Over the last years, the country saw a development in its economic situation and a global increase in people’s income. The benefits of sporting have been well communicated with more and more people getting started in the game. With a growing interest from Chinese for a healthy life and healthy body, sporting goods in China represent an attracting market with its 1.37 billion citizens and growing middle-class. A report from the General Administration of Sport of China shows that though most Chinese want to do sports regularly, only one-third Chinese often take physical exercise (currently, there are 32% of China’s urban population participating in a sport).

It is probably caused by the time and site. Now the government has already worked on this and to invest more in sports equipment and boost sports goods market.

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CHINA SPORTING GOODS MARKET

Sportswear is the new fashion in China

Not only for sport, sporting goods and especially clothes, are very popular among Chinese (for both youth and elder). It’s comfortable, practical and a way to show someone’s dynamism and young attitude. Some brands tap into increasingly health-conscious consumers where fitness is a way of life and also an occasion to socialize.

Whether with the influence from Chinese KOLs, the launch of many hip-hop reality shows or the support or the Chinese government, the streetwear or sportswear fashion are both taking ground in China.

Consumption concept and capacity change

With more money and time, Chinese will spend more on sports. It is estimated by the General Administration of Sport of China that there will be 40% of the Chinese population will take sports regularly in 2020 which means 680 million people.

STATUS QUO OF CHINA SPORTS GOODS MARKET

A support from the Chinese Government

Actually, Xi Jinping has always attached great importance to the work of sports and has made important instructions and speeches on it several times. When the Secretary-General, during the preparation of the Beijing Winter Olympics, pointed out that “Strong youths lead to a strong country and strong sports leads to a strong China”.

The Chinese government’s plan to build a CNY 5 trillion (US$ 13 billion) sports industry by 2025, a strategy covering everything from improved fitness to encouraging foreign investment, grassroots sport to elite performance (according to NIELSEN SPORTS). It wants to push towards a more active lifestyle, support people in the country to exercise and improve Chinese’s living quality

Development of cooperation in China’s sports industry

The physical environment and consumer’s enthusiasm for sports in China has driven many investments in sporting facilities by domestic and international rights holders. Alibaba, one of the leading companies in China, specialized on the internet, also takes part in this trend. Alisports, or Alibaba Sports Group, has started last year (June 2017) a new cooperation agreement with The International Ski Federation. The initiative “Get into Snowsport” aims to create 30 million Chinese snow sports participants ahead of the 2022 Olympic Winter Games in Beijing.

At the other side, China Sporting Goods Federation and the International Standards Organization Technical Committee in Sports and Leisure Facilities (ISO/TC 83) made in-depth communication on the status and development prospects of the standardization. Mr. Gabler, the secretary of the sixth group of TC83 brought a detailed introduction about the work direction of the German Standardization Association and put forward more suggestions on the work of standardization of Chinese sporting goods.

They agreed to cooperate in the future, including transforming China’s sports products and service standards into international standard and implementing activities of ISO-related International standards during China Sports show.

 

MARKET SEGMENTATION

In front of such a big market, the first question is when to start the first bite? Here’s two most used “market cuts” for China sports goods market.

Development level

According to development level, China sports goods market can be divided into 3 segments: the first-tier city market, the second-tier city market, and rural market.

The first-tier cities refer to those big cities like Beijing and Shanghai, the market of which has already been well developed. The market here is ready for high class or expansive sports goods and consumers care more about quality and function.

Second-tier cities refer to those prefectural level cities whose population is less than 2 million. Now there are about 600 cities categorized as second-tier cities in China and major growth of urbanization like population and finance growth in China will come from these 600 cities. Then the increase of personal income will also be reflected on the consumption. However, limited by knowledge and access to information, consumers here do not care function or quality or they don’t know how to choose. In another way, they care more about the brand.

Rural market is also developing rapidly, but confined by the low consumption power, it is still a relatively small market.

Age

Divided by age, China sports goods market can be categorized into 3: young people market, middle age people market and old people market.

Young people market means the market for those under 25. In China, 80% sports goods are consumed by them, especially those high school students and college students. People at this age are sports lovers. They are keen on brands and special expansive goods, mostly foreign brands because they are also big face consumers. (See teenager show off consumption).For this category of people, KOLs have a huge influence on them as they are daily connected with them.

Young Chinese can be easily influenced by their peers. Plus, Chinese parents are also famous for their generosity to their kids.

Middle age people in China now seem to be too busy with their work to practice sports. According to the China Youth Daily Social Investigation Center China, only 1 in 4 middle age Chinese practice sports 3 times a week or more.

Moreover, in the traditional Chinese culture, they should care more about their parents and kids. It means a big part of their expense on sports goods is for their parents and kids. However, with the increase in China’s living condition, more and more people want to enjoy life.

Old people market is now getting more and more attention because their consumption habits have changed. They are less sensitive to price and they have a strong desire to compensate themselves. As a result, they begin to spend more on not only clothing but also sports goods. It is foreseeable that as a newly-developed market, old people market will undergo a fast growth in the following years.

The silver economy which is gaining ground in China will be even more important in the future as the life expectancy of people tend to rise and the number of children per Chinese family is in the decrease, consequence of the One Child policy.

POSITIONING OF YOUR BRAND

After knowing the market, the next step is to clear your target, or positioning your brand. Some companies want to copy the positioning of their brands from other countries to China market. Very few times it works. Most companies, especially western companies have to change their positioning when entering the Chinese market. For example, Nike brands itself as “luxury” in the beginning. However, their strategies work quite well.

The key to their success is to understand the market deeply and position their brand appropriately and package their brand surrounding this idea or positioning.

MARKETING STRATEGIES

After getting all the necessary information, it is the time to work a marketing strategy out. The purpose of a marketing strategy is to make customers understand your brand and like it.

SPONSORSHIP MARKETING

In China, most companies launch sponsorship marketing via sponsoring celebrities, ads, a sports show and stadiums. It’s proved that sponsorship marketing can help companies to improve their image, increase their popularity.

It can be sports celebrities such as Yao Ming and Liu Xiang in China now. Nike and Adidas are the leaders in this. Besides sports celebrities, famous people from the entertainment industry or show business are also quite active in this because they have a big community of fans among young Chinese.

The normal way is to take those celebrities as their brand ambassadors or organize some activities with them.

Online marketing

Online marketing has become a must in sports goods marketing because your customers are there. One in three netizens in China are students who contribute 80% of the market. And as the decrease in leisure time, increasing concern about convenience and individuality and demand for the latest information, the internet is becoming more and more important for sports goods makers. With the evolving media landscape in China, several online media platforms are competing for premium international sports rights to build subscriber and audience bases.

For example, you can build an online community with WEIBO. Weibo is one of the dominant Chinese social media platforms. Users are on Weibo to check news, to follow their KOLs (Key Opinion leaders, or Chinese influencers). Some people compare Weibo with Facebook or Twitter, but Weibo remains unique. Whether for international brands’ communication in China or individual branding, Weibo is the best way to gain exposure among Chinese. You can let your targets know you and interact with them, then gather them around you. You can get feedback from them fast from your community, so you can know what they feel about your products, what they like, what’s the trend.

Your project may require an influencer. On Weibo, you can go on a KOL marketing. These internet celebrities often have a huge fan base, and they can support your communication. With our address book, we contact the appropriate KOL for your campaign.

Creating quality and catching contents in the key to reach users and get their follow. We take care of creating your page, regardless of the selected network.  Our team includes effective Chinese staff, who take care of users’ questions and requests online.

SEM (Search Engine Marketing)

Precision marketing is the keyword of marketing nowadays. And for online marketing, SEM stands for precision marketing. According to the data from CNNIC (China Internet Network Information Center), 76.3% netizens are search engine users. Suppose you are the first one of the result tennis racket and there are 100 people preparing money to buy tennis rackets and 76 of them will Google it. These 76 people will see your brand. Compared with the cost of advertisement, SEM is usually more cost-efficient.

Your brand’s visibility and exposure will depend on your search engine optimization. It also gives an image of your brand’s power and credibility for a Chinese netizen.

Wireless Marketing (or Mobile Marketing)

According to a report recently released by Baidu, more users accessing the Internet via a mobile device than PC between 7 to 10 AM in the morning and between 9 to 12 PM at night.  Mobile Internet usage peaks at 10 PM, on the other hand, PC Internet usage peaks at 8 PM. This suggests that mobile netizens tend to be younger than PC netizens and stay up later at night because in China, the younger generation, born after the 1980s, 1990s, usually stay later at the night. And they are the targets.

How to sell in China?

Professional stores

Professional stores usually include two types of stores: mono-brand chain stores and specialty chain stores. The advantage of these kinds of stores is customers can get a direct feeling from those stores. What’s more, companies can control them easily. Having a store can ensure a brand’s credibility among Chinese

However, the increasing rent cost and labor cost keep those medium and small companies away. Moreover, Chinese people now do a lot of shopping online rather than in physical stores directly if it’s not a well-known and well-settled brand like ZARA, NIKE, HM, Adidas…

Website

The website is like your online shop, or sometimes really a shop. It shows the image of your company, or professional, or young, or rebellious… and also a show-window of your products. Or you can also sell your products directly from your website like what Nike does. Having a website, or at least an official account on a trusted social media platform, have become so important that without an official website, a company will probably suffer from credibility problems.

If you decide to create a website, consider doing it in Chinese. This is crucial for at least 2 reasons:

  • Your website will be better ranked on Baidu, the main search engine in China
  • The Chinese online user is more accommodated with the Chinese. Even if there are more Chinese people able to speak English, the majority don’t consult English ages online, because they have so many other sources.

E-commerce platforms

Nowadays, Chinese are more buying online because of the convenience and the great range of available products. There are many e-commerce platforms that you can leverage to create your shop online. TMALL and JD are the most popular and the most trusted by Chinese people for the moment. Some other, like Little Red Book, based on a social-commerce model is also very interesting nowadays.

Being on E-commerce platforms allows you to get a better exposure and to facilitate Chinese consumer’s research for purchasing.

TMALL B2D

Recently, the platform has implemented a B2D strategy (Business to developers) to resolve the problem of China’s distribution. We believe in this new model because of the Chinese market, quite messy until now, will welcome this kind of solution for the future. So, what’s the TMALL B2D? Through a dedicated application, TMALL manages to connect distributors with the brand directly to avoid any intermediate connections. By gathering all distributors, and providing them with the means to connect to the brand, this allows significant gains for all participants (the final customer, as the intermediary distributors) and therefore the success of the product and its brand in China.

This article gives a rough map of China sports goods market. When entering the market, a company will need a lot more details for sure. China’s sporting goods market shows rosy prospects and, it is still at an early stage now.

The digitalization in China is quite difficult to follow but it is offering a lot of new opportunities for business development. GMA is the specialist of Digital marketing in China. We provide your project with effective solution and results. Feel free to send us an e-mail now if you want to discuss your project.

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