2017 Year in Review: Potential in China’s mass sports market

In 2017, China’s mass participation sports market showed great potential. 

First, national fitness has become an important part of Chinese sports reform. In April of 2017, the General Sport Administration of China (GSAC) launched a plan for the year’s cause for national fitness, which included a public sports service system, sports leisure towns, combining sports and medicine, sport plus and internet plus national fitness. This shows how China is highlighting the guidance of governments, coordination of departments and public engagement in the national fitness market.

Against this background, local governments have started to grow their local sports industry by improving sports facilities and providing allowances for local residents. For example, the Beijing municipal government decided to give out sports consumption coupons for individuals, with the aim of increasing the development of the local public fitness.

From looking at online sales, the subscription model developed dramatically while the pay-per-view method still has much space to develop in China. For instance, since Super Sports Media launched an updated subscription model in summer 2017, the company attracted up to 100,000 members on the first day while the new members within 20 days outnumbered that within 3 months in 2016. Media companies also adopted similar strategies, as Tencent launched a pay-per-view model around their NBA content.

In the offline sector, mass participation events including marathons welcomed a new wave of upsurge. In 2017, there were 1,100 marathon races held in China, as the entire industry generated revenue of 70 billion yuan, representing an increase of 20% from the previous year. The country also held self-made marathon events by combining professional services with traditional culture, the Run China Series, for example.

Notably, sports enthusiasts were also given opportunities to participate in professional events. There were 126 events in 19 sports added to the 2017 National Games, which included table tennis, badminton, mind sports, Tai Chi softball and square dancing.

In addition to this, China also underwent a recognizable growth in sports consumption, while consumers focused on the quality of sports products as well as the professional services of sports retailers. According to a report on internet sports consumption conducted by JD.COM and Nielsen, sports that reflect quality life, like fishing and cycling, saw an increase in sales. Interestingly, many people started to wear different shoes in different sports, which contributed to the sales growth in hiking boots, running shoes and basketball shoes. Some technology-based products, including cushioned shoes and road bicycles, has increasingly drawn public attention.

However, we have to admit that participation rate of sports activities is still relatively low in China. As the JD.COM report shows, only 6 provinces and cities have a more than 40% participation rate, as Beijing ranked first place because about 50% of the local population has participated in sports activities.

Therefore, sportswear brands believe that China has become an even much fiercer battleground for mass consumption.

In the second and third-tier cities, most consumers tend to choose what they can afford. However, when bored by a limited high-quality shopping experience, they would like to spend more on better products and services. So their next choice is a dilemma: an international brand like Nike or a domestic brand like Li-Ning or Anta?

“Refusing to change means death. There was a distance between customers and us because we had been the wholesaler. So, there is no hesitation to make a change,” said Ding Shizhong, Chairman and CEO of Anta Sports, referring to the company’s rebranding from a wholesaler into a direct-to-consumer retailer. 

Although Anta and Li-Ning are still expanding their locations, some domestic brands have diverted their attention to online shopping, as 361°and Xtep are reducing their number of physical stores. Some experts point out that on the one hand, e-commerce is stealing sales from physical stores. While on the other, international retailers like Decathlon have experienced rapid development throughout the country.

To sum up, it is clear that the mass sports market is maturing, and that Chinese brands should focus their specific target customers, provide services that are more professional and avoid homogeneity to preserve their differences. The only catch is the increasing passion for mass participation events will give Chinese sportswear brands more opportunities in the domestic market.

Proofread by William Logsdon