Xtep's Strategic Expansion in Southeast Asia: A Catalyst for Brand Growth and Market Share Capture

Xtep International Holdings Limited has emerged as a formidable player in the global sportswear industry, with its strategic expansion into Southeast Asia serving as a masterclass in leveraging sports events as experiential marketing tools. By transforming marathons, local athlete sponsorships, and community-driven campaigns into platforms for brand engagement, Xtep has not only amplified its retail presence but also created a compelling narrative for long-term shareholder value.

Sports Events as Experiential Marketing: A Dual-Edged Strategy

Xtep's approach to Southeast Asia is rooted in the belief that sports events are more than just sponsorships—they are immersive experiences that foster emotional connections with consumers. The 2023 launch of the Xtep Timed Run in Penang, Malaysia, exemplifies this philosophy. By hosting the event in a UNESCO World Heritage Site, Xtep merged cultural heritage with athletic achievement, attracting both local and international participants. The event not only showcased the 160X 7.0 running shoe series but also positioned the brand as a partner in community health and cultural preservation.

This strategy has been replicated across the region. In 2025, Xtep sponsored Vietnamese runner Phạm Thị Hồng Lệ to victory at the VnExpress Marathon Ha Long, while also launching the 160X 6.0 series and a night running campaign. These initiatives have created a feedback loop: athletes gain visibility, consumers associate Xtep with performance, and the brand's retail channels benefit from heightened foot traffic and online engagement.

Financial Impact: From Brand Recognition to Revenue Growth

The financial metrics underscore the effectiveness of Xtep's event-driven marketing. By 2023, the company had entered 12 new countries in Southeast Asia, including Malaysia and Thailand, and partnered with five major Vietnamese retailers. These partnerships are projected to increase sales reach by 30%, while localized campaigns featuring regional athletes have driven a 50% growth in brand recognition.

Marketing expenditure in the region rose by 25% in 2023 to CNY 80 million, reflecting a calculated investment in digital and grassroots engagement. The results? A 29.5% year-on-year revenue increase in 2022, with Southeast Asia contributing significantly to this growth. Xtep's 2024 financials further validate this trajectory: profit attributable to ordinary equity holders hit RMB1,238.4 million, a 20.2% year-on-year increase, while e-commerce sales accounted for 30% of core brand revenue, driven by platforms like Douyin and WeChat.

Shareholder Value: Dividends, ESG, and Long-Term Confidence

Xtep's commitment to shareholder returns has been equally robust. In 2024, the company declared a special dividend of HK44.7 cents per share, alongside a 221.7% increase in total dividend payouts. This was complemented by a 138.2% payout ratio, signaling confidence in sustained profitability. Additionally, Xtep's 2030 ESG strategic framework—which includes commitments to sustainability and community engagement—has enhanced its appeal to ESG-focused investors. The company's “A” rating in MSCI ESG Ratings in 2024 further solidifies its reputation as a responsible corporate citizen.

Investment Thesis: A High-Conviction Play

For investors, Xtep's Southeast Asian strategy offers a compelling case. The region's growing middle class, rising health consciousness, and digital adoption create a fertile ground for Xtep's event-driven retail model. With 451 running championships won by Xtep-sponsored athletes and 2.1 million members in its Xtep Runners Club, the brand has cultivated a loyal community that translates into recurring revenue.

Moreover, Xtep's divestiture of non-core brands like K·SWISS and Palladium in 2024 has sharpened its focus on running and professional sports, aligning with Southeast Asia's demand for high-performance gear. The Saucony and Merrell brands, now central to Xtep's portfolio, have seen 72.2% year-on-year revenue growth in 2024, indicating strong cross-market appeal.

Conclusion: A Win-Win for Retailers and Shareholders

Xtep's Southeast Asian expansion is a testament to the power of experiential marketing in the sportswear sector. By turning marathons into brand-building exercises and local athletes into global ambassadors, the company has not only captured market share but also created a sustainable model for growth. For investors, the combination of double-digit revenue growth, rising dividends, and ESG alignment makes Xtep a high-conviction opportunity. As the company continues to open Mono Stores and deepen its digital footprint, the next phase of its Southeast Asian journey promises to deliver both retail engagement and shareholder value.