Outdoor Equipment Market in China - Speeding Up - Daxue Consulting

15Jul2015

Outdoor Equipment Market in China – Speeding Up

Matthieu David
Blog Market research China Brands in China business intelligence Clothes market in China Fashion in China Foreign products in China Health China Life of the Chinese consumer in China Market research China Retail in China Sport in China
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Outdoor equipment retailers in China have seen a significant growth in these last few years. As the Chinese are getting more aware of the importance of a healthy body, practicing sports outdoors is becoming increasingly popular. Before 1990, outdoor equipment retailers didn’t really exist in China, but last year the total sales for retail outdoor equipment reached $20.08 billion. Mountain sports, for example, have become the trend as they are associated with the strength and value of nature, a characteristic greatly valued (almost nostalgically) by China’s heavily urbanized population. Today, China accounts already more than 700 climbing clubs.

Outdoor equipment retailers are generally promoting outdoor sports as the best way to “reduce pressure and release oneself”. This positioning is aligned with the general Chinese trend towards a healthier lifestyle and higher personal development or achievement. Outdoor equipment retail covers: sporting clothes, sporting shoes, sporting balls, sporting equipment, exercise equipment, protective sporting goods and other sporting goods. In 2014, outdoor equipment sales grew by 11.28%, and outdoor equipment worth $11 billion was shipped.

Outdoor equipment purchasing trends

Every year the sales of outdoor equipment increases on average of 47.33% in China. This trend has been going on for many years and has lead some cities to reach large amounts of outdoor equipment retail: Beijing has the largest amount of independent retailers in China. Surprisingly, Xi’an comes right after with close to 100 retail stores. Our Daxue Consulting reports shows that local outdoor equipment brands are increasing a lot faster than foreign brands. This is partly due to the large percentage of foreign outdoor equipment that is already produced in China. Amongst outdoor equipment, clothes and shoes are performing three quarters of the sales. As they are the first step towards getting equipped for outdoor sports. Then the Chinese acquire more knowledge concerning particular sports and buy more specific Sporting good equipment.

Local brands are seeing an impressive growth outdoor equipment sales growth and are betting on their own market. However, just like the Vitamins and dietary supplements market, foreign brands hold the large majority of the market. About 70% of China’s outdoor gear market are attributed to foreign brands. The two top players in China for the outdoor gear market are Colombia with 19.9% and The North Face with 14.0% of market share. Also, foreign outdoor equipment retailers mainly come from Europe benefiting from the image of professionalism and

Development of the outdoor equipment market in China

Today outdoor equipment tends to be bought in independent stores, people enjoy going to specialised stores and having real professionals discussing products characteristics. Decathlon is growing fast in China and is planning to expand even more with the Chinese market. Our report showed that 76.8% of outdoor equipment companies plan to invest more next year while only 16.4% of them plan to maintain the same amount of investment. This illustrates the imminence of the rising market, in addition to this the Chinese government is installing longer and more frequent Holidays that will increase time for hobbies and travelling. The government will soon be requiring over 110 days off every year. Currently Eastern China is accounting for 43% of the outdoor equipment retail which is coherent with the level of development of China.

Outdoor equipment retail is shifting fast towards online retails, there are 618 million Internet users in China and 90 per cent of them use social networks. To this amount, 193 million Chinese regularly shop online and their number is expected to reach 350 million this year. Websites used by the Chinese are the same as usual, Alibaba with Tmall and JD are seeing the largest sales and offer a specific reseach button for outdoor equipments.

Outdoor equipment retail new competition: Chinese manufacturers

In China local brands are growing a lot faster than foreign ones. A current trend in the Chinese market is local manufacturers are launching their own brands after having learnt from the large multinationals such as Adidas and Nike. At the end of 2013, there were close to 900 different outdoor brands in China, out of which 458 were Chinese local ones. Local brands such as Toread, Kolumb, Camel, Kroceus, Jihua Outdoors, Anemaqen and Shehe are becoming particularly popular and building larger market share these years. For example, Ozark was a manufacturing outdoor equipment for foreign brands for 15 years. Today the company decided to launch its own brand within the Chinese market as it suggests large growth opportunities. The largest local company specialised in outdoor gear is Toread, it is already ranked 3^rd in China outdoor equipment and its sales growth have been around 54% over the last 3 years. Camel and Kolumb also are expected to expand significantly in the coming years. Focusing on the Chinese market will be rewarding in the future since as as Ozark CEO said: “Outdoor sports are still very new in China so we have a growing market for many years to come.” and competition in less strong than in the US and Europe.