China’s sports reform and brand-new opportunities: Part I

In an interview with the Reuters, Chinese President Xi Jinping once again expressed his keen hope for the growth of Chinese soccer ahead of his state visit to the UK from October 19-23. And domestically, it has taken China over a year since the country outlined a national sports reform plan with objectives to release the potential of the untapped goldmine of sports industry.

What has happened in the sphere of Chinese sports industry since last year, or the first year of Chinese sports reform?

Reform and potentials

To start with sports reform outlines, China included sports industry promotions as a national strategy, highlighting mass sports alongside competitive sports for the first time. For the secondary market, the core of the reform largely concentrates on the objective of RMB5-trillion sports market.

As time ticked, more and more listed corporations began to build their presences in sports sector since the beginning of 2015, which resulted in brand new capital floods into the country’s sports industry. And not long after the quick response from keen entrepreneurs, China’s soccer governing body in March issued an overall reform plan to boost the development of the sport. In July, Beijing together with Zhang Jiakou triumphed in bidding for the hosting right of another Olympic event, the 2022 Winter Olympic Games. And following the soccer reform plan, Chinese Super League (CSL), the top tier soccer league in the country, departed with Chinese Football Association (CFA) in August to take a more market-oriented approach.

However, it is not until the pricy move for the rights to the CSL that we’re more convinced by the explosive force of the potential of Chinese sports industry. The effort, made by a Beijing-based media company named Ti’ao Power with RMB8 billion, set a landmark in the course of the emerging sports market which is empowered by the ongoing government-oriented sports reform.   

Sports goods play a major role in Chinese sports industry, occupying 75% share of the market. This also marks China has great potential in promoting the other areas of sports business though the country is long troubled by the lack of high-profile domestic sports leagues or events. However, the likes of CSL and CBA have made big improvement and growth over the past few years. Moreover, neither the big five soccer leagues in Europe nor the major four sports leagues in the US would jeopardize the communication space for China-based sports IP to grow thanks to Chinese people’s ‘home basis’.

Additionally, China needs to ‘work hard’ in order to catch up with advanced countries in terms of the average shared space of sports venues per capital. Despite the experience of hosting global major sports events, such as the Olympic Games in 2008, alongside relative rich in the number of big stadiums and venues, the country is still urgently needed in smaller venues and community fitness centers. Luckily, Chinese government has addressed the goal and approach to promote mass sports by 2025.

In Part Ⅱ, we are about to make an analysis on the China’s sports market where RMB100b sports brands could likely emerge.