Opportunities and challenges facing Chinese youth in sports training

In September, China reported record-breaking financing this year for children in sports training, with Doing Now raising 500 million yuan, led by Yao Capital, a private equity firm founded by former NBA superstar Yao Ming and other investors. This is yet another signal that the sports training business continues to grow rapidly in China.

Founded in 2010, Doing Now is a sports training service provider for children aged 4 to 17. Their services cover various sports like basketball, soccer, badminton and fencing. The sports training company has also attracted more than 10,000 children to its upcoming teenage sports league. In addition to this, Doing Now has nearly 1,000 venues throughout China. With about 3,000 coaches, the company has a presence in 18 Chinese cities, serving nearly 1 million students and parents.

Doing Now is one of many players in the Chinese youth sports training market. According to a Deloitte report, China’s K12 education market has reached 180 billion yuan and is expected to reach 500 billion yuan by 2020. Open data shows the general education market in China consists of three pillars—art, sports and academic training, while sports training has become a more than 100-billion-yuan segment in the sports business market for China.

As the government has displayed a stricter attitude recently towards education centers, some institutions have decided to take steps toward diversification. That is to say, they also set foot in the sport along with offering traditional cram courses for academics and by offering classes related to sports like football, badminton and fencing. 

For example, as Deloitte introduced in a 2017 report, some educational institutions in Guangzhou have already partnered with the Guangdong Star Football Club and Dong Hu Qi Yuan to seek their support with teachers, venues and other business aspects.

In addition to traditional educational training institutions, professional sports training businesses have sprung up like wildflowers in the past two years. From the start of 2016 to August 2017, 24 related start-ups have completed first-stage financing, half of them focusing on soccer and basketball while others concentrating on swimming, baseball, tennis, table tennis, American football and scout training. 

“Clients can enjoy our services paying about 100 yuan per course here, while our location in Xujiahui area, Shanghai charges 150 yuan per course,” said the operator of a Wuhan-based Taekwondo gym, “the one-on-one coaching program cost more than 500 yuan.”

According to Chen Le of Changjiang Times, a typical Taekwondo course costs at least 70 yuan in Wuhan of Hubei Province, which means that parents have to pay no less than 5,000 yuan for one year of instruction. Therefore, the huge market potential has attracted many investors, as there are currently more than 1,000 similar gyms in the most populous city in Central China.

The increase in demand for improving Chinese children’s fitness also provides great opportunities for the sports training market, said Ma Cong, General Manager of Chongqing-based Zuolin Youshe Sports Training Company. 

However, fewer Chinese parents are willing to let their children endure training routines in professional schools, while most of them hope that their children can play some sports as an after-school hobby.

“Putting aside the drawbacks of campus sports education, Chinese students are clearly facing fitness problems due to academic pressure, unhealthy lifestyles and other factors... The good news is, China has put emphasis on the sports industry including sports training business. The recent policies released by the government will give more confidence for sports training companies.” Ma added.

It is also worth mentioning that parents in the big cities and developed regions have shown a strong interest in expensive sports like golf, tennis, ice hockey, fencing and equestrian sports because they want to prepare for their children’s potential overseas study in the future.

Meanwhile, Ma pointed out that the problem is, there are only a few companies can do well in both professional and commercial sides. 

As Gao Shanshan, Founder of Heromond (Beijing) Media Co., Ltd and head of Changjiang Sports League, said, “There are so many sports in the industry, so it is not easy to build a unified standard like the internet or real estate industry have done. Each sport has its own standard, so the demands for specific training companies are different accordingly.” Gao continued, “But China is striving for a better industry model, which provides huge opportunities for start-up businesses.”

Proofread by William Logsdon