social responsibility

Cultivate talents and contribute to society

Empowering and investing in employees has always been at the core of our culture and values. Employees are the driving force behind our continuous innovation and success. At Xtep, we highly value our employees and strive to create a diverse and inclusive workplace where they can thrive.

By actively supporting charitable activities through physical and monetary donations, as well as encouraging employees to participate in volunteer services, our group demonstrates our unwavering commitment to the communities in which we operate. By actively participating in these efforts, we aim to have a meaningful and lasting impact on the communities we serve.

Support the growth and well-being of our employees

We recognize the significant contribution of our employees to the sustainable development of our group. Our group's employee management practices focus on attracting and retaining talent by providing competitive compensation and extensive training opportunities, as well as fostering a culture of care and support. Our commitment is to create a safe, positive, and nurturing work environment where our employees can leverage their strengths and unleash their potential in equal opportunities.

Employee combination

Skilled and talented employees are the cornerstone of the long-term development and success of the group. As of 2023, we have approximately 9100 employees, broken down as follows.

Employee segmentation in 2023

Divided by gender
Divided by age group
Divided by Function
Divided by commission category
Divided by Region

Talent Retention

Our group complies with the Labor Law of the People's Republic of China and the Labor Contract Law of the People's Republic of China, ensuring fairness and consistency in the recruitment and employment process. Our comprehensive employee handbook can cover key issues such as compensation and termination, recruitment and promotion, working hours, holidays, etc., to promote equal opportunities in the workplace. This year, our employee turnover rate is 27.4%, remaining below our target rate of 30.0%, supporting our long-term goal of retaining talent.
We have implemented a fair and competitive compensation and benefits system. Employee compensation is determined based on factors such as qualifications, experience, job scope, performance, and current market conditions. To ensure that our compensation remains attractive, our group exceeds the minimum wage requirement and regularly evaluates market compensation data to ensure the reasonableness of our compensation plan. In addition to the basic salary, we have also launched an employee equity incentive plan aimed at motivating and rewarding long-term career development within the company.
We have implemented a robust performance management system to review employee performance and inform promotion and salary adjustment decisions. The system includes regular conversations between employees and supervisors to obtain valuable feedback. Promotion and salary adjustments are based on recorded evaluation results, and individuals who perform well are eligible for additional bonus incentives. In addition, we regularly conduct talent reviews to identify areas for improvement and recognize high potential employees within the group.
We have established an employee position management system that clarifies each position, including job level, title, and job description, to improve operational efficiency and enhance employee productivity. We have also updated our recruitment management system and internal transfer procedures to optimize talent retention and improve recruitment efficiency.

Employee segmentation in 2023

Divided by age group

Under 30 years old

37.8%

30 to 50 years old

23.4%

30 to 50 years old

23.4%

Divided by gender

Male

27.9%

Female

26.8%

Divided by Region

Hong Kong

3.8%

Taiwan

5.0%

30 to 50 years old

27.7%

Other regions

0.0%

Child labor and forced labor

Our group is committed to labor rights and standards, creating a working atmosphere where all employees feel supported, respected, and able to perform at their best. Our employee handbook also opposes policies of employing child labor and forced labor, as well as other welfare information. This manual outlines our commitment to maintaining an inclusive and transparent workplace, and protecting our employees from discrimination based on gender, age, race, nationality, marital status, religion, and other factors.
Consistent with our commitment to ethical practices, we comply with relevant laws and regulations and strictly prohibit the employment of child labor and forced labor in all of our businesses. To implement this, we implement strict inspection and control procedures in the selection and onboarding process to ensure that underage workers are not employed. We also regularly review their employment practices to ensure fairness and legality. During the reporting period, we did not find any significant violations of labor standards laws and regulations.
In addition to our own business, our commitment to ethical labor practices also extends to our supply chain. When evaluating potential and existing suppliers, our group assesses their compliance with basic labor rights and the standards of accommodation and catering services they provide to employees, as part of our efforts to protect their legitimate rights and interests. In 2023, we did not find any incidents of child labor or forced labor in our supply chain assessment.

Number of incidents of child labor or forced labor in our supply chain in 2023

0

Labor Health and Safety

Protecting the health and safety of employees is our top priority. This year, we have completed and passed the ISO 45001:2018 Occupational Health and Safety Management System (OHSMS) certification renewal to manage and reduce occupational health and safety risks. Our group also complies with relevant standards, laws, and regulations, develops standard operating procedures, work guidelines, and manuals to provide guidance for work procedures and processes.
Our proactive measures towards occupational health and safety are multifaceted, reflecting our firm commitment to providing a safe working environment. We have established goals, standardized procedures, and emergency response plans for identified risks to promptly eliminate potential safety hazards. We also regularly review the occupational health and safety management system to ensure that preventive measures are effective and corrective measures are properly implemented.
Our group has established an occupational health and safety committee responsible for reviewing and regularly reporting on health and safety performance. Each shift has a professional health and safety officer present to inspect whether frontline workers comply with our safety procedures during the production process. All workers will receive a safety briefing before each shift and summarize any potential safety hazards observed during the shift after each shift. This approach can serve as an effective routine reminder to employees to maintain a safe working environment. We have installed bulletin boards and LED displays in our offices and factories to keep employees
We consistently maintain and repair our fire safety equipment, and conduct regular and surprise inspections of personal protective equipment. Special equipment, firefighting equipment, monitoring systems, and machinery will be regularly maintained and upgraded to provide workers with the necessary protective gear. No significant security risks were identified in this year's assessment. In addition, we conduct an assessment of occupational hazards in our facilities and operations every three years, and conduct annual inspections to identify occupational risks. Through these regular assessments and annual inspections, we identify any safety issues in the work environment and ensure compliance with standards regarding potential occupational hazards. No significant security risks were identified in this year's assessment.

Our group has also introduced intelligent production equipment such as automatic cutting machines and computerized sewing machines to minimize occupational risks during production. In response to any potential risks, our company has formulated the "Safety Plan Management Regulations" and "Emergency Plan" to handle possible accidents in accordance with the principle of "no negligence".

In terms of occupational health and safety, we have not found any incidents in 2023 that violate laws and regulations and have a significant impact on our group. Among the 33 work-related accidents that occurred during the year, the majority were commuting accidents that occurred on the way to and from work. All cases have been reported to local authorities for occupational injury assessment and follow-up actions.

Employee segmentation in 2023

Employee segmentation in 2023

Number of work-related deaths (2021-2023)

0

Number of work-related injuries

33

Due to work-related injury losses Number of days

1,858

Employee health and well-being training

To maintain a high level of health and safety awareness, we regularly conduct emergency drills to enable our employees to properly respond to any accidents, strengthen their preparedness work, and identify potential deficiencies in the emergency plan. We also provide job safety and injury prevention training for new employees, internally transferred employees, and rehired employees to ensure they are aware of potential hazards in the workplace. The management of our group will also analyze accident cases together, identify the causes, and develop preventive measures. This year, we also conducted additional occupational health assessments for workers in special positions.
In addition to occupational health and safety, we are also committed to supporting the health and well-being of our employees. Our group provides free health check ups for employees every year to identify potential health issues and boost their work morale. In order to enhance the overall health of our employees, we have launched a health awareness training program that provides health tips such as preventing colds and emotional management.

Training and Development

Supporting our employees and helping them improve their skills is an important component of building a strong and efficient workforce. We value training and development programs to equip employees with practical skills and help them align with our corporate values.

Overall training of our group in 2023 ⁵

Total number of courses provided

1,025Door courses

Total training hours

438,099Hour

Total number of training sessions

1,858Order

Percentage of trained manual workers in 2023 ⁵

Divided by gender

FEMALE100%

MALE100.0%

Divided by gender

Retail staff100.0%

Production staff100.0%

Office staff100.0%
Classified by types of stubborn domestic helpers

Senior management100.0%

General management100.0%

Non management team100.0%

Average training hours in 2023

Divided by gender

FEMALE52.2HOUR

MALE39.2HOUR

Divided by gender

Retail staff247.9HOUR

Production staff1.7HOUR

Office staff64.1HOUR
Classified by types of stubborn domestic helpers

Senior management142.7HOUR

General management155.9HOUR

Non management team43.9HOUR

By exploring various training programs as fuel, our Xtep Talent Center has become a key engine for employee growth and progress, offering a wide range of course options to enhance employee proficiency and productivity. It includes specialized training courses and online training platforms to customize professional development plans, ensuring targeted and effective skill enhancement. In 2023, our online training platform has recorded 3533 active scholars.

Active participants on the Xtep online training platform in 2023 (compared to 2022)

28.29%

The training courses provided by Xtep Talent Center can be divided into the following two types:

Training courses provided by Xtep Talent Center
Professional talent development
Management talent development
894courses
131courses

In addition, we have strengthened cooperation with educational institutions, actively developing new and specialized talents through campus recruitment and community recruitment, and continuously providing an excellent talent pool to support the development strategy of our group. During the year, we will continue to cultivate talents in the footwear and apparel industry through our ongoing cooperation with Beijing Institute of Fashion Technology and Jiangnan University. We will continue to actively engage with educational institutions to discover and attract promising candidates with skills and potential.

Key Training Projects for 2023

The Navigator

The 'Leader' project aims to cultivate the leadership skills of middle and senior executives in our company, with the goal of accelerating their role practice experience and enhancing their leadership qualities. The program consists of four parts: course based training, business topic discussions, post course assessments, and leadership thinking development. By combining classroom learning with performance evaluation, this program helps participants develop skills in key areas such as strategic planning and operational management.

The Navigator

The 'Leader' project mainly invites students to share their stories on special topics. After the offline meeting, further learning will be conducted within each department. Trainees are required to participate in internal departmental training or seminars that integrate practical business operations. These training and seminars are offered in the form of projects on the Xtep online training platform 'XthiHub'. We also organize various group activities to enhance team cohesion, explore corporate culture, and strengthen our core values.

Professional engine

As a knowledge exchange platform, 'Career Engine' promotes the sharing of professional insights within and outside the organization. By linking the operational knowledge of the front-end, middle, and back-end functional departments, we seek to enhance experience sharing and promote employee growth.

This year, the program has launched 11 online and face-to-face courses taught by top instructors, students, and industry experts. A total of 3347 students participated in the course, with an average annual course satisfaction rate of over 92%. The Career Engine Program will continue to synergize professional knowledge across various functions to enhance organizational excellence and maximize knowledge dissemination.

Same frequency resonance values project

In order to integrate the core values of our group into various levels, we have launched the 'Same Frequency Resonance Values Project'. Firstly, seek the opinions of the main leaders to determine common values. Then these values were formalized into a set of guiding principles.

In order to integrate the core values of our group into various levels, we have launched the 'Same Frequency Resonance Values Project'. Firstly, seek the opinions of the main leaders to determine common values. Then these values were formalized into a set of guiding principles.

The follow-up activities are committed to embedding and promoting values in daily operations, such as authorizing certain employees to serve as cultural mentors, holding face-to-face seminars in various offices, and developing online learning modules. Micro videos and daily signings from senior management, as well as 7 selected stories and 20 case studies with themes of 'hard work', 'innovation', 'collaboration', and 'win-win', further embody the values throughout the entire group. By adopting a multidimensional approach, the program has promoted a shared vision and values among all employees at the cultural level.

Key Training Projects for 2023

We are committed to the overall well-being of our employees. From expanding welfare to enhancing cultural initiatives, we aim to create a supportive environment where people can showcase their best selves both at work and beyond.

To improve the health and morale of our employees, we are expanding our employee welfare plan by enhancing existing benefits such as statutory insurance, paid leave, and regular medical examinations. We have also upgraded the staff canteen to provide a diverse range of nutritious and delicious meal options. As part of fostering a supportive corporate culture, we have launched the 'Sunshine Sharing' campaign, allowing employees to share inspiring stories, celebrate achievements, and cultivate a sense of belonging. In order to demonstrate our concern for employee well-being and dedication, we have established various interest clubs to cultivate a running culture.

We hold celebration events on International Women's Day, Labor Day, and other family centered days such as Mother's Day and Father's Day. Through these activities, we have come to realize the different roles that employees play in both their work and personal lives. By recognizing our respective responsibilities, we aim to create a supportive environment that values work life balance. We also give birthday gifts to employees to strengthen our connection with them and enhance our commitment to a supportive culture. In order to help our employees overcome unexpected financial difficulties, we have established an employee mutual aid fund to provide financial assistance during difficult times. This fund helps alleviate the pressure on employees, enabling them to fully devote themselves to their work and ensuring that they can overcome economic difficulties in the event of unexpected situations.

Flexible work arrangements

In order to better adapt to modern work patterns and meet different needs, we have updated our attendance management system and introduced flexible check-in options. Employees can now choose their preferred working hours based on their roles and job responsibilities. We have also enabled remote work functionality, allowing employees to work from home when needed and maintain a work life balance. Through these changes, we aim to cultivate a culture of flexibility and support, making employees feel trusted and able to schedule their time according to their diverse personal and professional needs.

Increase home leave for employees from other provinces

In order to better adapt to modern work patterns and meet different needs, we have updated our attendance management system and introduced flexible check-in options. Employees can now choose their preferred working hours based on their roles and job responsibilities. We have also enabled remote work functionality, allowing employees to work from home when needed and maintain a work life balance. Through these changes, we aim to cultivate a culture of flexibility and support, making employees feel trusted and able to schedule their time according to their diverse personal and professional needs.

Support measures for working mothers

We have taken measures to add nursing rooms in the office and establish a workplace that can accommodate families. These private spaces enable working mothers to meet the needs of their babies on weekdays. Our goal is to create an inclusive workplace where all employees can balance their family and work responsibilities.

Diversity, fairness, and inclusivity

Our group attaches great importance to cultivating a diverse, fair, and inclusive (DEI) corporate culture. In order to strengthen and consolidate these important values, we have formulated corresponding policies in the Employee Handbook and implemented practical measures related to DEI. We are committed to providing equal employment opportunities for all employees, ensuring a fair and transparent recruitment process, and continuously striving to increase the proportion of women in management positions.

Employee feedback is crucial for shaping a diverse and inclusive work environment. We conduct two satisfaction surveys annually to provide feedback from employees on the performance of our human resources and administrative departments. In addition, we strictly abide by the legal provisions that safeguard employees' rights to collective bargaining and freedom of association. We encourage employees to join the company union, which currently has over 1700 members.

To ensure fairness and justice for all employees, we have established a multi-level management team to facilitate communication and coordination between different levels. We have also established a review team to address employee dissatisfaction, which includes members of the human resources department, the complainant's supervisor, department supervisors who have a working relationship with the complainant, and three individuals at the same level as the supervisor. The task of this group is to conduct a fair and balanced assessment of any complaints, in order to maintain a fair and inclusive working environment for everyone.

Proportion of female management

36%

Including general and senior management

Bring positive impact to our society

We deeply understand that the key driving force for sustainable development is fulfilling social responsibility. Therefore, our group has been committed to promoting sustainable growth and meeting social needs through various initiatives that have a positive impact on the communities in which we operate. Looking ahead, we will continue to leverage our corporate strengths and participate in charitable activities.

Promote sports and an active lifestyle

Xtep is committed to enhancing social welfare and actively investing in the communities we serve. We inject vitality into the community and promote a healthy lifestyle through strategic initiatives such as sponsoring marathon events, which encourage residents to embrace a positive lifestyle through recreational running. We also develop innovative running products to provide athletes with upgraded performance products, making an active lifestyle more enjoyable.

Xtep Running Club

To adapt to the increasing health awareness of mainland Chinese residents and the rise of the running trend, we have accelerated the establishment of the Xtep Running Club. As of December 31, 2023, there are a total of 65 Xtep running clubs in mainland China, creating value for over two million Xtep members.

Our club aims to integrate running into people's daily lives, provide professional services, and promote and enrich the running experience. The Xtep Running Club has become an indispensable part of the Xtep running ecosystem, providing comprehensive professional running services, including consultation, support for running groups, as well as mobile device charging, luggage storage, and shower facilities.

Sponsorship for Running Activities

We are well aware of the transformative power of sports in uniting communities and enhancing individual well-being. Sponsoring large-scale running events such as marathons is at the core of our mission to promote a healthy and vibrant society. After the epidemic, these activities have taken on a new meaning - reconnecting communities while encouraging sports and psychological resilience. We are proud to have sponsored 24 offline marathon races for mainland China in 2023.

Marathon sponsored by Xtep

The 2023 Endorphin Elite Half Marathon has successfully concluded

On February 26, 2023, the 2023 Sokoni Endorphin Elite Half Marathon kicked off in Qujing, Yunnan. A total of 36 elite runners are wearing Endorphin Elite running shoes, racing and chasing their running dreams in extreme high-altitude conditions, constantly challenging themselves.

This marathon marks the first step of Sony's "Giant Stone Project", which is part of its 125th anniversary "Gathering Courage" manifesto. This program aims to support young athletes by providing them with top-notch equipment and opportunities to participate in competitions, helping visionary young runners achieve their dreams.

Xtep sponsors Hong Kong Youth Association charity walk event

On November 18th, Xtep, as one of the sponsors, supported the "Youth Charity Walk 2023" organized by the Hong Kong Youth Association. This charity event is dedicated to supporting youth challenges and aims to cultivate them into responsible members of the community. Xtep also invites its employees to participate in the event. Everyday teenagers prepare various stalls to bring positive contributions to society, and the participating employees enjoy it. This initiative aims to help young people become outstanding contributors to society, and Xtep employees actively participate and appreciate the efforts of young people to actively integrate into the community.

Sponsorship of the Chengdu Universiade to support the development of youth sports industry

The Chengdu World University Games have been held from July 28th to August 8th after a delayed rainy year. As the official partner of the Universiade, Xtep exclusively provides official equipment support to help young people achieve their dreams and showcase the power of young people from great countries to the world.

K · SWISS sponsors 2023 Akley Hong Kong Pickball Open

K · SWISS has always supported tennis and has actively promoted and popularized the sport of badminton in recent years. K · SWISS sponsored and participated in the 2023 0akley Hong Kong Open, the largest international badminton tournament in Hong Kong, held on November 5th. K · SWISS provides regular sports shoes for the organizers and guests, and presents high-performance tennis shoes to the winners as competition prizes.

Sponsorship of UBS Hong Kong Family Sports Day, dedicated to promoting healthy living

Sokoni provides sports equipment support for UBS Hong Kong Family Sports Day on October 28th. This event is an important gathering for UBS employees and their families, aimed at promoting healthy living. On the day of the event, there were over 700 participants, and two outstanding athletes, Ou Kaichun and Shi Weixiong, were specially invited to share their inspirational stories. At the same time, the conference also congratulated UBS employee Chen Wenfeng on winning the silver medal in the Roller Skating Island Championships during the event.

Donations and charitable activities

At Xtep, we are committed to operating responsibly and giving back to the communities where we operate. Our group improves our community by fostering a culture of citizen engagement. We actively engage in influential community activities, collaborate with local charitable organizations, and encourage our employees to participate in volunteer activities. In 2023, we donated sportswear worth over RMB 77 million and made donations to multiple community programs.

In 2023, donations worth over

RMB 77 MILLION

Sportswear and cash

Support earthquake relief work in Gansu and Qinghai provinces

On December 18, 2023, a 6.2-magnitude earthquake struck Gansu Province, causing catastrophic deaths and widespread damage in many areas. The disaster occurred in high-altitude areas with harsh climate, severely affecting local infrastructure and services. To cope with the crisis, Xtep donated 20 million yuan worth of warm insulation materials through the China Next Generation Education Foundation to support emergency and post reconstruction work in affected communities.

Assist the Beijing Tianjin Hebei region and Northeast China in dealing with floods

In August 2023, affected by the rainstorm brought by the wind "Durui", flood and geological disasters occurred in the whole northern region of China. To support the disaster relief work, Xtep China Youth Development Foundation donated materials worth RMB 20 million. The assistance provided by Xtep has strengthened emergency rescue operations and laid the foundation for long-term recovery and reconstruction of disaster stricken areas.

Xtep partners with China Next Generation Education Foundation to donate an additional RMB 100 million over the next four years to support the development of young people

For many years, Xtep has supported the "Love Sail" - Special Growth Program through the China Next Generation Education Foundation. This measure aims to promote an active lifestyle and sports development among young people in remote areas. In June 2023, the Group pledged to donate an additional RMB 100 million worth of sports equipment over the next four years to expand this long-term youth sports development partnership and benefit more young people.

Since its implementation seven years ago, our group has donated resources worth nearly RMB 200 million through this activity. This activity benefits over 3700 schools and 570000 students in 20 provinces.

ESG