Potential for exponential growth in Chinese sports industry

A Chinese consortium led by media mogul Li Ruigang has agreed to invest US$400m (around £265m) into City Football Group (CFG) for a stake of over 13% in the controlling group. 

This deal will certainly do a great deal to further the sport in China, with the English Premier League side expected to set up football academies and a franchise in China, similar to its family teams in New York and Melbourne.

But it seems that the news didn’t arouse as much attention as it might have. If it had happened several years ago, the news would have created quite a stir in the Chinese sports industry but now people are used to hearing of such happening every few days. 

Li Ruigang’s is not the only company which has unveiled plans for its sports business. Chinese billionaire Wang Jianlin is another one of the many who are tapping into the Chinese sports industry. 

Wang, chairman of the Wanda Group, announced plans to build the “world’s most profitable sports company”, Wanda Sports. It will have an annual income of over $10 billion following its successful takeover of several overseas companies, including most recently Infront Sports & Media and the World Triathlon Corporation. 

Wang said, “We plan to keep merging and adding new content to our sports branch. Wanda Sports aims to become the world's first sports company with an annual income of more than $10 billion.”

Wang's comments came after the Chinese government mapped out a plan last year, aimed at growing the country's sports sector into a $813 billion industry by 2025. Wang said, "If the goal is realized, sport really will have become a very promising industry."

However, for now, China's sports industry is still in its cradle, as shown by the results of a national survey recently released by the China Institute of Sports Science. 

The survey shows that 39.9 percent of respondents spend money on sport-related products such as equipment, trainers' fees and sportswear. This manufacturing-centered consumption pattern indicates that China's sports industry remains in its infancy.

Jiang Chongmin, a senior researcher at the institute, said, "It suggests that the growth of the sports industry in China is still relying heavily on the manufacturing sector, a situation that lags behind world sports powers like the United States."

Lin Xianpeng, a sports industry professor at Beijing Sport University, said, "More than 70 percent of the value in the sports industry in the United States is generated by pro-competition businesses. Compared with the U.S., we have a huge gold mine, with an immense number of potential business opportunities that have yet to be exploited."

Sport is now becoming the focus of attention in China with more and more Chinese local authorities and investors outlining their sports business plans. I believe this massive, yet relatively untapped, market has the potential for exponential growth in the future.

Source: yibada & chinatopix

Proofread by John Devlin