The COA China Outdoor Industry Report press conference was successfully held at 10:30 AM on June 30 at the 5A Registration Hall of the Nanjing International Expo Center during the Asia Outdoor Exhibition. The main contents of the report are as follows:
I. Market
1. 2015 Domestic Outdoor Products Market Overview
For most practitioners and companies in the outdoor industry, 2015 was a rather challenging year.
As an emerging sunrise industry, the outdoor products sector has experienced over two decades of rapid development since its inception in the mid-1990s. According to COA statistics, from 2001 to 2010, the domestic outdoor products industry achieved a compound annual growth rate of over 60%; in 2011, the market retail size exceeded 10 billion yuan for the first time, surpassed 15 billion yuan in 2013, and reached 18 billion yuan in 2015.
Like all emerging industries, after a period of rapid growth, an "adjustment phase" is an inevitable part of industrial development. In 2013, the core domestic outdoor products market grew by 16.7% compared to the previous year, with the growth rate falling below 20% for the first time; in 2014, it grew by 10.9% compared to 2013, and in 2015, the growth rate dropped to just 5.3% compared to 2014. After years of rapid growth, the domestic outdoor products industry entered an adjustment phase starting in 2014.
In interviews with over 50 companies, nearly half of the company leaders mentioned that the most pressing issue they faced was the highly complex market environment and competitive pressures. To summarize, "against the backdrop of profound changes in the overall national economic environment, there are both internal issues accumulated over more than twenty years of rapid industry growth that need to be resolved, and external forces viewing the outdoor sector as a sunrise industry continuously entering the market, intensifying competition." One company leader vividly likened it to: "The speed of new market brands entering far exceeds the pace of market size growth."
"Adversity reveals true heroes." While we felt the pressure the adjustment phase brought to businesses during the interviews, what was more reassuring was witnessing the tremendous progress of Chinese domestic brands over the past two decades. As a typically imported industry, the outdoor sector transitioned from being dominated by foreign brands in its early stages to now having domestic brands occupy more than half of the market share. A number of leading domestic brand enterprises also view this adjustment phase as an opportunity. Firmly grasping the time window provided by the market adjustment, they are conducting deep self-reflection on "brand positioning and development strategies," honing their internal capabilities, and strengthening self-development abilities, in order to greet the next growth cycle of the outdoor industry with a more mature stance.
2. Overall Outdoor Products Market
With the development of the outdoor industry, an increasing number of brands outside the industry have begun to enter the outdoor products sector. This situation has, on one hand, enriched the connotation of the industry, and on the other hand, to some extent, blurred its boundaries.
Based on the relevance of products to outdoor sports, we divide the outdoor products market into four components:
1) The core outdoor market, composed of professional outdoor brands—professional outdoor brands are those rooted in the outdoor industry, with the majority of their revenue derived from the outdoor sector.
2) The sports outdoor market, composed of sports brands that offer outdoor products—these are brands whose main product lines are traditional sports goods, but whose product offerings now include some outdoor products, though these have not yet become their dominant products. Examples include Adidas, Nike, Li-Ning, and Anta.
3) The leisure outdoor market, composed of fashion and leisure brands that offer outdoor products—these are brands whose main product lines are fashion and leisure goods, but whose product offerings now include some outdoor products, though these have not yet become their dominant products. Examples include LOTTO, JEEP, and CAMEL ACTIVE.
4) The low-end outdoor market, composed of low-end consumer market brands that offer outdoor products—for example, Quechua under Decathlon, as well as numerous outdoor brands sold in supermarkets such as Metro and Walmart.
Dividing the outdoor products market into these four parts helps us study market changes and gain a comprehensive view of the outdoor market, especially for market investors—"only with clear boundary definitions can statistical data be of reference value."
In 2015, the overall domestic outdoor market size reached 45.4 billion yuan, an increase of 12.5% over the previous year (Figure 1.1).
Over the past two years, the trend in the overall domestic outdoor market has been that the growth rate of the core outdoor market has significantly slowed down and is still in the adjustment process. The sports outdoor market has seen relatively fast growth, mainly due to sports brands entering a new growth cycle starting in 2014 after more than three years of adjustment; based on the Q1 2016 reports, major sports brands are showing accelerated growth. Notable representatives are Nike and Adidas. The outdoor product shares of these two major brands are also gradually increasing. The leisure outdoor market has seen little change. The share of the low-end outdoor market within the overall outdoor market has also remained relatively stable. However, it is worth noting that Decathlon’s share within the low-end outdoor segment has rapidly increased. Over the past two years, Decathlon has developed quickly, and by the end of 2015, it had 158 retail stores in China, with continued growth momentum.
3. Core Outdoor Products Market
2000–2015 Domestic Core Outdoor Market Size (Figure 1.2)
In 2015, the core outdoor market size reached 18 billion yuan, an increase of 5.3% compared to 17.1 billion yuan in 2014, with the growth rate declining further from the previous year. Who contributed to this 5.3% growth in 2015? Unlike the past 15 years, large brands contributed less to the growth rate in 2015. According to sales data from the top 50 brands, apart from a few brands growing over 10%, most brands saw growth of less than 5%. In 2015, some leading single-brand companies and newly added online brands contributed significantly to market growth. In 2015, over 50 new brands entered the domestic outdoor products market, nearly 80% of which were online brands. Currently, there are over 100 online brands in the market, among which more than 10 are growing rapidly and are becoming a key driving force in online sales growth.
The growth rates for 2016–2020 in Figure 1.2 are forecast data.
The "adjustment phase" that began in 2014 is expected to last 3 to 4 years, with most brands entering a new growth cycle starting in 2017. Therefore, our market outlook for the five years of 2016–2020 is that growth will remain in single digits for 2016 and 2017, reach double digits in 2018 and 2019, and is expected to exceed 20% in 2020.
II. Channels
1. Outdoor Channel Composition and Evolution Trends
Outdoor product sales organizations include various levels of agents, distributors, etc. This report focuses on outdoor retail terminals, mainly including: department store channels, specialized outdoor stores (street-side stores), and online sales channels.
1996–2015 Evolution of Domestic Core Outdoor Products Market Sales Channels (Figure 3.1)
Over the past 20-plus years of evolution, during the period when street-side stores dominated, the market sales scale was not large, representing a typical market cultivation phase; after 2006, mall stores entered a rapid growth period, and by 2013, the mall channel share exceeded 65%; the German outdoor brand "Jack Wolfskin" is the most prominent representative of seizing the rapid growth opportunity of mall channels. This brand focused all its efforts on mall channels upon entering the Chinese market, enabling rapid brand development. La Sportiva and Columbia also primarily rely on mall channels.
2006 Since then, retail channels have become the primary distribution route for outdoor footwear and apparel products. This situation differs significantly from markets in Europe and America, reflecting distinctive characteristics of the Chinese market. Consumer surveys clearly show that many Chinese outdoor product buyers wear outdoor clothing as a fashion statement, with little actual connection to participating in outdoor activities. This group constitutes the main consumer base for retail channel sales.
2011 Online sales began to rise in 2011 and have seen rapid development since 2013. Toread was the first major brand with online sales accounting for over 30%; Bosideng is a representative example of a brand that has experienced rapid growth in the online space over the past three years.
In the coming years, the share of online sales channels will continue to rise, further encroaching on the market share of street-side stores, including retail outlets. Although the share of both street-side stores and retail channels is on a downward trend, the demand for large-scale experience stores is increasing—especially noticeable for large street-side experience outlets. In 2015, there was a significant reduction in small street-side stores, while a new batch of large street-side experience stores emerged. This trend is noteworthy.
2. Channel Market Share and Trends
Market share of various sales channels in 2015 and forecast for 2020 (Figure 3.3)
In 2015, street-side stores accounted for 21.7%, retail stores for 62.9%, and online sales reached 15.4%. Over the next five years, the online sales market share is expected to grow rapidly, surpassing 31% by 2020. The proportion of retail and street-side stores will continue to decline; among street-side stores, smaller outlets will further diminish while larger ones increase in share. Currently, the process of channel transformation is still ongoing and will have a profound impact on the future market. Especially, the evolution of online sales channels is far from complete. Despite the “low stability” of online sales models and the continuous emergence of new formats, the rising share of online channels is a tangible and expected reality.
Special Note: Over the past 3 years, with the rapid growth of online channels, a large number of online-specific products have emerged. Many of these online products are labeled as outdoor but do not meet the core criteria of established outdoor brands. To address this, the brand expert panel conducted a thorough review of existing online brands, reclassifying most “online outdoor brands” as casual outdoor brands. A significant number of online brands previously listed under the core outdoor category in 2013/2014 were also removed. Based on this, we have revised the 2015 calculation model for the online sales channel.
We will further elaborate in the brand overview section that the definition of brands and the delineation of market segments still require gradual standardization and refinement.
Distribution of the domestic outdoor market and physical channels in 2015 (Figure 3.2)
This chart clearly illustrates the distribution of China’s outdoor product market. Western China boasts the richest mountainous and outdoor resources and serves as a prime destination for outdoor travel. However, the outdoor product market is mainly concentrated in the economically developed eastern regions.
Northern China, particularly the Northeast, has become a key sales market for outdoor products, closely related to climatic factors.
3. Brand Overview
Changes in the number of core outdoor brands from 2010 to 2015 (Figure 2.1)
We organized industry experts to identify 830 brands as core outdoor brands out of over 1,200 outdoor or self-proclaimed “outdoor” brands. In 2015, the number of core outdoor brands in China maintained an upward trend, increasing by 7% from 775 in 2014. Among them, the number of domestic brands was 398, accounting for 47.95% of the total, with a growth rate of 12.4%; foreign brands numbered 432, making up 52.05% of the total, growing at a rate of 2.6%. The growth rate of domestic brands exceeded that of foreign brands. Of the newly added domestic brands, 80% were so-called “online brands” primarily focused on online sales.
As shown in Figure 2.1, the number of brands in China’s outdoor market continues to fluctuate, but the growth rate has slowed. Comparing with the development history of outdoor markets in Europe and America, a common trend is that during the early growth phase, numerous new brands emerge, but the number significantly declines as the market matures.
Historical data from the South Korean outdoor brand market is even more typical. From the 1980s to the 1990s, South Korea’s outdoor industry experienced rapid growth, giving rise to a large number of local brands—peaking at nearly 800. However, only a limited number actually succeeded in establishing themselves.
Judging from trends in the domestic outdoor market, the growth rate of offline brands has noticeably slowed. In the near future, online brands will continue to increase; however, due to their shallow roots in outdoor culture, some may quickly disappear. Currently, nearly 10% of domestic outdoor brands are effectively non-operational.
The proportion, importance, sustainability, and viability of agency sales for foreign brands are all steadily declining. We believe this trend will continue. As the domestic outdoor market develops, the concentration of brands in the market is an inevitable process, although the pace remains uncertain.
Lastly, we cannot overlook the capitalization of the outdoor industry and the dynamic involvement of capital. This includes two aspects: first, the industry’s own capitalization is accelerating. In addition to Toread and Sanfo, which have already gone public (IPO), several other companies are on the path to IPO, while numerous brands and channel companies have introduced financial or strategic investors, thereby elevating the overall capitalization level of the industry. On the other hand, investment institutions, represented by private equity funds, are not only increasing their investment in brands and channels within the industry but are also directly acquiring and operating brands, channels, clubs, and events. Given their financing and investment capabilities, they have the potential to significantly impact the entire industry ecosystem.Rings.
In summary, 2015 was full of challenges and changes. Looking ahead, we not only see gradually recovering growth potential and speed but also numerous possibilities for change and the uncertainties they bring. Navigating this great uncertainty—seizing opportunities, gaining the upper hand, and avoiding pitfalls—is both a challenge for existing industry players and prospective investors, as well as an opportunity to achieve late-mover advantages and rapid business value creation through innovation.
Research Methodology
This report was completed by a dedicated research team organized by the China Outdoor Brand Alliance. While focusing on the core outdoor market, the report also conducted in-depth research on the non-core outdoor market. By studying segmented markets and conducting comparative analysis, we aim to help readers gain a clearer understanding of the overall outdoor market landscape. For market investors in particular, “clearly defined boundaries make statistical data more valuable.” We sincerely thank the member companies of the Outdoor Brand Alliance for their strong support in funding, products, and especially market data for the research team.
Data Sources
Sales data for the core outdoor market primarily come from interviews with executives or sales directors of the top 50 companies in the industry, as well as major regional distributors and retailers. Due to the large number of publicly listed companies in the sports brand sector, data for the sports outdoor market are mainly based on publicly available information from listed companies. Data for the casual outdoor and low-end outdoor markets are primarily derived from textile industry market data from major domestic retail businesses and sales data from over 20 well-known casual brands.
Online sales data are mainly based on publicly available figures from Tmall and JD.com.
Data sources for physical retail terminals: We selected 107 cities out of 334 prefecture-level and above cities nationwide, deploying over 300 market researchers to conduct retail terminal statistics for street-side and retail stores, building a database, and using this as the basis to estimate national data. These researchers are from outdoor clubs or retail enterprises and have established stable cooperative relationships with the research team, ensuring the dynamic updating of the retail terminal database.
Brand Scope:A team of industry experts conducted individual assessments of over 1,200 recognized or self-proclaimed “outdoor brands” to determine the scope of core outdoor brands for 2015.
Screening principles applied by the research team to various types of market data: We place greater emphasis on industry market data accumulated by well-known brands over the years.
All statistical data in this report exclude skiing, mountain biking, fishing, and hunting.