Springboard to success
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With people's soaring interest in outdoor activities, China is set to become a major market for outdoor products. [Photo/Provided to China Daily] |
Growing popularity for outdoor activities gives global outdoor equipment makers a window of opportunity in China
Climbing snow-covered mountains, canoeing down rapids or trekking across deserts are not the kind of activities normally associated with China. But outdoor equipment makers reckon these sports are not only gaining in popularity but also providing rich pickings for domestic and foreign companies in many areas.
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The resurgence of the outdoor sports industry in China also comes as the traditional sports goods industry faces tough going amid flagging sales and weak demand. The annual turnover of China's outdoor product market soared to 14.52 billion yuan ($2.33 billion; 1.82 billion euros) last year, a 35 percent growth over 2011, according to data provided by the China Outdoor Commerce Alliance.
It is estimated that there were 823 outdoor product brands in China last year, with more than 418 of them being foreign companies, 12 percent more than the year before.
Though the growth in foreign brands was more on expected lines, considering the emergence of China as the No 1 consumption market for global firms, domestic companies are also catching up in a market ripe for intense competition and strong growth in the next few years. But for the moment it is global brands like Mammut of Switzerland and Haglofs of Sweden that have a headstart in China, though traditional sports brands such as Adidas of Germany and the local firm Li-Ning are fast catching up.
Nordic challenge
"I am not sure whether this is the most opportune time to be in China, but from a strategic perspective it seems to be in line with our Asian expansion plans," says Magnus Nerve, the Asia-Pacific area manager of Haglofs Scandinavia AB.
In the last 15 years, the Swedish company has seen an annual business growth of about 15 percent on average, with most of it coming from Europe. But conditions in Europe are hard, growth is largely being driven by the company's Asian operations, in China, South Korea and Japan, Nerve says.
Haglofs has firmed up on its China strategy by appointing Beijing Yuechengjunda Trade Co Ltd as its main distributor in China. "Our main priority is to consolidate and build market share rather than volume growth."
According to Nerve the company is working closely with its local distributor to find the right channels to promote its products and is not averse to introducing Asia-specific products, including specific fits and colorings in the long run. "We anticipate Asia to account for 15 percent of our total turnover this year, compared with just 5 percent last year."
The company's three-layer jackets, which cost 6,000 yuan a piece, have been highly popular since they were introduced. Most products are sold through department and multi-brand stores in China.
Nerve, however, feels that the number of outdoor product users in China is still low, and companies need to focus more on creating market awareness and encouraging people to participate in more outdoor activities.
