Sports in China: the world’s second largest sports industry
Published: 07 Apr 2015
The Sporting Goods Industry China report 2015 is the most complete research report ever published about the Chinese sporting goods market.
Compiled in partnership between EDM Publications, EMLYON Business School and organisers of ISPO, the world-leading conference in the sports industry, the report provides critical information on trends and best practice for the industry of sports in China, as well as invaluable insights from Chinese consumers and organisations. As the second largest sports industry in the world, many sports organisations have been slow to take advantage of the huge potential of this market. This report aims to help brands to define their strategy and avoid costly mistakes when attempting to penetrate this complex, booming market.
THE FIRST SGI MARKET STUDY ON SPORTS IN CHINA
The report methodology is largely based on documentary research, interviews with nearly 250 leading sources in the industry of sports in China, as well as the findings of a unique survey of more than 500 Chinese customers of Intersport, including their sport participation, purchasing habits and favourite brands in different sports categories.
The report covers topics including demography, society and economy, sports participation, market size and leaders, market approach and retail structure in the Chinese sports goods market. The report also analyses the Fitness, Running, Team sports, Action sports, Snow sports and Outdoor sports categories in China, reviewing the infrastructure, participations, market size and development, market leaders, specialist retailers and marketing characteristics for each sector.
A team of students of the MSc in Sports Industry Management programme contributed to research for the report during their semester studying at the EMLYON campus in Shanghai. Students were asked to provide information on specific points of the report through a combination of desk research and interviews with several executives in sports companies and stores, as well as attend the China Sport Show and ISPO Beijing events to conduct interviews and provide analysis. Students of the sports master’s programme delivered analysis on several parts of the final report, as well as interview transcripts and company profiles.
Sports in China: Key Trends of the Report
MARKET SIZE, DYNAMICS AND ISSUES
• The International Monetary Fund’s 2014 figures showed that China had the largest economy in the world, beating the US for the first time in history in terms of purchasing power parity. Whilst China’s GDP nearly doubled in the five years to 2012, growth is expected to slow, with the government focusing on more sustainable increases in disposable income.
• Chinese consumption only made up less than 35% of China’s GDP last year, with economic expansion over the last decade coming mostly from exports and infrastructure investments. The government aims to increase this to 40% by 2020 to support growth through consumption – a good sign for sports in China.
• Sales in the sports goods industry in China enjoyed double-digital growth rates as a result of the overall growth of the Chinese economy, the growing middle class and urbanisation, as well as investment by sports organisations.
• Participation in sports in China remains relatively weak due to limited infrastructure, lack of training resources and a very strong focus on academic achievements.
• However, sports participation has become a priority for the Chinese government: in a statement in September 2014, the government announced a deregulation of sports events; a bold statement in the context of China’s culture.
• Although implementation of projects has so far been sporadic, the report suggests this will have a positive medium-term impact.
SPORTING GOODS RETAILING & DISTRIBUTION
• China’s sporting goods market features an abundance of Chinese brands, at odds with many other developing markets and an important consideration for those striving to penetrate this market. As an example, the sports apparel and footwear industry has become highly concentrated, with two Chinese retailers Belle and Pou Sheng jointly accounting for 15,200 stores. The report provides successful examples of retailing and distribution in sports in China.
• Decathlon entered China in 1998, but other multi-brand sports retailers entering the country has been comparably slow. However Sports Depot, Intersport, Sportmaster and Xebio are now starting to open their Chinese stores.
• The report shares how brands can address the specific requirements of Chinese consumers, adapting to different regions and the purchasing power of the environment around the stores based on insights from brand owners over the last twenty years.
• Fitness is one of the categories that has benefitted most from the government’s increased emphasis on physical activity, with the number of gyms and gym memberships, although still low, growing at a great speed.
• The running category is still underwhelming due to air pollution and limited infrastructure, although the number of people registered for running events is soaring as running is considered by the Chinese audience as an aspirational urban lifestyle.
• Basketball is the most popular sport in China, with an estimated 300 million Chinese people enjoying the game. There has been a significantly reduced interest in football as a result of limited infrastructure and poor results.
• Both the Outdoor and action sports sectors are growing fuelled by lifestyle choices, with the outdoor category particularly tripling in size in the last 5 years. The report provides detailed analysis of the dynamics, challenges and leading players in these categories.
Why study sports in China?
As the second largest sporting goods market in the world, it is critical for the future leaders of the sports industry to have a firm understanding of how to do business in sports in China and the requirements of today’s modern Chinese consumer. The aim of the MSc in Sports Industry Management is to provide participants with an excellent understanding of the sports industry through education, work experience and networking, therefore fully preparing them to take their first step into the sports industry. This is why students of the MSc in Sports Industry Management spend one semester studying at EMLYON’s Asian campus in Shanghai to learn the specifics of the Asian sports environment in depth, with modules including Asian Business Environment, Sports Industry Markets and Marketing, Issues in Sports Industry Business in Asia, Negotiation Seminar and Global Sourcing in Asia.
Students of the programme also complete an In-Company project for a sponsor company in China, such as the market strategy of an Asian organisation, building qualitative market research on Chinese consumers or helping companies with their strategic expansion plans. The 2014/2015 cohort will work on In-Company Projects with international sports organisations including Decathlon, Puma, The North Face, Oakley, Salomon, Julbo and adidas China and benefit from many networking opportunities from day one thanks to the programme’s partnership with the Outdoor Sports Valley.