China’s Sportswear Market: Opportunities for Foreign Investors

China’s sportswear market is about to develop into the world’s largest, propelled by authorities initiatives, altering tendencies, and rising well being consciousness. We talk about the sportswear market tendencies and distinctive challenges and alternatives for overseas stakeholders in China.

Sportswear retailers have turned their consideration to China, and for good causes. Authorities initiatives, altering trend tendencies, and rising well being consciousness among the many Chinese language center class are key elements contributing to remodeling China into an ideal marketplace for sports activities attire. Though the US continues to be the most important marketplace for sportswear worldwide with a market measurement of US$45 billion, its growth fee is just 2.5 p.c. However, the Chinese language sportswear market is increasing at a approach larger compound annual development fee (CAGR) of above 9 p.c. 

China’s sportswear market overview

In 2021, sportswear retail gross sales in China reached RMB371.8 billion (US$51.9 billion), or 13.4 p.c of the nation’s attire market.  The marketplace for sportswear in China is anticipated to develop at a CAGR of greater than 9 p.c by 2025. Over 2 p.c of the Chinese language sportswear market fell off between 2019 and 2020, but it surely recovered with appreciable development between 2020 and 2021.  

In 2020, sports activities attire held the best market share, adopted by sports activities footwear and sports activities equipment. The vast majority of sportswear gross sales in China had been made on-line: shops, web retailers, attire, footwear, and accent specialists on dwell streaming had been amongst the highest distribution channels.  

Gross sales in China’s sportswear market elevated by 53 p.c between 2017 and 2019, from US$31.5 billion to US$48.34 billion. After a slowdown in 2020, the market reached US$51.9 billion in 2021. Nike and Adidas, with their sturdy native model Anta, continued to dominate the market. Since 2017, Sketchers has risen to the fourth spot, adopted by native model Li Ning, which occupied the fifth place in 2021. 

With a inhabitants of 1.412 billion and comparatively sturdy spending energy, China holds nice potential to develop into the most important sportswear market worldwide. 

Key segments

Sports activities attire, sports activities footwear, and sports activities equipment make up the three predominant segments of the Chinese language sportswear market. The share of sportswear within the attire market has been rising between 2015 and 2020 and is anticipated to maintain increasing over the following few years. 

• Garments: Girls’s sportswear is predicted to broaden on the quickest fee all through the projection interval (2020-2025), whereas males’s sportswear is predicted to develop on the slowest fee. Kids’s sportswear was the preferred sort of sportswear in China. Throughout the 2020–2025 interval, womenswear is anticipated to broaden in worth by greater than RMB 90 billion (US$12.5 billion), whereas menswear is anticipated to develop by greater than RMB 50 billion (US$6.9 billion). Lively sportswear dominated the market in 2021, adopted by technical sportswear and informal clothes with a sporting theme.  
• Footwear: Between 2021 and 2025, the sports activities footwear market is projected to broaden at a CAGR of greater than 9 p.c, reaching a worth of greater than RMB 150 billion (US$20.9 billion). Girls’s footwear, males’s footwear, and kids’s footwear made up China’s sports activities footwear market. Girls’s footwear is predicted to broaden on the quickest fee in the course of the forecast interval and kids’s footwear will develop on the slowest fee. Throughout the interval of 2020–2025, it’s anticipated that the worth of males’s footwear would improve by greater than RMB 20 billion (US$2.7 billion) and that of ladies’s footwear by greater than RMB 30 billion (US$4.1 billion). Lively sports activities footwear dominated the market in 2020, adopted by technical and sports-inspired informal footwear. Based mostly on exercise, basic exercise sneakers accounted for the most important portion of sports activities footwear in 2020, adopted by sneakers for basketball and operating. When it comes to worth, the highest sports activities footwear manufacturers in 2021 had been Nike, Adidas, and Li Ning. 
• Equipment: Between 2021 and 2025, the sports activities equipment class is anticipated to extend at a CAGR of greater than 9 p.c, reaching a market worth of greater than RMB 50 billion (US$6.9 billion). Purses, sun shades, hats, scarves, gloves, belts, and different equipment make up China’s sports activities equipment market. Of those, gloves are predicted to broaden on the quickest fee all through the forecast interval, whereas hats will improve on the slowest fee. In 2020, purses accounted for the most important portion of sports activities equipment in China, adopted by hats and sun shades. The preferred sports activities accent class in 2020 was sports-inspired informal put on, which was adopted by energetic and technical sports activities accent classes. 

Important promoting channels

In line with the QuestMobile report, sportswear manufacturers spend greater than half (58.1 p.c) of their social promoting finances on Douyin Adverts, adopted by WeChat Adverts (9.6 p.c), Kuaishou (7.6 p.c), Weibo (4.9 p.c), and Tencent Video (4.2 p.c). 

Understanding the expansion of China’s sportswear market

Favorable demographics

The demographics of China make it an incredible marketplace for sporting merchandise. Its inhabitants consists of the most important center class on the earth and 415 million millennials. With a rising inhabitants of younger staff with comparably excessive disposable earningss and a bent to have interaction in additional leisure actions, together with sports activities, there’s a sizable marketplace for activewear. The variety of gymnasium memberships within the nation has doubled since 2008, and simply two years later, there have been over 100 marathons held as a substitute of simply 51. 

Authorities investments

The Chinese language authorities has been actively selling bodily exercise amongst its residents. By 2025, Beijing desires to see the nation’s sports activities financial system attain US$850 billion, making it the most important on the earth. With the aim of changing into a key participant within the soccer sector, China has already elevated the variety of soccer fields within the nation from 50,000 to 70,000.  

The federal government has created a five-year health plan that may spend money on sports activities and health services as a part of its efforts to fight the rising incidence of well being points like weight problems and diabetes. The plan known as for US$225 billion in federal spending by 2020 and is focused at youngsters to advertise wholesome existence all through their lives.  

Moreover, Nike and the Ministry of Training are working collectively to boost youth bodily schooling within the nation. 

Elevating well being consciousness

Throughout the epidemic, shoppers determined to train extra, spent extra time at residence, and have become extra involved about their well being. In a analysis produced by CBNData on Chinese language health and well being tendencies, 76 p.c of respondents indicated they’d begun to pay extra consideration to train and had been extra able to be energetic after the pandemic. The time they spent on health and train purposes (apps) elevated by 250 p.c in the course of the pandemic, which naturally additionally pushed additional the demand for athletic attire and kit. 

Rising manufacturers

Rising companies have been wanting ahead to carving out a place for themselves within the Chinese language sportswear sector. The Canadian athletic attire firm Lululemon serves as an excellent instance, because it was in a position to seize a selected client market with its useful merchandise due to the rising recognition of sports activities like yoga and pilates. The model’s footwear division skilled a 42 p.c improve in internet income in 2021, far above its opponents.   

However, Allbirds and Patagonia, two manufacturers famend for utilizing eco-friendly supplies of their merchandise, have gained recognition amongst extra environmentally acutely aware clients. 

Key tendencies in China’s sportswear market

Athleisure

Athleisure is a fast-developing development in China, similar to in lots of different areas around the globe. Activewear is progressively being acknowledged as common apparel and thought of appropriate for events outdoors of strictly sports-related ones, together with weddings and the office. Overseas firms like Nike and Adidas, which dominate and account for one-third of the Chinese language sportswear market, at the moment are seen as high-end trend gadgets. In addition they held a bonus for a very long time over home opponents due to their model recognition and perceived high quality. Each manufacturers had been in a position to have a considerable impression on girls’s trend tendencies in China. 

Sports activities attire and footwear are among the many high sellers

Information studies that t-shirts and sports activities pants are an important classes for attire when it comes to income, accounting for 25,2 p.c and 21,4 p.c, respectively, of all sportswear gross sales. Nonetheless, these basic subcategories already face stiff competitors.  

Sports activities bras and sports activities t-shirts are two different specialised classes that displayed glorious development charges. These areas are price contemplating for future funding, although their gross sales income continues to be comparatively minimal (lower than 5 p.c of whole gross sales). 

Rising demand for native manufacturers

The rising curiosity in native manufacturers is one intriguing development we’ve seen. Younger Chinese language shoppers have grown up in an surroundings of fast financial improvement and a robust attachment to their nationwide id. The place older generations would have chosen overseas manufacturers over home ones because of high quality consideration, this view has now shifted. Younger clients pay extra consideration to different options. 

Chinese language merchandise had been previously seen to be unattractive and of low high quality. One rationale was that many Chinese language corporations tended to make use of a grassroots technique, starting in lower-tier cities, and shortly establishing their in depth distribution community there. They compromised high quality to attain a scale financial system, which was made attainable by the substantial inhabitants in lower-tier cities. Nonetheless, as extra Chinese language corporations labored to replace their model picture to capitalize on the increasing center class and the premiumization development, they expanded their profile to develop into extra upscale. Quite a few home automakers and cosmetics firms which have raised their profiles to incorporate upscale merchandise function examples of this.  

In consequence, the perceptions of home manufacturers are shifting due to Chinese language manufacturers’ collaborative efforts and rising cultural assurance. For instance, within the make-up trade, Lancôme is among the many top-selling luxurious make-up manufacturers in China. It was in a position to gasoline its success due to focused advertising campaigns, and collaborations with each overseas in addition to Chinese language celebrities. The same development and rising religion in home manufacturers have gotten seen in China’s sportswear market. 

Innovation utilized to sportswear

Efficiency trainers are some of the dynamic subcategories in China’s sportswear market, with present worth development of 23 p.c. This isn’t stunning, contemplating that almost all sportswear corporations are well-known for his or her footwear. Main gamers out there massively spend money on the creation of recent merchandise whereas keeping track of technical development. Nike, for one, has pioneered the adaptable shoe lacing system with its HyperAdapt line of sneakers, which electronically conforms to the curves of your foot to supply a tailor-made match. The Chinese language firm Anta invented A-FlashFoam know-how, perfected to supply the foot nice cushioning and assist throughout operating.  

Sportswear textiles have additionally superior alongside revolutionary footwear, significantly amongst boutique sportswear corporations. As an example, Columbia not too long ago marketed in China its athletic attire with Omni-Warmth Thermal Reflective Expertise. Different firms, like Patagonia and Allbirds, catered to the specialised demand for eco-friendly materials concentrating on their particular area of interest. 

How can overseas gamers breach in China’s sportswear market?

Youthful shoppers now have a rekindled feeling of nationwide pleasure, which has led to extra indigenous firms coming into the market as cheaper alternate options to abroad ones. Additional, the highest influencers in dwell streaming extra continuously promote home manufacturers. To determine a extra direct and intimate reference to Chinese language shoppers, international manufacturers should localize greater than earlier than.  

Nike is the right instance of a localized branding technique that works to focus on native shoppers extra successfully. In 2020 Nike debuted ‘The Nice Chase’, its first Lunar New Yr commercial, at first of the yr. After simply two weeks, the commercial obtained 4.8 million views on social media. 

Differentiated branding is prone to develop into extra essential, although the performance continues to be a key consider sportswear buying choices. That’s to say when the vast majority of sportswear manufacturers are in a position to meet the necessity for performance, what the model presents is related to their goal clients and is prone to be a deciding consider client choices. Since most manufacturers have been promoting by way of e-commerce channels or selling by way of social media platforms, this necessitates extra individualized connections between manufacturers and their focused segments.