Page 364 - 2018 White Paper on the Business Environment in China
P. 364
8 White Paper on the Business Environment in China
to Yu Xingyu Chief Operation Officer at Alisports, the 4,000,000 new gym attendees every year since 2011
sports arm of Alibaba Group. But he added that policy 100 million users in China’s top fitness app compared
support is indispensable when it comes to development to 20 million in Europe’s #1 app
in the budding sector. As an example, he pointed to China is the largest and fastest growing energy
enthusiastic embrace of long distance running, as more drink market
than 400 marathons will be held in China in 2017, up 11 percent growth in sportswear sales from 2015
from 22 six years ago. Chinese Athletics Association while overall apparel grew only 5 percent
statistics show that a total of 2.8 million runners Xiaomi’s fitness watch Mi Band overtook Fitbit and
attended these races in 2016, which is 1.3 million more tied with Apple in sales and volume in the first quarter
than 2015. “After the central government opened the of 2017 with 95 percent of its sales in China
floodgate and encouraged the local governments to
promote marathon races in their respective cities, the Chinese consumers are increasingly affluent, health-
amount of races rose by almost tenfold,” he said (Ye). conscious, adventurous, and interconnected via
mobile platforms, especially the country’s 415 million
Alibaba Group Holding Ltd., China’s e-commerce millennials. These changes are working together to
leader, has been trying for a few years to multiply make fitness fashionable and aligning Chinese attitudes
sales of sporting goods and related merchandise on its towards sports with those of the west. For foreign
platforms, which totaled about 76 billion yuan in 2016. companies, this indicates growing potential for their
The problem is that, for its size, China doesn’t have branded, higher-end fitness and athleisure goods.
much of a sports industry. So a relatively tiny arm of Established global brands whose growth has leveled
the Chinese company is trying to make one. Alisports, off in mature markets are experiencing double-digit
a 210-person Alibaba, is tapping its corporate parent’s growth and first-mover advantages in China, where the
troves of data on about 500 million shoppers to organize fitness market is still at an early stage. However, being
and broadcast sports competitions and aim products an early entrant into a relatively green market where
at local markets. It’s teamed up with sporting goods potential has not yet been confirmed has obvious risks.
companies, as well as national and local sports teams, Encouraged by government initiatives and a promising
schools, coaches, and courts, even managing some of market, private corporations are also stepping into
the direct-sales businesses itself, a rare step for Alibaba. the game with investments that boost China’s fitness
“Those data and technology are already there,” says Li ecosystem even further. Alibaba’s Alisport pledged
“Rocky” Feng, Alisports’ Vice President for Marketing. to invest US$100 million over the next 10 years in a
“We don’t have to create it on our own.” At a macro level, plan to popularize rugby in China and Wanda Group
the data tell Alisports that customers in colder northern became an organizer of the Ironman Triathlon for
China are the best targets for wrestling and archery $650 million. Foreign brands are also changing the
gear, whereas the south tends more toward swimsuits sports landscape. Nike’s WeChat integrated Run Club
and badminton rackets. So-called athleisure, such as platform and Lululemon’s public yoga sessions are two
yoga and jogging gear, often tops the overall sales examples of how foreign brands are helping create
charts. Zoom in a little further, and the company’s data sport communities and popularizing not only their
strengths become more pronounced. When customers products but also a healthy and active lifestyle. China’s
buy tennis rackets or basketballs through Alisports, the sports and fitness economy still has a long race ahead
site sends them recommendations for local coaches and before reaching the performance levels and size of more
court times they can reserve online (Bateman). mature markets (Fiducia).
Fitness Computer and Online Games
The fitness market is warming up in China, stretching Not everyone, however, sees games as athletic.
the scope for foreign investment across various China’s electronic sports (eSports), or competitive video
segments – from sportswear retail to training facilities. games, industry generated 50.4 million yuan in revenue
Specific 2016 numbers stand out: in 2016, up 34.7 percent year-on-year, according
to a report by China’s Game Publishers Association
Over 350 ski resorts, up from 300 in 2011 Publications Committee (GPC), an industry group
40 percent growth in rental skis from 2015 reaching for game publishers. The main revenue source of the
500,000 pairs
330 marathons, up from 22 in 2011
364
to Yu Xingyu Chief Operation Officer at Alisports, the 4,000,000 new gym attendees every year since 2011
sports arm of Alibaba Group. But he added that policy 100 million users in China’s top fitness app compared
support is indispensable when it comes to development to 20 million in Europe’s #1 app
in the budding sector. As an example, he pointed to China is the largest and fastest growing energy
enthusiastic embrace of long distance running, as more drink market
than 400 marathons will be held in China in 2017, up 11 percent growth in sportswear sales from 2015
from 22 six years ago. Chinese Athletics Association while overall apparel grew only 5 percent
statistics show that a total of 2.8 million runners Xiaomi’s fitness watch Mi Band overtook Fitbit and
attended these races in 2016, which is 1.3 million more tied with Apple in sales and volume in the first quarter
than 2015. “After the central government opened the of 2017 with 95 percent of its sales in China
floodgate and encouraged the local governments to
promote marathon races in their respective cities, the Chinese consumers are increasingly affluent, health-
amount of races rose by almost tenfold,” he said (Ye). conscious, adventurous, and interconnected via
mobile platforms, especially the country’s 415 million
Alibaba Group Holding Ltd., China’s e-commerce millennials. These changes are working together to
leader, has been trying for a few years to multiply make fitness fashionable and aligning Chinese attitudes
sales of sporting goods and related merchandise on its towards sports with those of the west. For foreign
platforms, which totaled about 76 billion yuan in 2016. companies, this indicates growing potential for their
The problem is that, for its size, China doesn’t have branded, higher-end fitness and athleisure goods.
much of a sports industry. So a relatively tiny arm of Established global brands whose growth has leveled
the Chinese company is trying to make one. Alisports, off in mature markets are experiencing double-digit
a 210-person Alibaba, is tapping its corporate parent’s growth and first-mover advantages in China, where the
troves of data on about 500 million shoppers to organize fitness market is still at an early stage. However, being
and broadcast sports competitions and aim products an early entrant into a relatively green market where
at local markets. It’s teamed up with sporting goods potential has not yet been confirmed has obvious risks.
companies, as well as national and local sports teams, Encouraged by government initiatives and a promising
schools, coaches, and courts, even managing some of market, private corporations are also stepping into
the direct-sales businesses itself, a rare step for Alibaba. the game with investments that boost China’s fitness
“Those data and technology are already there,” says Li ecosystem even further. Alibaba’s Alisport pledged
“Rocky” Feng, Alisports’ Vice President for Marketing. to invest US$100 million over the next 10 years in a
“We don’t have to create it on our own.” At a macro level, plan to popularize rugby in China and Wanda Group
the data tell Alisports that customers in colder northern became an organizer of the Ironman Triathlon for
China are the best targets for wrestling and archery $650 million. Foreign brands are also changing the
gear, whereas the south tends more toward swimsuits sports landscape. Nike’s WeChat integrated Run Club
and badminton rackets. So-called athleisure, such as platform and Lululemon’s public yoga sessions are two
yoga and jogging gear, often tops the overall sales examples of how foreign brands are helping create
charts. Zoom in a little further, and the company’s data sport communities and popularizing not only their
strengths become more pronounced. When customers products but also a healthy and active lifestyle. China’s
buy tennis rackets or basketballs through Alisports, the sports and fitness economy still has a long race ahead
site sends them recommendations for local coaches and before reaching the performance levels and size of more
court times they can reserve online (Bateman). mature markets (Fiducia).
Fitness Computer and Online Games
The fitness market is warming up in China, stretching Not everyone, however, sees games as athletic.
the scope for foreign investment across various China’s electronic sports (eSports), or competitive video
segments – from sportswear retail to training facilities. games, industry generated 50.4 million yuan in revenue
Specific 2016 numbers stand out: in 2016, up 34.7 percent year-on-year, according
to a report by China’s Game Publishers Association
Over 350 ski resorts, up from 300 in 2011 Publications Committee (GPC), an industry group
40 percent growth in rental skis from 2015 reaching for game publishers. The main revenue source of the
500,000 pairs
330 marathons, up from 22 in 2011
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