Fitness first

If you're exercising on a machine to improve your physique while reading this, chances are it was made in Xiamen

Many people know Xiamen for its exotic foods, great architecture and mild climate. In the past decade, it has been ranked as China's "most suitable" city to live in and as its most romantic. But under this relaxed, leisurely charm on the surface beats a strong industrial pulse, pumping its way to economic success.

The manufacture of fitness equipment is Xiamen's forte. The city is a global power in this field, with one in every three treadmills in the world made in the East China coastal city, and shows no sign of running out of steam, if Xiamen municipal government data are anything to go by.

Xiamen, the second largest city in Fujian province, was one of the original four Special Economic Zones set up on the Chinese mainland during the early 1980s, and received heavy investment initially from entrepreneurs in Taiwan and Hong Kong.

China produces up to 60 percent of the world's fitness equipment, most of it from Xiamen, home to more than 80 fitness equipment enterprises and more than 500 sporting goods-related factories.

In 2011, the city's manufacturers accounted for up to $650 million worth of fitness equipment exports, a quarter of China's total exports of fitness products, and last year saw an annual increase of 30 percent, according to the Xiamen Entry-Exit Inspection and Quarantine Bureau.

The development of the industry in Xiamen is based on earlier business links with Taiwan, only a short distance away across the Straits. Taiwan's close economic relationship with the United States then provided opportunities to many entrepreneurs on the island.

The US, which generates 40 percent of the total market demand, is still the biggest fitness equipment consumer.

When costs increased in Taiwan a decade ago, many factories and business started moving to cities in the mainland. Xiamen, which shares the same dialect, a similar climate and a good transportation system, has attracted most investments, and perhaps more importantly, the leading high-tech experience and standards set by manufacturers in Taiwan.

Many related businesses also gathered in the city, attracted by the growing industry.

When profit margins in fitness equipment exports shrunk following the world financial crisis in 2008, and other manufacturing bases in Zhejiang were losing money, entrepreneurs from Xiamen were able to stay above water with their high-quality products and muscled their way to the fore.

The Xiamen government played a big part in supporting the development of the fitness equipment business.

Among six Xiamen administrative districts, Tong'an district recently approved the setting up of an "exported fitness equipment quality and safety demonstration area" for its well-developed cluster of manufacturers. Tong'an alone contributes about 10 percent of China's total fitness equipment exports.

"We are the link between local companies and foreign markets, so we can better understand the business policies in overseas markets as well as the manufacturing situation in local factories," says Fang Zhijie, deputy director at the Tong'an branch of the Xiamen Entry-Exit Inspection and Quarantine Bureau.

The office also organizes seminars and training to help companies meet the requirements of foreign countries.

"Thanks to the help from local government, the quality of our products has been highly approved and we are also able to obtain important information in a short time to adjust our business strategy globally," says Wei Zhaogui, general manager of Xiamen K-power Sports.

Wei, a local entrepreneur, started the business with 50 workers nine years ago. His company now exports fitness equipment worth up to $100 million to more than 70 countries around the world.

K-power has also contributed to forming a new national fitness equipment standard by providing production and testing statistics. The new standard is due to be launched in the first half of this year.

In K-power's showroom, many new products combine the functions of entertainment and exercise, such as a treadmill that simulates Xiamen's beautiful environment on a digital screen, and exercise bikes that have access to Apple products.

These upgraded products are selling well in new international markets such as Russia and Brazil. Compared with a steady growth rate of 20 percent in traditional Western markets such as Europe and US, development in emerging economic countries has more than doubled each year since 2009.

"All of this is far beyond what I expected when we started the business in late 2003," Wei says.

The industry generally has experienced a transition in the past three years from original equipment manufacturing to selling own brands in the domestic market.

Originally from Taiwan, Xiamen Cowell Industrial Ltd is the single largest OEM for the world's leading fitness facility company, ICON, which owns brands including NordicTrack, ProForm and iFit.

"Being an OEM, we also face all kinds of challenges such as the increase in manufacturing costs," says Ryan Lee, Cowell's general manager. "And after long-term cooperation, we are now capable of design work, and so have become a strategic partner, participating more in ICON's business from manufacturing to R&D and promotion."

The partnership has also turned Cowell into the world's largest fitness equipment maker.

After years of experience in the world market, Cowell is starting to transfer business to the fast-growing domestic market.

The State Council released a nationwide fitness program in its 12th Five-Year Plan (2011-2015). More than 1.2 million local community sports fields, gyms and public fitness facilities are planned.

Since 2011, Cowell has been developing its own brand, called Salud, for the domestic market.

According to Lee, Western consumers like to purchase fitness equipment at big shopping malls or supermarkets, but Chinese people prefer to buy it through specialized shops or agents.

"We are new to the market, but with its big potential, we are willing to face all challenges," he says.

zhaoyanrong@chinadaily.com.cn

(China Daily 01/11/2013 page12)