Catalog, one of the foreign footwear retailers that is expanding in the Chinese market, opened its first flagship store in Sanlitun Village last month. [Provided to China Daily]

With many international brands looking to tap in to the upper crust of consumers in China, two Western footwear companies are trying to get a leg up on China's middle-class market.

Catalog, a retail chain with the bulk of its stores in Hong Kong and owned by Swire Resources Ltd, launched its first flagship store in Beijing on Oct 19 at the capital's shopping mecca, Sanlitun Village.

Catalog stores sell footwear from a wide range of brands, from Nike, Adidas Originals, Lacoste and Vans, that cost from 1,500 yuan ($236, 169 euros) to 2,000 yuan.

Two months earlier, Minnetonka, a brand based in the state of Minnesota and which produces casual footwear, opened its first store in Joy City in Xidan, one of the busiest shopping districts in Beijing, according to fashion portal yoka.com.

China imported 40 million pairs of shoes through October, compared to 33 million last year. Sales in the footwear market average about 240 million pairs a year, says Wei Yafei, director of the footwear office at China Leather Industry Association in Beijing.

"There is a month-by-month increase of 40-50 percent this year," Wei says.

"Most of the imported footwear brands are targeted at the middle-end market, not the high-end market, as the middle-class in China keeps growing. Although prices of imports are always 300 yuan to 400 yuan higher than domestic shoes, customers prefer the foreign brands," Wei says.

Tam Lai-man, managing director with Swire Resources, says people "care more about a sense of pride, satisfaction and comfort a brand brings about".

"As China becomes more affluent, people's spending power has grown. Chinese consumers, especially those between the ages of 20 and 40, are very keen on getting products from international brands," she says.

Tam says the time is right for foreign companies to expand in China because consumers are willing to buy new and fashionable goods.

"They are more well-informed, they can get more information from the Internet and an increasing number of them have experience living abroad," Tam says.

Swire Resources is a holding company for retail and wholesale brands in sports and lifestyle footwear and apparel with over 180 outlets in Hong Kong and on the mainland. Its stores include Marathon Sports, GigaSports and Catalog stores.

Marathon Sports, which first opened in the early 1980s, is Hong Kong's largest sportswear retail chain.

She says that Swire Resources initially had a rough time when it launched in the Chinese market but has made major inroads since 1994 by serving as the exclusive distributor for a number of international leading brands, such as Reebok, Puma, Champion, Columbia and Rockport.

"We started in the market from a very small base. At that time, cheaper local sportswear brands dominated the market. From 2000, people began to pay attention to brands we distribute," Tam says.

The company's revenue from its outlets in China grew by 30 percent last year. Sales in Hong Kong increased by just 10 percent and total revenue rose by 11 percent to HK$2.14 billion ($275 million, 197 million euros).

"Sales of Columbia footwear were up 36 percent in 2010 compared with 2009. It has become our most popular footwear brand today," Tam says.

She says it is the right time for them to focus more on fashion and higher-end casual shoes. The company has opened 21 Catalog stores in Hong Kong since 2000.

Wei agrees with Tam's assessment, adding that "the influence of local brands doesn't compare to the name recognition that Nike, Adidas and other Italian brands hold. Although local brands have a higher market penetration rate, they cannot compete with foreign brands when it comes to the middle and high-end market," Wei says.

One local company that is looking to tap into China's high-end shoe market is Jinluxuan International Shoes Co, a Beijing-based footwear company that sells several brands from Italy and Brazil.

"One brand can sell more than 500 pairs a quarter. The average original price of our imported shoes is 2,000 yuan, but the selling price in China is higher because of customs and transportation expenses," says Liu Hongxi, Jinluxuan general manager.

Liu says the company will expand in the near future and is planning to open wholly-owned outlets.