Mind-blowing! Kenyan athlete admits to throwing the half marathon race for He Jie? The pressure is now on Xtep!
Never expected! The sprint finish of the 2024 Beijing Half Marathon has sparked a huge controversy!
He Jie, the Chinese men's marathon record holder and Xtep's contracted athlete, won the race with a time of 1 hour, 3 minutes, and 44 seconds. However, instead of praise, he faced widespread mockery online. But the target of ridicule wasn't He Jie himself—it was the event's sponsor, Xtep. The official Xtep Weibo comments section was flooded with criticism, and even the usually neutral Hu Xijin couldn't stay silent, stating that the public's skepticism was justified. This led to three piercing questions:
Did Xtep manipulate a "fixed race"?
Why did the three African runners "let" He Jie win?
How can Xtep, now in a PR crisis, regain public trust?
Just now! An even more shocking development emerged—media reports claim a Kenyan athlete admitted to letting He Jie win the half marathon...
01. Xtep: Won the Race, Lost Public Support!
On April 14, at the 2024 Beijing International Long Distance Running Festival and Half Marathon, Chinese runner He Jie barely won by a one-second margin, appearing exhausted post-race. In contrast, the three African runners who tied for second place seemed relaxed, their broad smiles suggesting they were happier than He Jie himself. One even patted He Jie on the back as he coughed. Combined with odd behaviors like the African runners looking back, waving, and pointing at the finish line during the race, suspicions of a fixed race exploded.
The first to fall was Xtep's official Weibo comment section, flooded with harsh remarks like "Embarrassing, against sportsmanship," "Xtep should go bankrupt," and "The most disgraceful race in history." Other media and influencer comment sections also overwhelmingly criticized Xtep.
Even the famously neutral Hu Xijin couldn't ignore it. In a late-night Weibo post, he clearly stated, "The public's skepticism is valid." Hu added, "A brand is one of the sponsors of this half marathon, and He Jie is one of its endorsers. He Jie and the three foreign athletes all wore the brand's competition gear and shoes—that's fine. But if they seemingly collaborated to create a predetermined outcome rather than competing fairly..."
Calmly analyzing the event, beyond the suspicious behavior, there are hard-to-explain aspects. For example, the three African runners—one from Ethiopia and two from Kenya—are from world-class marathon nations. Eliud Kipchoge, the 2023 London and Chicago Marathon champion and the first person to officially run a marathon under 2 hours and 1 minute, is Kenyan.
Reports indicate these three African runners have personal best half-marathon times of 1 hour, 1 minute, and 16 seconds. Media analysis suggests that, purely based on ability, all three could have beaten He Jie.
On April 16 afternoon, Guizhou Broadcasting Television's "Public Attention" hosted the topic #KenyanAthleteAdmitsLettingHeJieWin, citing the South China Morning Post's report that Kenyan runner Mnangat admitted to letting He Jie win because "He Jie is my friend." This further shocked netizens.
As of now, neither Xtep nor He Jie has responded further. Without a convincing official statement, this PR storm won't subside. While He Jie's ability as China's marathon record holder is undeniable, his reputation has taken a hit.
Xtep, it's time to give an explanation!
02. How Can Xtep Redeem Itself?
Sports brands partnering with athletes and major events is a common commercial practice in the industry. Nike, Adidas, and Anta all have sponsorship deals. However, in China's marathon scene, Xtep has been the earliest and most invested, with significant results.
Since 2019, Xtep has sponsored the "Chinese Speed" incentive plan, offering a 1 million RMB bonus for breaking records, plus 10,000 RMB for every second shaved off.
According to Frost & Sullivan, Xtep led in marathon shoe usage in 2023. In March 2023, He Jie set a new marathon record wearing Xtep's 160X series. By December 31, 2023, the 160X series had helped 83 Chinese athletes win 370 marathon titles.
At the January 2024 Xiamen Marathon, Xtep shoes were worn by 43.8% of sub-3-hour finishers. As of March 2024, Xtep has sponsored over 1,000 marathons, the most in China, and runs 65 Xtep Running Clubs with over 2 million members.
Xtep has built an unshakable brand reputation in China's marathon community through heavy investment and professional running shoes. But relying on one strength is no longer enough.
Xtep's 2023 financial report highlights its multi-dimensional challenges:
Xtep International reported 2023 revenue of 14.3455 billion RMB, up 10.9%. The core Xtep brand contributed 11.9473 billion RMB, up 7.4%. Operating profit rose 7.9% to 1.5799 billion RMB, and net profit grew 11.8% to 1.030 billion RMB. While the numbers seem solid, the stock market reaction was bleak. Without intervention, Xtep's market cap (11.49 billion HKD) risks being overtaken by 361° (9.201 billion HKD).
By the close of trading, Xtep's stock fell over 4%. As of April 16, 2024, it was still down over 3%, nearly 70% below its peak of 15.87 HKD. In two days, Xtep lost 1 billion HKD in market cap, now at 11.49 billion HKD—far from CEO Ding Shuibo's "100-billion enterprise" goal.
Despite decent financials, the stock slump and broker downgrades suggest limited growth potential beyond unexpected crises.
In 2022, footwear accounted for 60% of Xtep's revenue, but this dropped to 57% in 2023. Footwear revenue grew just 5.3%, lagging behind apparel's 20.6% growth and the overall 10.9% revenue increase.
From 2021 to 2023, Xtep's revenue growth slowed from 22.58% to 10.94%, and net profit growth fell from 77.05% to 11.8%.
Where's the problem?
Notably, Xtep's 2023 advertising and promotion costs surged 28% year-on-year, indicating rising sales challenges.
High inventory is another issue. In H1 2023, average inventory turnover hit a five-year high of 115 days. For the full year, it improved to 90 days—still three months.
Following Anta's strategy, Xtep acquired international brands like K-Swiss and Palladium, building a 1+4 brand matrix. While ambitious, these brands contributed less than 20% of 2023 revenue (1.603 billion RMB for K-Swiss/Palladium, 796 million RMB for Saucony/Merrell), leaving Xtep heavily reliant on its core brand (83% of revenue).
Xtep also faces a "marketing over R&D" perception. While its running shoes are well-regarded, R&D spending pales next to marketing. In 2023, advertising costs hit 1.962 billion RMB (13.7% of revenue), while R&D was 398 million RMB (2.8%).
Amid challenges, opportunities exist. If Xtep can boost its new brands' profitability, optimize products with AI, manage inventory, and rebuild trust, a turnaround is possible.
We look forward to Xtep's sincere and professional response!
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