Any discussion of China inevitably boils down to the topic of its booming economy. That is, a 40-year success story that’s culminated in the creation of an upper-middle income nation and also the world’s largest consumer economy.
It’s an ascent that Arthur Ang, New Balance Vice President China, feels proud to have been a part of.
“It has been a personal privilege to have spent more than 10 years in China and to witness the incredible transformation with as much regularity and harmonization possible in a continent and country this size,” he tells The CEO Magazine.
“It is still one of the safest, most organized, most digital-savvy countries in the world. And for me to experience that has been great.”
But as the desires and demands of its shifting population have become increasingly sophisticated over time, brands have also had to evolve, Ang explains.
“You must always prove yourself and hold your value in the marketplace with that careful balance of innovation, yet not lose your brand DNA.”
“For a brand to really continue to thrive and to earn the respect that exists in the market, you must always prove yourself and hold your value in the marketplace with that careful balance of innovation, yet not lose your brand DNA,” he says.
“That balance of heritage and innovation will secure again that respect for the brand in China.”
As one of China’s top sportswear brands, Ang says New Balance will continue to focus on exactly that as it pursues the ambitious goal of doubling its business within the next three years.
Deep Connections
New Balance entered China for the first time in 2003, setting up a wholly owned subsidiary there in 2018. Ang was indirectly part of that buzz, having joined the company initially just over 20 years ago.
“I took care of the Singapore market, Malaysia market and gradually the South-East Asia market,” he recalls. “I drove certain projects for Asia and the business was on track and doing well.”
But he yearned for a bigger challenge, and so put his hand up to take care of a larger market – which turned out to be China. “At that time, in 2008, we were taking over the business from a distributor in China,” he explains, adding that he was part of the first team to establish New Balance’s structure in the country.
Despite this, in 2010 he left the business for another opportunity in the same space. It wasn’t until 2015 that he returned to the fold to take care of the footwear division in Australasia, the Asia–Pacific, the Middle East and India before stepping up as the leader of China’s operations in 2018.
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It’s a position Ang felt more than capable to take on, having experienced multiple roles within the company, which gave him a deep understanding of its every facet.
“We get to do a lot of pioneering stuff because New Balance as a company allows professionals to showcase their skill,” he explains. “There’s no doubt that we’re a global company, but there’s a lot of autonomy and a lot of trust given to its people.
“I would say that New Balance is one of the rare romantic, beautiful and soulful companies. I say that because among major sports companies in the world, it is still the only one that’s family owned; privately owned.”
Ang further points out that New Balance still has its own factories, with five in the United States and one in the United Kingdom.
“Family values are deeply embedded into the company culture,” he says.
Sudden Obstacles
These family values proved to be a greater asset than anyone could have imagined during the COVID-19 pandemic. While Ang threw himself into his new role wholeheartedly, it wasn’t long until he and the company faced a challenge, the likes of which had never been seen before.
But he was swift to act, highlighting those company values as a guiding light during those tough times.
“Our people are and will always be our number one priority,” he says. “So in many regions, and definitely in China, we were the first to make that decision to shut our doors and protect our people.”
He then began trying to source protective equipment for his entire workforce, with masks and disinfectant instantly in short supply as the crisis kicked in.
“I had the fortune of having friends in the pharmaceutical industry and I managed to get masks from Canada. Made in China, but shipping from Canada back to China,” he says with a laugh.
Indeed, he succeeded in procuring 20,000 masks, which the company went on to distribute not only to its own people, around 800 of them, but also to its distributors and key accounts. “A lot of people think they’re just customers, but for us it’s one big extended family,” he says.
“I would say that New Balance is one of the rare romantic, beautiful and soulful companies.”
With shoe production pushed to the back burner as the world went into a state of shock, New Balance thought outside the box.
“We were innovative and creative enough to make masks out of materials that were meant for shoes,” he says. “I actually kept one as a memento. It’s pretty impressive.”
These were shared among those in need all around the world, along with goggles, disinfectant and more.
Within China, Ang and his team put in place a rigorous schedule of daily and weekly catch ups with every single staff member to make sure that everyone was coping.
“The people got even closer,” he says. “It was tough, but we got into a system and everyone became so supportive.”
“We get to do a lot of pioneering stuff because New Balance as a company allows professionals to showcase their skill.”
This positive impact is still being felt, according to Ang.
“Our company grew during the pandemic years and we actually outperformed the industry and our expectations during 2021, and even 2022 when China was still going through shutdowns,” he says.
“It’s because of the resilience and the teamwork, which is part of the fabric of the company and the culture. Crisis really brings out the essence of true leadership. And I don’t speak for just myself, I think every individual in our company demonstrated that.”
Last year was the best year in New Balance’s history in China, despite the various difficulties that have impacted the market in recent times, he reveals.
“Not just in scale, but the quality of the business, operating performance, operating profit margins were the highest in history. Even our retail discount marketplace and our ecommerce arms are the best in the industry.”
True Partnership
The entire business supply chain ecosystem has been critical for New Balance in achieving this positive picture in China, Ang explains – even as relationships were put to the test.
“Even though we have our own factories, the majority of our products are made with our partner factories and the last three years have been extremely difficult for them,” Ang says.
“But our company values are teamwork, integrity and total customer satisfaction, and these apply to our people, our partners and our consumers. So for our partners, when the crisis hit, our procurement sourcing team immediately went in to help as much as we could.”
Though times were undeniably tough, New Balance’s China operation tried to secure as much as it could on the procurement side while still being a good partner.
“What’s most important is also the understanding that because it’s so labor-based and human resource intensive, things were delayed or things were incomplete, but we never gave up on them,” Ang says.
“When business rebounded, those bonds were even stronger, almost unbreakable, because we’ve gone through a crisis together and people know that we have helped each other.”
Instead of stalling operations, the crisis triggered a tsunami of work, mostly around supply chain as the company attempted to help its factories level load their capacity and understand the delays.
“Business was bad across the world and in many regions, but for us as a company, we knew that we had enough structure, capacity and resources to take in more than we needed because if we didn’t do that, the factories would obviously suffer a little more.”
From this unprecedented time, the business emerged fortified thanks to this approach, according to Ang.
“When business rebounded, those bonds were even stronger, almost unbreakable, because we’ve gone through a crisis together and people know that we have helped each other. We’ve gone through not just the good times, but the bad times together.
“That’s true partnership,” he says.
Head and Heart
His own approach to leadership has also proved critical with Ang, a firm believer in leading by example and doing so in an authentic way.
“You also have to show not just your fearlessness in leading, driving new directions and innovation, but your vulnerability – that you are not perfect,” he explains. “Then the true understanding of you, not just as a business leader but as a people leader, will shine through.”
It’s also crucial, in his view, to extend this approach not just through the upper echelons of management but throughout the organization.
“It’s important to have the ability to connect with people at all levels, all roles; to have the ability to break through and talk to them face-to-face and to be able to understand what they’re going through and support them,” he says.
“A leader is not just there to guide the business. A leader has a responsibility to mentor and build the next generation.
“That concept is always close to my heart because we are only as strong as our team and our team is only as strong as the opportunities we give them to learn and shine.”
Ang says these are learnings he has gained over the course of his own career as he looks back on the opportunities he himself received from his own mentors along the way.
“A leader is not just there to guide the business. A leader has a responsibility to mentor and build the next generation.”
“They understood who I am – the good, the bad and the ugly – because they got to know me as a person and gave me the opportunity to learn, to succeed and even to fail.”
While success is the ultimate goal, he stresses that true leadership encompasses the ability to put events into context and understand the scope.
“You have to allow the team to make mistakes while you, as a leader, ensure that the structure and enterprise can afford that mistake. I think that’s really important,” he says.
“I have a principle that you run the business with your head but lead your team with your heart. That’s how I do it.”
Power in Culture
When it comes to spreading the word, New Balance again places great emphasis on the power of its own people.
“We believe that the individual pride of the company is the best marketing tool in the world,” Ang says. “Power is always from within the company. You achieve a certain level of success when all your associates in the company are your brand advocates and they truly believe in what they do.”
He strives to ensure that every one of its company associates becomes a brand custodian with a profound commitment to love and protect the brand.
This is where leading by example, once again, comes in.
“The leader has to showcase the passion for the brand and for doing the right things, and having the determination to always set forth a direction and hold that line to achieve that goal,” Ang says.
“You achieve a certain level of success when all your associates in the company are your brand advocates and they truly believe in what they do.”
He employs the ‘three H’ approach – head, heart and hands – in doing this.
“It means that people understand the goal and the vision,” he says. “It’s not that difficult in terms of the approach, but the consistency of application requires a lot of discipline.
“You’ve got to be fearless, but you also need to be able to demonstrate yourself as a person and people truly understand you and then the culture will be formed. That’s how I see it.”
Now, even as New Balance works toward its three-year targets for the Chinese market, Ang is quick to point out that the focus is not purely on numbers.
“The priority is always on quality growth and not purely on upping the scale, because the true essence of a company is to have sustainable, positive and quality growth. That’s the beauty of growing a brand. If the brand is strong, the business will come,” he says.
“Which is why at New Balance, we’re very proud that we’ve been around since 1906. Not many companies can say they have a history over 50 years and ours is more than a hundred years, so it’s something that motivates us to continue to build forward.”
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