China Sporting Goods Market

Status quo of China sports goods market

Sports goods have now become the sixth expense for a Chinese family. A report from General Administration of Sport of China shows that though most Chinese want to do sports regularly, only one third Chinese often take physical exercise. It is probably caused by the time and site. Now the government has already worked on this and to invest more on sports equipment and boost sports goods market.

The motivation of the market

Rapidly-growing economy


Although slowed down by the global crisis, China GDP still keeps increasing at 9.2% in 2011.
Big sports events
Beijing Olympic Games also boosts people’s passion for sports. What’s more, a series of big sports events in the following 3 years like National Games of China and Games for university students also help more people to enjoy sports.
Consumption concept and capacity change
With more money and time, Chinese will spend more on sports. It is estimated by General Administration of Sport of China that there will be 40% of Chinese population will take sports regularly in 2020 which means 680 million people.

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.

first tier city in China

first tier city in China

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 brand.

second tier city of China

second tier city of China

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)
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 China Youth Daily Social Investigation Center china, only 1 in 4 middle age Chinese practice sports 3 times a week or more. And in 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.

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 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.

Positioning of your brand

After knowing the market, next step is to clear your target, or positioning your brand. Some companies want to copy their 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 Chinese market. For example, Nike brands itself as “luxury” in the beginning. However, their strategies work quite well.
The key of their success is to understand the market deeply and position their brand appropriately and package their brand surrounding this idea or positioning.

Marketing strategy

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.

Professional stores

professional store

professional store

This kind of stores usually includes two types of stores: mono brand chain stores and specialty chain stores. The advantage of these kinds of stores is customers can get direct feeling from those stores. What’s more, companies can control them easily. However, the increasing rent cost and labor cost keep those medium and small companies away.

Hypermarket

It is a kind of market which many sports goods companies inside. The advantage of it is customers can have more choice at the same time and relatively competitive price. So it was supposed to be attractive to customers. However, customers don’t buy it. It fails probably because sports goods consumers are usually young people. Young people are more sensitive to fashion and brand instead of price.

Sponsorship marketing

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

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

lx nike celebrity sponsorship
Normal way is to take those celebrities as their brand ambassadors or organize some activities with them.

TV ads
There are plenty of articles about this. And now there are some other ways to do that. For example, some companies like Kappa sponsor some movies to put their placement ads in them.

Big sports events
As mentioned before, China now is undergoing a “big sports event boom” from Beijing Olympic Games in 2008; China has now held three world-class sports events: Beijing Olympic Games, Guangzhou Asian Games and Shenzhen World University Games. Many other cities also following this trend: Youth Olympic Games will be held in Nanjing in 2014; China National Games will be held in Shenyang next month and countless games like world tennis games, basketball games…
In this situation, most sports goods makers are considering how to do big sports events sponsorship. Now there are mainly three ways to do it:
1. Official sponsorship
It’s the most direct way of sponsorship marketing. In this way, a company can increase its brand visibility greatly during the Games. However, it cost a lot which is beyond most companies and its effect is suspected by more and more people, especially after the failure of Addidas in 2008.
2. Undercover sponsorship
This solution is developing very fast in China. More and more sports goods companies now turn to undercover sponsorship. It allows their brands appear in front of consumers unconsciously. For example, the logo on sports equipments for sports delegation.

But the most famous undercover sponsorship sample was Li Ning’s promotion on Beijing Olympic Games: the boss of the company, Li Ning, lighted the Cauldron as the symbol of China sports.
3. Media sponsorship
The cooperation with mass media such as TV, magazine or newspaper is also an important type of sponsorship. Like official sponsorship, media sponsorship also helps a lot to promote popularity of a brand.

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 of leisure time, increasing concern about convenience and individuality and demand for latest information, internet is becoming more and more important for sports goods makers.
Here are some suggestions for using it:

1. Community
The main purpose of building an online community around your brand is to have a group of people seeing, checking, trying and talking your brand. And then those who are already professional in your products will share their experience with others, or “outer community”, and influence them.


The mostly used platforms are SNS and blog. Don’t forget the most popular SNS in China: Weibo. On these platforms, 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.

2. SEM (Search Engine Marketing)
Precision marketing is the key word 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.

3. Website
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.

nike online store

nike online store

Website has become so important that without an official website, a company will probably suffer from credibility problems.

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

This article gives a rough map of China sports goods market. When entering into the market, a company will need a lot more details for sure.

Do you want to develop in China sports goods market? What’s your target in the market? What strategy you will take?

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