China is becoming a very attractive market for the sports industry. The Chinese government has set a goal of 20% annual growth for the sports industry in the country until the 2022 Olympic Winter Games in Beijing.
According to government data, by the end of 2020, the total turnover within China’s sports industry will amount to more than US$ 460 billion. In 2015, the total output value of China’s sports industry was US$ 58 billion.
Understanding the Chinese sports market
Half of the Chinese population – about 700 million people – are buying sports products. These are a lot of consumers for international and Chinese brands. And the number is still growing.
The country has a population of 1.4 billion people. An increasing middle class is hungry for sports and leisure activities. More than 415 million millenials are ready to consume sports products.
900 million e-commerce shoppers
China is the second largest e-commerce market for sports and outdoor products. In 2020, an estimated 900 million Chinese consumers will shop online and /or by mobile. Upto 70% of Chinese consumers born after 1995 prefer buying products directly via social media than other channels. The global average is 44%.
70% look for high quality
By 2020, 70% of Chinese consumers will belong to the middle (55%) or high end (15%) market segments. One billion consumers will be asking for superior quality products, which is three times the number of all of the consumers in the Europe and the USA combined.
70,000 new soccer fields
By 2020, 70,000 new soccer fields will have been built. The new pitches will cover an area larger than 750 square kilometres.
A unique way to enter the Chinese market – B2B2KOL
665 million consumers in China are on social media. 50% use social media to do product research. Influencers, or as they are called in China – KOLs (Key Opinion Leaders) are extremely powerful. They are heavily influencing purchasing decisions.
Chinese consumers are wary to trust brands they don’t know. They rely heavily on the opinions of KOLs as well as their social networks. Online shopping in China is a social affair, boosted by the fact that you can seamlessly buy and pay for your desired items, all on social media without leaving the apps. According to Cyril Drouin of Bostong Consulting Group “If you don’t have a KOL, you won’t sell in this market.”
The exponentially growing Chinese market is attracting a large number of international sports companies.
Important trends of the sports business in China
E-commerce, running, sports for children, women in sports, are some of the important trends in the Chinese market.
Running has huge potential in China
The number of marathons and running events increased by 150% between 2015 and 2016. In 2016, 2.8 million runners participated in racing. That’s 180% more than the previous year.
The most popular sport among athletes in China is running. Nearly 100% of those who do sport in China are also into running. From 2016 to 2017 the turnover in the running market in China rose by 25%.
In 2017, the sporting goods market with running products was valued at US$ 6.32 billion. Five million pairs of running shoes are sold in China every year. And, 80% of all shopping journeys have a digital touchpoint.
And the number of athletes in China in general is expected to rise. Today about 400 million people exercise. This number is expected to rise to 500 million by 2025.
Chinese women spend more money on sports
According to an ISPO survey, “Although Chinese women, in contrast to men, statistically speaking, do less sport, they spend more money on sportswear and training lessons. This shows the great potential that the Chinese market with sports goods for women offers.”
Large market potential in children’s sports
In addition to the female athlete, the market for sporting goods for children has enormous potential: according to the study, around 90% of Chinese parents invest around 300 euros per year in their children’s active leisure activities. In light of the growing population, this development is of huge significance for the market.
Crossover of chic and functional sports fashion
Athleisure products with a high lifestyle factor are seeing stronger and stronger demand. These collections are still largely new for the Chinese market. This includes items like multifunctional clothing that can be worn in the office or when working out. Discerning customers also value the use of highly technical, highly functional fabrics such as 4-way stretch.
Anyone who wants to be successful in China cannot ignore online trading, which is an important part of digitalization. The country is the largest e-commerce market in the world. Three-quarters of Chinese buyers also buy sports products on the internet. In 2017, retailers made 17% of sales online. By 2020, this share is to expected to rise to 25%.
The New Fitness Trends in China: CrossFit and HIIT
Trend sports like CrossFit are booming, and small boutique gyms are competing with the big chains. “Commercial gyms have only been around since 1995, so the entire industry is really only a bit more than 20 years old,” says Lou Zhang, founder of FPM-China, which specialises in training managers for gyms. “Right now roughly 5% of the population is working out in gyms in Tier 1 and Tier 2 cities, while in the rest of the country it’s a maximum of one percent,” says Zhang. “There are about 26,000 gyms in all of China, whereby only 10-15% of the members go work out four to five days per week.” The trend is increasingly pointing towards smaller, better equipped boutique gyms, with extra classes for yoga, CrossFit, & pilates.”
Business success in China calls for good distributors
Good distributors are key for foreign manufacturers’ business success in China. That is why the most important goal for many companies like LNDR, Ayris, and Gola is to find distributors. The sports shoe brand Gola has been carefully planning its market entry in China for some years now. “Right now establishing contacts is about quality, not quantity,” says Brand Manager Wayne Howarth.
Adidas, Nike, and Schöffel look for innovations tie-ups
International brands like Adidas, Nike, Umbro International, and Schöffel have been attending ISPO Shanghai, looking for product innovations and start-ups with creative ideas.
Primaloft wants to expand its growth to China
Primaloft is known the world over as a specialist in insulation materials and as an ingredient brand in sports and outdoor products produced by famous manufacturers.
For Jochen Lagemann, Managing Diretor of Primaloft, Europe and Asia, the company’s growth in China has really only just begun: “We started out serving the market for several years maintaining only a low-key presence on site, however two years ago we opened a branch in Xiamen and set up a local team. We also have a well-established distribution system with a sales team in Shanghai and are planning to expand our China team further.”
Scarpa caters to China’s needs
The Italian shoe specialist Scarpa was established in 1938, expanding to Scarpa China in 2013. Joe Chen has since been the branch’s resident Marketing Manager. Said Joe, “Initially, an on-site team handled Scarpa’s distribution. After restructuring the team a little, we felt it was necessary to set up our own branch in China in order to better understand and control the market and to maintain a higher level of consistency within the business.” Of course the Chinese also buy high-tech shoes, he says, but “from on-site experience, I can tell you that their requirements differ significantly from those of our Italian customers. For example, our products have a far more ubiquitous purpose here in China. They are also seen as more of a lifestyle product. So we have adapted our portfolio accordingly here, selling far more lifestyle/multi-function shoes.”