officially proposed the “3+” strategic transformation: Product+, Sports+, and Internet+.

Translated into business language, it means strengthening product capability with functional running shoes as the core—reinforcing cognition with technical labels such as carbon-plated running shoes; building a brand ecosystem through marathon sponsorships, where sponsorships create brand exposure; and推进 (through connecting online and offline data) retail’s more refined management, shifting the past wholesaling mindset based on multi-layer distributors toward a control model closer to retail endpoints.

The significance of this step is that it helped Xtep complete the brand narrative’s first major reconstruction: from “anyone can wear it” to “runners will choose it.”

Ding Shuibo’s bet was not only on the running market’s tailwinds, but also on a clear anchor for brand differentiation.

 
In 2022, Xtep formally proposed the brand strategy “World Running Shoes, China Xtep.” That year, Xtep’s cumulative sales of running shoes exceeded 20 million pairs, and the Champion Edition running shoe series 160X累计销售超过2 million pairs.

After the pandemic, the sports choices among people in Chinese cities changed noticeably. Gyms and group sports were restricted for a time, whereas running hardly depends on any venue or organization, making it a form of physical activity that can be resumed immediately.

This “low infrastructure dependence” characteristic makes running one of the sports that rebounds earliest.

A deeper change is that running has been given renewed meaning—it’s no longer just about exercising your body, but a way to rebuild everyday order. Many people have started to reestablish a sense of time, a sense of rhythm, and a sense of bodily control through running.

Compared with one-time consumption experiences, running is more like a “sustainable self-investment.”

That’s also why more and more people have begun to take running gear seriously. From entry-level running shoes to carbon-plated shoes, and from sports watches to heart-rate belts, the consumption structure itself is upgrading and moving into a more mature stage.

As the company that sponsored marathons early, organized running communities (in 2012, Xtep began running a running community called “Xtep Running Tribe”), and hosted running festivals, positioning running as Xtep’s differentiation fits the current tailwinds perfectly.

**What has Xtep achieved, and what is still missing** 

Over a decade of transformation, Xtep has gone through two key breakthroughs: the first was a shift from a fashion sports brand to a professional running brand; the second was a return to focus after excessive diversification, reorganizing the brand matrix along the main axis of running.

Looking back from the point of the release of its 2025 financial report, what’s most worth recording about Xtep’s ten-year transformation is not the ups and downs of any single year’s financial figures, but how a mid-sized local brand found a differentiated coordinate that it can continuously deepen in a competitive landscape crowded with strong players.

During this decade, Xtep has also accomplished several important things: it moved from a marketing-driven brand to a professional sports company centered on running; from a single brand to a multi-brand combination; and from a rough distribution system, it began moving toward more refined retail operations.

If the transformation of the first ten years happened more at the brand and product levels, then starting in 2025, Xtep has entered a more challenging stage: channel restructuring.

The company has clearly stated that it will gradually withdraw distribution rights for about 400 to 500 stores between 2025 and 2026. Of these, the first batch of about 100 stores will be launched in the second half of 2025, and will gradually transition to a直营体系 (directly operated system).

 
The essence of this step is shifting from “relying on distributors” to “controlling the terminal.”

Distribution was the foundation for Xtep’s rapid expansion, but now its limitations are becoming increasingly obvious: it’s hard to unify the pricing system, inventory pressure spills over, and user data can’t be accumulated.

Direct operation is the opposite: it means higher costs and more complex operations, but it also means stronger control and clearer user insights.

Based on industry experience, this is a path that “must be taken but is very hard to take.” Both Anta and Li Ning have gone through pain during this stage.

For Xtep, the issue is not whether it should do it, but whether it has the organizational capability to run the directly operated system smoothly.

But just as clearly, it is still in a “transitional state”: the main brand is still pushing upward to break through, the multi-brand system has not yet formed a synergistic flywheel, and channel restructuring is only just starting.

Running remains Xtep’s top priority.

Ten years ago, Ding Shuibo said he looked favorably on China’s running market. Ten years later, the market has proven his judgment.

In the next decade, what Xtep needs to prove is whether it can keep leading in this increasingly lively running track.