Donation sparks ongoing business turnaround
Erke, a troubled domestic sports and lifestyle brand, probably never imagined that a donation to a flood-ravaged city would spark patriotic fervor and a craze for domestic sportswear that would drag it out of the financial doldrums.
Established in Xiamen, Fujian province, in 2000, Erke's fine designs and quality led to its best year in 2005, when it was listed on the stock exchange in Singapore. Business took a big hit, though, when it expanded after 2008, and three years later trading in its shares was suspended after allegations of "accounting irregularities".
Then, in 2015, a devastating fire destroyed over half its manufacturing facilities, dragging the company into long-term debt.
The turning point came in July, when Erke donated supplies worth 50 million yuan ($7.85 million) to Zhengzhou, capital of Henan province, which had been severely hit by flooding.
News of the company's generosity quickly went viral online, prompting netizens' admiration that it had given such a large amount, despite its hard times.
"I was impressed and bought two T-shirts soon after I heard the news. The brand was very famous when I was at junior high school, but its reputation had fallen in recent years," said Li Lingli, a 26-year-old salesperson in Beijing.
"The company's clothes and sports shoes are inexpensive. I remember that the two T-shirts only cost me 65 yuan. The price was not my main reason, though. It was the company's kind actions. It's amazing that it can donate supplies worth that amount when it is itself in debt."
She said her patriotic feeling was quickly ignited.
"It's not about money, but about a company's dignity and social responsibility. Take a look at those foreign brands who have earned a lot of money from Chinese customers while making allegations about 'forced labor'. That really put me in bad mood," she said. "I used to laugh at domestic brands, but now they are earning my respect."
Erke has lived up to expectations in recent months. During the Singles Day online shopping festival, the brand registered sales of more than 100 million yuan in just 45 minutes after the spree started at 12.01 am on Nov 11.
The company's turnaround has also benefited other domestic brands, thanks to people's increasing acceptance of, and stronger confidence in, the nation's culture and future development, according to industry insiders.
Zheng Yexin, general manager of the branding department at the sports brand 361 Degrees, said Chinese people, especially the younger generation, have changed their views about domestic products and are now starting to appreciate them rather than regarding them as a joke.