A government-backed campaign to encourage healthy living is helping give Chinese sports brands traction again in the domestic consumer market.

After three tough years with the slowing economy and over-expansion following the Beijing Olympics in 2008, the brands are ready to compete again, thanks to cutbacks in store networks and more choice in online sales channels.

When Beijing was preparing to host the Olympics, sportswear companies began to expand aggressively, with leading brands adding nearly 1000 points-of-sale each every year between 2007 and 2011, according to Hong Kong brokerage and investment group CLSA analyst Dawei Feng.

However, sales were undermined by cheap knock-offs and competition from expanding overseas fashion chains such as H&M, Uniqlo and Zara.

Between 2012 and 2013, China’s biggest sports brand Anta closed 900 shops across the country. Also cutting stores from 8255 to 6133, Li Ning became profitable last year after three years of losses.

Anta has been working with its stores on marketing, says Bloomberg Intelligence analyst Catherine Lim. It also started a children’s brand after China scrapped its one-child policy.

Anta, which holds distribution rights to the Fila brand in China, is the official sportswear sponsor of the Chinese Olympic Committee.

China’s five publicly traded sportswear companies have a combined market value of about $9.4 billion, or less than a 10th of Nike, the world’s largest sporting-goods maker.