Treading the hard path

Toread hopes to grow profits by building its own niche in china with top-notch outdoor sports gear

Sheng Faqiang dislikes wearing a suit or a tie, even on formal occasions such as a prize-giving ceremony. The founder of Toread, a leading homegrown outdoor brand in China, sits down with China Daily at his typical chairman-style office in Beijing - a spacious room with large floor-to-ceiling windows and a view of a 24th floor - wearing T-shirt and sneakers made by his company.

"Wearing them shows my confidence in my own products," says the 42-year-old in purple striped T-shirt and a pair of black Toread fast-dry sneakers featuring breathable fabric. His everyday wardrobe is full of similar gear, he says.

Sheng's confidence has a solid foundation. The average 50 percent of annual growth in revenue over the last 10 years makes Toread not only a star among domestic outdoor companies but a serious competitor to international outdoor giants such as Columbia Sportswear and The North Face.

Sheng, with a relatively thin figure, may not look like the prototype athlete but he is one of the pioneers of China's outdoor industry. He entered the business in 1995 when China barely had an outdoor industry.

His connection with the industry started with tents, he says. He worked in geological prospecting after he graduated from college in 1993, and had to spend a lot of time living in tents.

He had a comfortable job with the Ministry of Railways, but he quit in 1994, dissatisfied with working for other people.

"I simply didn't want to follow instructions from the upper level. I wanted to be my own boss."

With the spirit of an entrepreneur, he had been busy looking for business opportunities until he found a foldable tent. The tent could be compacted into a small package, which the former geographical prospector felt held huge business potential.

However, selling tents to people who had no idea about the fun of camping was no easy task in China in the early 1990s. Sheng started to showcase his tents at all kinds of exhibitions, transferring from retail to wholesale.

"We ran from exhibition to exhibition. We reached Harbin in the north and Shanghai in the east. You could even find us at exhibitions in northwest Urumqi and southwest Kunming. We were everywhere," he says, adding that it was a difficult time for starters like him. He was not only a businessman, but also a salesman and a deliveryman.

With the money he made from the tent business, Sheng finally founded his own company in 1999. When he registered his company at the Beijing Administration of Industry and Commerce, there was no such category named outdoor sports.

"We had to register our company under the category of traveling supplies at the time," he says. But entering an industry at such an early stage gave Sheng's company many advantages.

With China's booming economy and the growing awareness of a healthy lifestyle, the outdoor industry has surged over the last 10 years, reaching 7 billion yuan (756 million euros) in 2010, according to the China Outdoor Commerce Alliance.

"Toread actually caught up the best chance to get into the industry," Sheng says. His company's products have expanded from tents to clothing, shoes, gear and equipment since 2003.

The company landed orders worth 482 million yuan for next year's spring and summer products at its purchasing fair that ended in early July, 66 percent more than in 2010. Before Toread was listed in late 2009, Sheng had promised investors that by 2014 the company would enjoy annual sales increases of a mere 40 percent.

Toread is the only listed company among the 229 China-born outdoor brands. Since its listing in 2009 on ChiNext, China's Nasdaq-style board for domestic startup firms, the company's market value has jumped to about 4 billion yuan from the initial capital of 500,000 yuan in 1999.

The listing has helped fill Sheng's war chest to boost the company's research and development, which has long been a shortcoming in Chinese outdoor companies.

The design and innovation team at Toread has 60 professionals and recruits five to 10 new minds every year. Most of their designs are based on the concept of environmental protection. For example, hiking shoes with soles made from used aircraft tires are coming soon from their design desks.

A lab with 50 types of equipment was founded in Toread in 2010. Fabrics and products are tested again and again so customers get nothing but high-quality professional outdoor gear.

Sheng places huge importance on top-notch quality, saying buyers will be using the company's products in extreme weather. "The quality is our promise to people's life," Sheng says.

Toread has been the exclusive gear supplier for China's North Pole and South Pole expeditions since 2009, but Sheng knows that his company still has a long way to go. "Western companies have decades of experience in this field. They got the best technology and design. That is not something we can achieve in short term."

He says Toread will not expand to overseas markets in the next five years because he sees no opportunity in countries with a well-developed outdoor industry.

"'Made in China' don't have many advantages in prices now. Plus, innovation, technology and design are not something we are good at. There is no reason for us to go into Western countries."

However, the entrepreneur side in Sheng emphasizes that the root-in-China strategy is only suitable under current circumstances.

"It is very wrong to think you will lose when competing with other people's advantages. Just give it time to improve and grow."

The chairman of Toread is not a tough guy at outdoor sports - he is more into swimming and tennis - but with outdoor business he is in there with the sharks.