The company is building an overseas market for its running shoes, targeting 50% annual growth for that part of its business over the next three years

image credit: Bamboo Works

Key Takeaways:

  • Xtep has entered Malaysia with the opening of six new stores, complementing recently opened shops in Singapore and Indonesia
  • The sportswear maker is expanding aggressively in Southeast Asia, with plans to boost its overseas revenue by 50% annually over the next three years

The running craze in China is slowing after an earlier boom, with the number of marathons dropping to 594 in 2025 from 696 a year earlier, according to the Chinese Athletics Association (CAA). But while China's boom is slowing, Southeast Asia is just getting started with its own massive running events, such as the Kuala Lumpur Standard Chartered Marathon last year, which attracted 42,000 runners.

That shift has sent sports shoemaker Xtep International Holdings (1368.HK) on a sprint to Southeast Asia, where it announced the opening of its first six stores in Malaysia last week, adding to other regional openings in Jakarta in January and Singapore last November. As it expands outside China, the company said it's aiming to grow its overseas revenue by 50% annually over the next three years, from 200 million yuan ($29.3 million) in 2025.

"The six stores (in Malaysia) mark only the start," the company said. "Xtep plans significant further retail growth to build a full running ecosystem across Malaysia and Southeast Asia." In addition to the Malaysian stores, Xtep has opened three stores this year in Indonesia, with plans to continue opening stores in Southeast Asia throughout 2026.

In terms of store count, Xtep is far behind hometown rival Anta (2020.HK), which already has 256 stores in the region, including 60 in Singapore alone, and 1,000 more planned by 2028. China's second biggest sportswear company, Li Ning (2331.HK), started a push into Southeast Asia back in the 2000s, though it still gets less than 10% of its revenues from overseas.

Domestically, Anta and Li Ning are China's leading sportswear brands, with Xtep running third. Many see Anta as a global contender to challenge the dominance of Nike (NKE.US) and Adidas (ADS.DE), with Anta opening its first U.S. store in January this year. But the three Chinese leaders all still struggle with brand recognition outside their home market.

Xtep's global experiment, while still in its fledgling stage, may make it the first Chinese running shoe that is widely known under its own international brand name, which already evokes an athletic image.

High-performance focus

Unlike Anta, which offers a wide range of sports shoes, Xtep sold its tennis and canvas leisure shoe brands, K-Swiss and Palladium, two years ago and now concentrates on running and hiking shoes. In addition to its Xtep brand, the company in 2023 bought out its joint venture that owns Hong Kong, Macao and Mainland China rights to Saucony running shoes and Merrell hiking boots that cater to a more limited market of outdoor enthusiasts.

While the Saucony and Merrell rights do not extend to Southeast Asia, they have helped to bolster Xtep's reputation among more serious athletes, with its own branded Xtep 160X series also winning respect. The company says on its website it has enabled 107 Chinese athletes to claim more than 500 championships in prominent running events.

In its 2025 annual report, Xtep said its shoes were ranked number one among the top 100 Chinese male runners for four consecutive years, and first among the top 100 female runners for three consecutive years. Its brand ambassador, Feng Peiyou, broke a Chinese record and was ranked first among Asian athletes in the 2026 Tokyo Marathon, with a time of 2:05.58, reinforcing Xtep's reputation as a "super shoe" brand. In 2025, the company sponsored 23 marathons in China, and its 71 Xtep Running Clubs had more than 2.5 million members.

Its strategy of positioning Xtep as a brand for serious athletes is paying off, at least among that crowd. Its revenue last year rose by a relatively modest 4.2% to 14.1 billion yuan, with its footwear segment, which accounts for 60% of sales, up by a slightly faster 4.5%. Its profit for the year rose 10.8%, to 1.37 billion yuan.

But those gains were small compared to revenue from its professional sports shoe segment, which includes Saucony and Merrell, as well as its Xtep high-performance running shoes. Its professional sports shoe revenue jumped by 30.8%, to 1.64 billion yuan, accounting for 11.6% of total revenue. Its mass market running shoes grew by a much slower 1.5%, to 12.5 billion yuan.

Growth streak continues

A first quarter operational update released last week continued the winning streak. While Xtep's main brand continued to grow, its revenue from the Saucony brand rose 20% year-over- year. The Xtep brand's average channel turnover was 4.5 months and retail discounts stood at around 25%-30%. Analysts including Guotuo Securities and Shenwan Hongyuan Securities described these as "healthy" levels and maintained their "buy" ratings on the company.

Saucony, which harkens from the U.S. state of Pennsylvania, remains the most successful of the Xtep brands. The brand's first brick-and-mortar store in China opened in 2020 in Shanghai. In December 2023, Xtep bought out its China joint venture with Wolverine World Wide (NYSE:WWW), owner of the Saucony and Merrell brands.

Xtep plans to open its first Saucony store in Hong Kong in May, in its first cautious step for the brand outside Mainland China. Its other steps outside China to date, including the new Malaysia store openings, have all been under its own brand, since it doesn't own rights to Saucony outside Mainland China, Hong Kong and Macao.

One of Xtep's important tools for promoting itself as a serious athletic brand is its Runners Club. It has expanded that concept to Southeast Asia, where the number of members reached over 7,000 in 2025.

Xtep's Southeast Asian advances and the first quarter update failed to wow investors, although 19 out of 20 analysts surveyed by Yahoo Finance rate the company a "buy" or "strong buy." The company's stock is down 17% this year, including a 5% drop since the quarterly update last week. Its price to earnings (P/E) ratio of 8 times is also well below Anta and Li Ning, which both trade at around 15 times.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.