China’s sportswear industry should see continued expansion over the next few years, with the segment proving to be resilient amid the country’s challenging retail environment due to shifting consumer behaviour and preferences for more differentiated shopping concepts, says Fitch Ratings.
Both international and local brands have benefited from the expansion of China’s sportswear industry, which Fitch accredits to increased investment and higher sports participation, following the issues of store overexpansion and excess inventory having been resolved since 2012.
The State Council aims to develop China’s sports industry to CNY5 trillion by 2025 and increase the area available for practising sports. Greater interest in fitness and sports has also become more clear, with more people taking interest in running, for instance, the China Daily reports that a total of 328 marathons were registered through the Chinese Athletic Association in 2016, attracting approximately 2.8 million participants, and representing an increase of 85 per cent compared with the previous year.
The China market is led by international brands Adidas and Nike. Adidas reported over 20 per cent constant currency growth for China in 2016 and Nike also saw double digit growth in Greater China. However, Fitch believes local brands can also benefit, as they offer a competitive value-for-money proposition to consumers.
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Fitch sees sufficient room for industry growth. Expansion could moderate slightly in 2017 due to a higher basis of comparison, but greater product differentiation and diversification into new sports areas could help brand development. Brands are also developing new categories, including outdoor and winter sports. Beijing won the bid to host the 2022 Winter Olympics, which could spur interest in related sports.
