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

With the broadcast rights to Chinese top tier soccer league officially being sold for RMB8bn in Beijing yesterday, the dramatically growing sports industry in the country has once again triggered the conjecture about the emergence of sports business giants.    

In last article, we’ve given a brief introduction about China’s government-oriented sports reform and the potential to tap the rising sports industry in the country. In this part, we’re about to look at different sectors where big sports brands could likely appear.

Prior to making an analysis on potential of Chinese sports brands, the likes of world’s leading sportswear provider Nike or sports media giant ESPN have told the stories of big players in sports business sector. But despite the global awareness and influence, top sports clubs, such as Real Madrid FC, can’t simply match with those commercial giants in terms of equity value. As for sports agencies, which is vital to sports business though, it is still hard to find an example of RMB100bn+ brand in that area.  Moreover, it is similar case in the perspective of sports venues.

Here in China, we’re expecting giant players to emerge from the following areas: sports media, sports hardware providers (including sports goods) and service providers.

Sports media play a crucial role in sports industry chain, providing platform for sports events and amplifying the values of these events. Undoubtedly, China’s sports broadcast market is still in its infancy, lacking an enormous platform like ESPN which occupies large proportion of market share.

However, with the values of sports contents significantly rising in the country, some of those capital-backed media brands which have heavily spent on media rights to global major sports events, such as Ti’ao Power or Letv Sports, are likely to have a great role to play in the domain of sports media in the coming years.

Apart from sports media, sports equipment providers could also take advantage of the opportunity resulted from Chin’a rising sports industry alongside the way paved by the unprecedented 2008 Beijing Olympic Games. With the efforts to focus on domestic market segment and even overseas expansion, some sports goods brands are expected to bloom in a way.

Moreover, sports-related services, fitness particularly, will dramatically boost the sports consumption in the country with the help from the emergence of Internet. China has around 3.9 million registered people who work out in the gyms and fitness market in the country approximately value at US$2.1bn. Considering the population and the rising concept of healthy lifestyles, we would likely see an explosive market of fitness.

In addition to fitness, other services including sports tourism alongside sports-related trainings and sports lotteries would play their role as part of the plan to establish RMB5 trillion sports industry in China.

Overall, amid the rising sports favor in the country, both governmental supports and capital have roles to play in developing sports in general and more importantly in tapping the goldmine of the emerging sports industry in China. As mentioned, the country is expected to witness the rise of some domestic sports brands from youngsters to giant players in sports business.