China’s Sports Sector is Shaping Up
The sports and fitness market is warming up in China, stretching the scope for foreign investment across various segments – from sportswear retail to training facilities. Apart from its sheer size, what makes the Chinese market so promising is that its sports and fitness ecosystem is getting an energy boost from all angles:
1. Favourable government policy
The 2016-2020 National Fitness plan, and other sport-specific construction and development schemes announced since 2014, set out ambitious goals in terms of industry development and popular participation. In the run-up to the 2022 Beijing Winter Olympics, the government has pledged to encourage 300 million people to practice a winter sport. Football is another focus sport due to its global popularity, as well as outdoor sports because of their synergy with the tourism industry. By 2020, the government intends to build close to 20,000 new football pitches and 500 km of hiking trails along the Taihang Mountains.
2. China’s new consumer landscape
Chinese consumers are increasingly affluent, health-conscious, adventurous, and interconnected via mobile platforms – especially the country’s 415 million millennials. These changes are working together to make fitness fashionable and are aligning Chinese attitudes towards sports with those of the west. For foreign companies, this indicates growing potential for their branded, higher-end fitness and athleisure goods. Established global brands whose growth has plateaued in mature markets are experiencing double-digit growth and first-mover advantages in China, where the fitness market is still at an early stage. However, being an early entrant into a relatively green market where potential has not yet been confirmed has obvious risks, which is why deep and extensive market research is crucial to success.
3. Corporate investment
Encouraged by government initiatives and a promising market, private corporations are also stepping into the game with investments that boost China’s fitness ecosystem even further. Alibaba’s Alisport pledged to invest US$100 million over the next 10 years in a plan to popularise rugby in China, Wanda Group acquired the organiser of the Ironman Triathlon for US$650 million, and Suning bought a majority stake in Inter Milan for US$307 million. Foreign brands are also changing the sports landscape. Nike’s WeChat-integrated “Run Club” platform and Lululemon’s public yoga sessions are two examples of how foreign brands are helping create sport communities and popularising not only their products but also a healthy and active lifestyle.
China’s sports and fitness economy still has a long race ahead before reaching the performance levels and size of more mature markets. At a retail value of US$28 billion its sportswear market, for instance, is only one third of the USA’s. But the infographic above shows just how quickly China’s sports industry is gathering pace. For foreign players looking for a fast growing, large volume market to fuel their mid- to long-term growth, China is the place to be.
For further insights into China’s sports and fitness industry, or to discuss your go-to-market or expansion strategy, talk to our experts at firstname.lastname@example.org.