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All-Star debut for Chinese shoe company

Jeff Gross/NBAE via Getty Images

NBA player JaVale McGee dunks two basketballs at the 2011 Sprite Slam Dunk Contest in Los Angeles, CA.

BEIJING – You may not remember what type of shoes NBA rookie sensation Blake Griffin was wearing when he raised the trophy above his head after winning the slam dunk contest at this past weekend’s all-star festivities, but chances are you will remember what runner-up JaVale McGee had on.

For that, Chinese shoe brand Peak Sports must be positively ecstatic.

The Fujian based sports apparel company took advantage of the star-studded weekend to make its official U.S. debut and was blessed with a remarkable stroke of good fortune when JaVale McGee, a player with the Washington Wizards, made it all the way to the finals.

Between each dunk, McGee changed into a new pair of sneakers and each time the camera dutifully got in close and showed them off to the television audience back home. Even the annoyance of having to sit through the process of watching the lanky 7-footer lace his shoes up four times became buzz-worthy for Peak as NBA commentators, Charles Barkley, Kenny Smith and Reggie Miller were left to fill dead air time by talking about what was on TV at the moment: the shoes.

It’s probably a sure bet that Xu Zhihua, CEO of PEAK Sport Products Co. Ltd will forgive the trio for calling his company’s shoes, “runner-up shoes,” or asking if they were “the Chinese version of PF Flyers.” After all, his product is not the first to ever be called out by the TNT team and for a shoe company that has been around since 1989 but has virtually no traction in the U.S. market, publicity is publicity.

That is of course, unless a future Hall-of-Fame coach calls your shoes “concrete boots” and holds them responsible for a player’s plantar fasciitis

But don’t underestimate Peak’s current position as newcomer to the saturated American market. The company has been aggressive in signing NBA players to sponsorship deals, counting fifteen current athletes on its roster including players like Jason Kidd, Jason Richardson, Shane Battier, Dorrell Wright and Kevin Love.

Kevin Love, in fairness and partial rebuttal to coach Phil Jackson, was wearing Peaks when he scored 30 points and grabbed 30 rebounds in a game earlier this season.

At first glance, it would be easy to look at Peak’s entrance into the market as a potential long-term threat to major players like Nike, who sponsors over 100 current NBA players, brings in $1.7 billion yearly in basketball related revenue and owns a dominant 86% share of the U.S. basketball footwear market.

However, it would seem that Peak’s gambit into the American market is in fact a challenge to fellow Chinese competitor, Li Ning, who over the last few years has looked the part as China’s dominant sports apparel company. Though still the leading sportswear maker in China, Li Ning suffered through poor fourth quarter earnings, sparking a 15% drop in share price even as a bevy of local mainland competitors like Peak and Anta announced healthy profits.

Peak Sports may make a lot of noise about breaking into the U.S. market, but the numbers betray its true loyalty to China’s mass market. Credit Suisse has suggested that as much as 74% of Peak’s revenue came from the booming mainland and a rapidly urbanizing population.

It is possible indeed that Peak plans to do battle with Li Ning abroad in the hopes of one day eking out standing in more developed markets like the United States, but it would seem in the short-term, Peak’s aggressive play for the hearts and minds of NBA players is effectively helping the company primarily chip away at Li Ning’s market dominance back home.