Review of the Asia Outdoor Forum | The Impact of the Internationalization of Outdoor Activities on National Economy

The 14th Asia Outdoor Exhibition has come to a successful conclusion. What were the highlights of this year’s Asia Outdoor Summit Forum? Let’s take a look back at the session presented by Mr. He Runyu titled "The Impact of the Internationalization of Outdoor Activities on National Economy."

China’s outdoor industry emerged quietly in the 1990s and experienced explosive growth. Although it has developed rapidly, as of 2017, the outdoor and sports industry accounted for less than 1% of the country’s GDP. An increasing number of international projects have entered China and integrated with the domestic sports industry. What impact will outdoor activities have on the public and the nation in the future?

He Runyu

Associate Professor, School of Economics and Management, University of Science and Technology Beijing

Visiting Scholar, Babson College (USA)

Founder and Team Leader of the “Professor Running Group”

Initiator of the “Running for Education” Sports Charity Initiative

Activities and sports primarily conducted in natural outdoor environments, aimed at fitness and emotional well-being, and are environmentally friendly. These include low-intensity recreational fitness activities such as square dancing in urban artificial settings, as well as high-intensity extreme adventure activities like mountaineering and trail running.

Mr. He Runyu discussed the internationalization from several perspectives: From the angle of internationalized concepts and values, he noted that Chinese people are increasingly learning to enjoy leisure and outdoor lifestyles. From the perspective of capital market internationalization, he analyzed some groundbreaking events in outdoor industry investments in 2018, such as Anta’s acquisition of Amer Sports. From the perspective of geographic market internationalization, he observed that apart from a large number of athletes competing abroad, international brands are also shifting into the domestic market. From the perspective of product and service internationalization, he explained that the 10% tariff imposed on certain outdoor products under the U.S.-China trade war last September has already affected industry growth. If this issue remains unresolved, the cost burden will not only be borne by Chinese companies but also by American consumers and businesses who will need to absorb the increased costs.

 

1. Development Philosophy — Sustainable Development in Harmony with Nature

The promotion of outdoor activities has a significant impact on environmental sustainability and individual health.

2. GDP: A Key Engine for Economic Growth

In 2011, the retail sales growth rate of the market reached as high as 50.9%. After 2012, the growth rate of total outdoor product retail sales slowed year by year. In 2018, China’s outdoor product retail sales reached 24.98 billion yuan, up 2.1% year-on-year, marking the seventh consecutive year of decline in growth rate. The compound annual growth rate over the past six years was only 9.4%, showing a significant slowdown, indicating the industry has entered a phase of steady development.

According to estimates, in 2017, the total size (total output) of China’s sports industry was 2.2 trillion yuan, with added value of 781.1 billion yuan. In nominal terms, total output grew by 15.7% and added value by 20.6% compared to 2016.

Looking at the internal structure of the sports industry, the manufacturing of sports goods and related products had the largest total output and added value, at 1.35092 trillion yuan and 326.46 billion yuan respectively, with growth rates of 12.9% and 14.0%. The sports services sector (the other nine major categories excluding sports goods manufacturing and sports facility construction) continued its rapid development, with its share of added value in the overall sports industry continuing to rise, from 55% in 2016 to 57% in 2017. Among these, sports competition and performance events, as well as fitness and leisure activities directly related to public sports consumption, saw particularly notable growth, with rates of 39.2% and 47.5% respectively. Additionally, the construction of national fitness facilities such as sports venues, fitness trails, and sports parks has been continuously strengthened, growing by 94.7%, reflecting the rapid and vigorous development of sports facility construction in China.

3. Employment: Dual Support from Supply and Demand

The promotion of outdoor activities provides a large number of high-quality workers for the industry while also supplying the national economy with a healthier labor force.

Employment in the U.S. Outdoor Industry in 2016

4. Consumption Structure: Upgrading Product Consumption, Increasing Service Consumption

The consumption structure is rapidly transforming, with service consumption growing quickly. As living standards continue to improve and supply-side markets advance, consumer spending is shifting from physical goods to services. Outdoor activities have become a new consumption hotspot, with experiential consumption growing rapidly.

5. Healthy Communities: Harmonious Society, Better Life

The popularity of domestic marathon events is driven by the demand for healthy cities and communities. To gauge a city’s — or a nation’s — vitality, one need only observe how many young people are running.

The so-called outdoor activities and the five happiness industries have significant overlap. One way to understand this is to consider these five industries together, with outdoor activities forming the happiest core in the center.

This 14th Asia Outdoor Exhibition and the “Ziranpai” Outdoor Carnival — a combination of a professional trade show and a lifestyle festival — represent an attempt and innovation within the current outdoor activity landscape. In the future, the “Ziranpai” Outdoor Carnival will be centered in Nanjing, supported by the Asia Outdoor Exhibition, and expand nationally, with its first stop being the Taishan event on September 5–8. Stay tuned!