In recent times, the outdoor products market has seen various competitions between domestic brands and between international and domestic brands.
Recently, during the 2013 ninth Asia Outdoor Trade Show (hereinafter referred to as ISPO BEIJING 2013) held at the China National Convention Center in Beijing, an intense battle to win over target consumer groups took place. Among the highlights of this competition was the fact that traditional sports brands such as Adidas and Li-Ning, major industry players, developed outdoor product lines and made appearances at the industry expo.
A report released by the organizing committee of ISPO BEIJING 2013 showed that by 2011, the scale of China’s outdoor sports industry had reached nearly 11 billion yuan, 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, which still has significant room for development, has become a new blue ocean. Traditional sports brands, and even traditional footwear and apparel brands, have collectively “shifted direction,” 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 spaces to thrive.
Traditional sports brands “lose ground”
The biggest highlight of this year’s ISPO BEIJING 2013 was the first-time participation of giants in the traditional sports brand sector 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, explore 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 the Performance Sports Brand at Adidas Greater China, described its strategy in China, noting that China has now become the global leader in outdoor product consumption, indicating strong growth potential for outdoor products in the Chinese market.
It is reported that in 2012, Adidas opened four specialty outdoor stores in China and conducted outdoor-themed roadshows in seven cities. At this year’s ISPO BEIJING 2013, Adidas set up a 200-square-meter exhibition area showcasing multiple product lines including footwear, apparel, and accessories, featuring many high-tech outdoor products such as its Terrex star series. Additionally, Adidas also created a dedicated children’s outdoor equipment zone.
An industry insider who preferred to remain anonymous believes that the continuous expansion of the outdoor market is the reason why traditional sports brands are “losing ground.”
In response to this situation, another industry insider analyzed: “The traditional sports goods market has declined, and major sports brands urgently need new growth points, which the outdoor market provides. Moreover, there is a certain affinity between the two, making the transition relatively easier.”
The world’s third-largest sports brand, Puma, has also transformed into the outdoor products sector. Francois-Henri Pinault, CEO of Puma’s parent company Kering Group, recently publicly stated: “We believe there are two highly potential segments in sports: one is extreme sports, and the other is the outdoor products market.”
Differentiation in competition becomes a trend
At this year’s ISPO BEIJING 2013, the Italian pavilion remained a major highlight. It is understood that the number of participating Italian companies increased significantly compared to the previous edition, although specific figures were not disclosed, the brands exhibited focused on luxury.
To attract the attention of Chinese distributors, the Italian pavilion held a sports products launch event, attended by Italy’s newly appointed 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 into new areas of cooperation. At the same time, in some traditionally strong cooperation areas, such as environmental protection, the two sides can also strengthen collaboration.”
Unlike other brands, Italian companies aim to attract high-end users with their high quality, especially the functional design of their products and wearer comfort. According to insiders, Italian outdoor companies intend to build outdoor gear as luxury items. Although prices are high, professional users place more emphasis on product performance, which is the biggest difference between outdoor gear and other sports products.
The insider noted that high-end equipment can meet the needs of professional users, while outdoor trends that combine functionality and fashion cater to a broader market. Therefore, outdoor brands must not only develop product functionality to meet outdoor activity needs but also incorporate fashionable elements to make outdoor gear a stylish 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 professional outdoor fashion products, with prices averaging 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 Sports Fashion Trend Forum, predicting outdoor clothing trends in terms of functional product R&D, future popular colors, and design styles.
Currently, China’s outdoor products market is viewed favorably by global outdoor product companies. According to Klaus Dittrich, President and CEO of Messe München, the organizer of ISPO BEIJING 2013, this year’s exhibition occupied two halls at the China National Convention Center, with a scale 25% larger than the previous edition, exceeding 40,000 square meters.
Regarding this, Hu Nan admitted: “Although the outdoor products market is not as fiercely competitive as the sports goods market, differentiation is still necessary.”