In recent times, the outdoor gear market has seen various competitions between domestic brands as well as between international and local brands.
Recently, during the 2013 ninth Asia Outdoor Trade Show (hereinafter referred to as ISPO BEIJING 2013) held at the Beijing National Convention Center, a battle for target consumer groups unfolded. A notable aspect of this competition was that traditional sports brands such as Adidas and Li-Ning, major industry players, developed outdoor product lines and made appearances at the trade show.
According to a report released by the ISPO BEIJING 2013 organizing committee, by 2011, the scale of China’s outdoor sports industry had approached 11 billion RMB, expanding at an annual rate of over 40%, making it one of the fastest-growing retail segments. In contrast to the increasingly evident decline in the traditional sports industry in recent years, the outdoor sports market—with still ample room for development—has become a new blue ocean. Consequently, traditional sports brands, and even traditional footwear and apparel brands, have collectively “pivoted,” extending their development efforts into the outdoor industry.
On the surface, the aggressive entry of international brands into the Chinese market is bound to pose a strong challenge to domestic brands. However, industry insiders believe that while competition is inevitable, both domestic and international brands have their own niches.
Traditional sports brands “lose ground”
The biggest highlight of this year’s ISPO BEIJING 2013 was undoubtedly the first-time participation of traditional sports giants such as Adidas and Li-Ning.
“Unlike Li-Ning Sports, which focuses on the professional sports field, 'Li-Ning Adventure' is an independent brand with its own brand language and product characteristics. It targets urban men and women who have experienced and participated in China’s economic boom, with a psychological age of 30 to 45. They yearn to reconnect with nature, seek life’s pleasures, are calm and wise, full of vitality, confidence, and passion.” Hu Nan, general manager of the “Li-Ning Adventure” brand, promoted the brand’s first appearance at the exhibition.
“Our goal is to promote the brand while achieving better integration with outdoor products.” Jens Meyer, Vice President of Adidas Greater China’s Sport Performance Brand, introduced its strategy in China, noting that China has become a global leader in outdoor gear consumption, indicating strong growth potential for outdoor products in the Chinese market.
It is reported that in 2012, Adidas opened four outdoor specialty stores in China and conducted outdoor-themed roadshows in seven cities. For ISPO BEIJING 2013, Adidas set up a 200-square-meter exhibition area showcasing multiple product lines including shoes, apparel, and accessories, featuring many high-tech outdoor products such as its Terrex star series. In addition, Adidas also created a dedicated children’s outdoor gear section designed for kids.
An industry insider who preferred to remain anonymous believed that the continued expansion of the outdoor market is the reason why traditional sports brands are “losing ground.”
Regarding this situation, another industry expert analyzed: “The traditional sports goods market has declined, and major sportswear brands urgently need new growth points—the outdoor market provides that opportunity. Moreover, there is a certain kinship between the two, making the transition relatively easier.”
Puma, the world’s third-largest sports brand, has also shifted to outdoor products. Francois-Henri Pinault, CEO of Puma’s parent company PPR Group, recently publicly stated: “We believe there are two highly promising segments in sports: one is extreme sports, and the other is the outdoor market.”
Emerging trend of differentiated competition
At ISPO BEIJING 2013, the Italian pavilion remained a highlight. It is understood that the number of participating Italian companies increased significantly compared to the previous edition, although exact figures were not disclosed, the brands showcased leaned heavily into luxury.
To attract the attention of Chinese distributors, the Italian pavilion held a sports goods launch event attended by Italy’s new Ambassador to China, Michele Cecchi.
Cecchi said: “The economies of China and Italy are highly complementary and still have room for development. Italy has traditional technological advantages, while the Chinese market has substantial and diverse demands. The two countries can further expand new areas of cooperation. Meanwhile, in some traditionally strong areas of collaboration, such as environmental protection, the two sides can also strengthen their cooperation.”
Unlike other brands, Italian companies aim to attract high-end users with their premium quality, especially through functional design and wearing comfort. According to insiders, Italian outdoor companies intend to build outdoor gear as luxury items. Despite the high prices, professional users value product performance the most—this is the biggest difference between outdoor gear and other sports products.
The insider noted that high-end equipment meets the needs of professional users, while outdoor trends that combine functionality and fashion appeal to a broader market. Therefore, while developing product functionality to meet outdoor activity demands, outdoor brands must also incorporate fashion elements, making outdoor gear a trendy highlight in everyday wear. According to relevant research reports, among the top six brands with the highest average unit price in the sportswear market, four are specialized outdoor fashion products, with an average price about 70% higher than overall sportswear.
The organizers of ISPO BEIJING 2013 released the “2014 China Sports Fashion Trend Report” at the Sports Fashion Trend Release Area and the Sports Fashion Trend Forum, predicting outdoor clothing trends in aspects such as functional product development, future popular colors, and design styles.
Currently, China’s outdoor gear market is seen as highly promising by global outdoor companies. According to Klaus Dittrich, President and CEO of Messe München, the organizer of ISPO BEIJING 2013, this year’s exhibition occupied two floors of the National Convention Center, with a scale 25% larger than the previous edition, exceeding 40,000 square meters.
Regarding this, Hu Nan frankly stated: “Although the outdoor gear market is not as fiercely competitive as the sports goods market, it still requires seeking differentiation.”