The racecourse runs fast, but the market sells slowly: Is Xtep's mass-market approach facing a test?

The Daily Economic News Reporter | Zhao Li Nan The Daily Economic News Editor | Dong Xing Sheng

On March 26, Xtep International (HK01368, stock price 4.47 HKD, market value 12.5 billion HKD) released its 2025 performance report.

In 2025, Xtep delivered a report card with both revenue and net profit growth, with the group’s ongoing business revenue increasing by 4.2% to a record high of 14.15B yuan. The profit attributable to ordinary shareholders reached 1.37B yuan, a year-on-year increase of 10.8%.

However, after the performance announcement, Xtep’s stock price experienced a sharp decline. On March 26, it fell by 7%, and on March 27, it dropped by 5.65%.

On the racecourse, Xtep’s running shoes have ranked first in China’s top 100 men’s marathons for four consecutive years, with a wearing rate of 34%. A marathon enthusiast told the Daily Economic News reporter that Xtep’s running shoes are undoubtedly popular among professionals.

Image source: Daily Economic News Media Asset Library

However, in mass sports, signs of sluggish growth for Xtep have begun to appear. Analyzing Xtep’s 2025 performance reveals that the main brand’s revenue grew slightly by 1.5% to 12.52B yuan.

“When some innovative technologies are applied to improve product quality, Xtep faces a choice between raising prices and the costs of consumer education. The top of the pyramid is rising, but when it comes to mass (consumption), people no longer recognize the premium pricing of Xtep,” said industry analyst Zhang Cheng (pseudonym).

In the professional running field, Xtep’s “dominance” was unprecedentedly strengthened in 2025.

Xtep International Chairman Ding Shuibo stated in the financial report: “As China’s number one running brand, our market leadership can better withstand external market fluctuations.”

Data shows that in 2025, Xtep running shoes had a 34% wearing rate in China’s top 100 men’s marathons, ranking first for four consecutive years; in the top 100 women’s marathons, the rate was 21%, ranking first for three consecutive years. In six major domestic marathons in Xiamen, Guangzhou, Chengdu, Wuxi, Beijing, and Shanghai, Xtep achieved the top overall wearing rate.

Xtep stated: “The continued favor of top domestic athletes not only confirms Xtep’s excellent performance but also further strengthens the brand’s good reputation among mass runners, successfully driving consumer trust through professional recognition. With this significant achievement, Xtep becomes the first brand in Chinese marathon history to achieve such comprehensive market leadership.”

Image source: Financial report screenshot

The brilliance on the racecourse is inseparable from top athletes’ support and core product technological iteration. Xtep’s “160X” champion series running shoes continue to help elite runners break records. Feng Peiyou wore the “160X7.0PRO” running shoes at the 2026 Tokyo race, setting a Chinese marathon record with a time of 2 hours, 5 minutes, and 58 seconds, winning Asia’s first place. In November 2025, at the national sports event in the Guangdong-Hong Kong-Macao Greater Bay Area, He Jie won the men’s marathon gold medal wearing Xtep’s champion series “160X” shoes, earning Ningxia’s first-ever athletics gold medal.

The product strength has also been recognized by veteran runners. A marathon enthusiast told reporters: “There’s no doubt that Xtep’s running shoes are popular among professionals. I’ve worn the Xtep 160 series from the 3rd to the 7th generation. A pair of shoes can basically run 2,000 to 3,000 kilometers.”

Financial data shows that Xtep’s professional sports division (including Saucony and Myle) also achieved outstanding financial results in 2025. The division’s revenue surged by 30.8% year-on-year to 1.64B yuan, with operating profit soaring by 46.4% to 115 million yuan.

In building a running ecosystem, Xtep sponsored a total of 74 major running events and activities nationwide in 2025, and has sponsored the Xiamen Marathon for 17 consecutive years. The Xtep Running Club’s T跑族 members have exceeded 2.5 million, with over 7,000 running groups.

“By hosting exclusive events and collaborating with affiliated running groups, we actively promote mass participation, thereby building a more cohesive and vibrant running community,” Xtep stated.

However, in 2025, while the racecourse shines with “fast” victories, the retail market faces the reality of “slow” sales.

Although the group’s overall revenue and net profit increased, the core main brand, Xtep, showed sluggish growth. In 2025, the main brand (the mass sports division) revenue only grew slightly by 1.5% to 12.52B yuan. More concerningly, the gross profit margin of the mass sports division narrowed from 41.8% in 2024 to 41.2% in 2025, with operating profit decreasing by 1.8% to about 1.92 billion yuan, and operating profit margin dropping from 15.9% to 15.3%.

Image source: Financial report screenshot

Xtep explained that the narrowing gross profit margin was mainly due to unfavorable factors currently facing the physical retail industry. To cope with these market conditions, “we increased promotional subsidies and discount rates offered to authorized distributors to support sales.”

Regarding this “revenue increase but profit decrease” concern, Zhang Cheng pointed out that Xtep’s subsidies and discounts have already damaged gross profit margins. “In the short term, the logic is to use subsidies to boost volume, mainly to buy back old inventory and offer significant discounts to distributors, improving shipment efficiency. The reduced shipment efficiency of Xtep’s main products is an objective fact. Through these measures, Xtep can stabilize its inventory base in the short term to gently land from the intense market competition in 2025. The current market environment is not friendly to a business structure like Xtep’s, which relies heavily on a single business. The segmentation of China’s sports market is becoming increasingly obvious.”

Another major obstacle Xtep faces is how to effectively convert the “top of the pyramid” professional recognition into “bottom of the pyramid” mass consumption.

Zhang Cheng analyzed that Xtep’s highly praised running products are mainly designed for specific scenarios and runners, such as racing shoes. When the brand attempts to reach ordinary consumers, there are no well-regarded products that can perfectly serve this market. Meanwhile, Xtep’s long-standing positioning based on cost performance has created inherent price perception biases among consumers. “When some innovative technologies are applied to improve product quality, Xtep faces a choice between raising prices and the costs of consumer education. The top of the pyramid is rising, but when it comes to mass (consumption), people no longer recognize the premium pricing of Xtep,” said Zhang.

He believes that Xtep’s business structure needs to find a new anchor point for adjustment. “Professional and mass markets are not mutually exclusive. Professional sports brands can serve everyone; the key is to help the mass market find suitable products with a clear product matrix and different price tiers,” Zhang said.

(Contributed by Sun Yuting, reporter of The Daily Economic News)