The past year has brought the Chinese outdoor gear market back to rationality and reality. The market grew rapidly in previous years, but since last year, excessive inventory has forced everyone to slow down. Although experts unanimously agree that the Chinese outdoor gear market will continue to trend upward, it will place higher demands on brands and distributors. Simply opening more and more flagship stores is far from enough. The Chinese outdoor gear market needs certain adjustments in both retail trade and brand promotion. As a professional outdoor business platform, the Asia Outdoor Exhibition in Nanjing is playing the role of a guide, pointing the way in this increasingly complex market.
This spring, the market downturn was first reflected in the comprehensive sports goods brands, while the impact on the outdoor industry was not as severe, though it still took some hits. One of China’s major sports goods giants—Anta—closed hundreds of stores last year due to the heavy burden of inventory. Li-Ning, a domestic sports brand that rivals Adidas and Nike, also suffered losses, with performance dropping by double digits. Analysts say Li-Ning controlled costs and improved efficiency by reducing store numbers.
Compared to sports goods, the outdoor gear market faces relatively less pressure and is still aiming for strong double-digit growth this year, with reported increases of 20%-30%. However, whether the market will actually grow is still uncertain, as first-tier cities like Beijing and Shanghai have already reached market saturation.
At the Asia Outdoor Exhibition in Nanjing last summer, one American brand representative noted that the Chinese outdoor gear market did not develop naturally as it did in the West. In Europe and America, hikers and climbers were originally just a very small group. It took decades for outdoor sports to become popular and eventually evolve into a mass-market. In China, the situation is the opposite: brands went full throttle, establishing stores across the market to build brand recognition first. Just Jack Wolfskin, through its authorized dealers, has opened about 500 specialty stores in China. The likely reason for Jack Wolfskin’s success in China is the typical Chinese enthusiasm for Western brands. Therefore, fashion trends rather than the functionality of outdoor products have been a greater driving force behind China’s outdoor industry.
The downturn the outdoor gear market experienced last year has forced brands to rethink their market strategies. Take Mammut, for example: the Swiss brand only established its China branch this year. Its approach is completely different from that of Columbia, The North Face, or Toread, which rely heavily on company-operated stores. Mammut has opted for a specialized channel strategy and has already begun collaborating with dozens of professional outdoor stores.
Behind the marketing strategy shifts in the outdoor industry and outdoor retail lies the industry’s concern: the fashion-driven trend in outdoor gear may suddenly stop at some point, potentially damaging the nascent outdoor industry.
Evidence shows that last year, sales growth of outdoor gear in professional outdoor stores outpaced that of apparel by several percentage points. Outdoor gear is generally seen as an indicator of “true” outdoor activity. Of course, according to data released by the National Information Center, apparel still accounts for 74% of total revenue.
In fact, some long-established mainstream brands in the market began shifting strategies quite early. For example, The North Face, a major American outdoor brand, initially gained market access by opening counters in the fashion sections of large shopping malls in big cities. Now, with the development of outdoor gear street stores in first-tier cities and smaller cities where outdoor activities are popular, The North Face is also expanding into the outdoor store channel. Likewise, participating in professional exhibitions is also a great channel-expansion strategy for The North Face, making its participation in this year’s Asia Outdoor Exhibition, to be held in Nanjing from July 24–27, a very logical decision.
This midsummer, the 2013 Asia Outdoor Exhibition will cover an area of over 52,000 square meters, with approximately 600 exhibitor brands presenting their latest products and technologies to professional audiences from China and the Asia-Pacific region. The Chinese outdoor gear market will undergo a profound transformation through the Asia Outdoor Exhibition, a professional outdoor platform: we remain optimistic about the domestic outdoor gear market, but market fluctuations have made the industry more complex, calling for closer information exchange among industry insiders and those looking to gain a foothold in this market. The 2013 Asia Outdoor Exhibition is precisely such a rare platform for exchange.