In an era where traditional sports enterprises are collectively bracing for a downturn, the outdoor sports industry is embracing spring. This is an untapped market where the power dynamics and rules of the traditional sports sector have been completely upended. All players are now gearing up intensively—the real show is just beginning.
After nearly a decade of rapid growth, the traditional sports industry suddenly encountered a cold winter in 2011. Anta, which had just claimed the top spot among domestic brands, revealed in its financial reports that the same-store sales growth rate for the latest quarter "slowed from mid-to-high single digits in the second quarter to mid-single digits," while orders for the second quarter of 2012 grew by only "low single digits." Li-Ning, struggling with its transformation, saw its order value for the second quarter of next year "remain flat year-on-year." Meanwhile, Peak, a star performer in recent years, reported a 9.5% increase in order value for its 2012 second-quarter trade fair compared to the same period in 2011—the lowest growth since 2009, as previous increases had consistently exceeded 20%.
While domestic traditional sports brands were collectively mired in a slump, the outdoor sports market painted a very different picture. According to statistics from the Outdoor Products Branch of the China Textile Commerce Association, China's total retail sales of outdoor products reached 7.13 billion yuan in 2010, a 47% increase from 2009. From 2000 to 2010, the annual growth rate of China's outdoor products market retail sales exceeded 47%. An industry insider who wished to remain anonymous told reporters that these statistics were overly conservative, with the actual outdoor market size already in the tens of billions.
The largest domestic outdoor brand, Toread, achieved revenue of 434 million yuan last year, a 47.86% year-on-year increase, with profits of 64 million yuan, up 24.12%. In the first three quarters of this year, Toread's revenue reached 430 million yuan, a 68.77% increase over the same period last year, and profits soared by 76.55% to 53.8 million yuan. Industry insiders also revealed that The North Face and Columbia achieved annual growth rates of over 70% in the Chinese market.
While sports brands are collectively enduring a winter, outdoor brands are welcoming a spring.
Undercurrents brewing
Although the outdoor sports industry has maintained a high growth rate of around 40% for years, its relatively small scale—and the fact that the mainstream traditional sports industry also saw an annual growth of over 20% over the past five years—meant the niche outdoor sector never received sufficient attention. Had it not been for the growing pains faced by domestic traditional sports brands this year, many would still have overlooked this "gold mine."
Currently, capital and talent are flooding into this booming market. So far this year, the outdoor sports industry has seen three major acquisitions. In June, VF Corporation, which owns The North Face, acquired the renowned mountaineering brand Timberland for $2.3 billion. Then in July, U.S. private equity firm Blackstone Group bought Germany’s largest outdoor brand, Jack Wolfskin, for €700 million. By November, Adidas acquired the specialized climbing brand Five Ten for $25 million, signaling its ambition to make a mark in the outdoor sector.
In the capital markets, outdoor-related stocks have also been highly sought after. Since January 2009, VF Corporation’s stock price has risen from below $60 to its current $120. Since announcing the Timberland acquisition in June, the company’s stock has gained over $20. Another industry leader, Columbia, has also seen its stock price rise nearly 50% over the past two years.
The promising market outlook has also attracted a wave of talent from the traditional sports industry. A former employee of Li-Ning, now working for a well-known international outdoor brand, told reporters that many Li-Ning staff, amid the company’s significant internal upheaval, are choosing outdoor brands—not traditional sports brands—as the next step in their careers.
However, despite a decade of rapid growth, the overall development level of the industry remains quite rudimentary. It’s no exaggeration to describe it as a wild, uncultivated land. The top-ranked The North Face and Columbia each have sales of around 1 billion yuan, while the third-ranked Toread is expected to hit 700 million yuan this year. The brands ranked 4th to 10th are all clustered around the 400–500 million yuan range, with little differentiation between them. Overall, the outdoor market is far from forming the clearly tiered structure seen in the traditional sports industry. The gap between the first-tier and second- and third-tier players hasn’t truly widened, leaving the market a blue ocean full of uncertainties.
"Right now, everyone is focused on figuring out how to be themselves, not on how to take down others," said Xiao Ke, product director of a well-known international outdoor brand, to reporters. "The brands are all about 10 steps apart—there’s no need to jump the gun and provoke anyone."
A Different Game
This is an emerging field where the power structures and rules of the traditional sports industry have been completely rewritten—even industry giants like Nike and Adidas haven’t had it easy in the outdoor space.
"Arc'teryx can sell a down jacket for 20,000 yuan and still sell well, but Adidas sells one for 1,200 yuan and barely anyone buys it," Xiao Ke explained. In China’s outdoor market, especially among high-end consumers, price is simply not a concern. "The higher the price, the better it sells."
This year, Adidas has begun making moves in the outdoor sector, not only acquiring Five Ten but also heavily promoting its in-house outdoor series, TERREX. In early September, Adidas opened its first dedicated outdoor products store in China, located in Harbin. But according to Xiao Ke, Adidas’ current approach is off the mark.
"Adidas excels at offering cost-effective products, but in today’s outdoor market, that’s the wrong strategy. What consumers care about now is whether the product looks cool and professional enough," Xiao Ke said. Simply copying the traditional sports industry’s playbook doesn’t work in the outdoor space.
The popularity of pricey high-end outdoor gear is actually an inevitable result of further segmentation within the traditional sports industry. For China’s affluent consumers, the high-end brands of the traditional sports world—Nike and Adidas—no longer meet their needs. In terms of pricing, Nike’s most expensive footwear, the LeBron 9 basketball shoes, retail for just 1,599 yuan, while the average price of professional-grade outdoor shoes is around 1,500 yuan, with premium models easily surpassing 2,000. The MOUNTAIN EXPERT hiking boots from German mountaineering brand Lowa retail for as much as 3,480 yuan—and despite such high prices, the product remains highly sought after.
For many Chinese consumers of outdoor gear, these products are a way to distinguish themselves from the mass market and assert their identity. High-end outdoor gear is becoming the new luxury.
An industry insider told reporters that many people buy outdoor products not out of any professional sports need but simply to flaunt their wealth. Among current buyers of professional outdoor gear, only 20–30% actually use them for outdoor activities. For the vast majority of consumers, the functional features of outdoor products far exceed their actual needs, which is why the outdoor industry doesn’t need to churn out new products every year like the traditional sector does.
"A mature product can sell well for several years without issue," Xiao Ke explained. This has led to a curious phenomenon in the outdoor industry: some brands’ flagship products even have a value-preserving effect, with some dealers hoarding inventory for a year to sell at a higher price the next year.
Professional outdoor products come with a hefty price tag, and while consumers may initially buy them due to trends, this isn’t a particularly rational consumption pattern. Relying on irrational spending to sustain the market long-term isn’t realistic. As a result, the outdoor industry will continue to segment further, with this trend likely heading in two directions.
First, to meet the needs of different groups, brands will target specific consumer segments. This trend is already emerging. Columbia, previously positioned as a premium brand, has started lowering prices significantly over the past two years, with most products on its official site now sold at half price—on par with the average pricing of Nike and Adidas. Domestic brand Toread, meanwhile, positions itself as "broad outdoor," focusing on second-tier markets to avoid direct competition with international brands.
Another direction is segmentation by outdoor activity type. "Outdoor" is a broad concept encompassing skiing, mountaineering, rock climbing, and extreme sports. In the mature outdoor markets of Europe and America, brand segmentation is already highly refined, with specialized brands for individual sports like mountaineering, rock climbing, and skiing—as well as for accessories like tents, sleeping bags, trekking poles, and eyewear. As China’s outdoor market matures, more specialized international brands will likely enter the market. But for now, the industry remains in a very rough-and-tumble phase of development, which actually presents huge opportunities for domestic companies. Those that can strategically position themselves early will gain a first-mover advantage when foreign brands flood in.
Another hallmark of the outdoor industry, compared to traditional sports, is that the sport’s inherent specialization means there won’t be a brand like Nike that spans the full spectrum from low- to high-end. Leading companies in the industry have almost without exception adopted multi-brand strategies. VF Corporation owns multiple outdoor and lifestyle brands, including The North Face and Timberland. The Columbia Group includes Columbia, Mountain Hardwear, and Sorel. This approach is chosen because the outdoor market remains relatively niche, with highly detailed professional divisions in mature markets—making it difficult for a single brand to sustain a company’s growth. A multi-brand, group-based strategy helps companies gain leverage in negotiations with department stores. Domestically, this trend is also emerging. Toread stated in a recent announcement: "We believe that by launching new brands to capture online shoppers and consumers in third- and fourth-tier cities, we can expand our audience without compromising Toread’s mid-to-high-end brand image, thereby boosting sales revenue." Its multi-brand strategy is now taking shape.
"Since the market is still in its infancy, every brand is essentially feeling its way forward, trying out potential directions. But where things will ultimately head is still unclear," Xiao Ke said.
Achilles' Heel
Behind any period of wild growth, there are bound to be hidden issues—that’s the rule for all industries, and today’s outdoor sports market is no exception.
The biggest obstacle currently holding back industry development is the shortage of product talent. Xiao Ke, who comes from the traditional sports industry, has deep experience with this. "For sales and marketing roles, you can always find people if you're willing to pay, but what we lack the most right now are people who can actually develop products."
Outdoor products have their own unique characteristics. Take outdoor shoes, for example—their technical and functional aspects are far beyond comparison with traditional sports shoes. Outdoor shoes differ greatly from traditional sports shoes in terms of production processes such as sole design, last shape, and upper stitching, as well as in research and development. Additionally, since the entire market is still in its cultivation phase, it's also quite difficult to grasp consumer demand points. As a result, even experience in the traditional sports industry isn't enough to handle the outdoor sector. Due to the talent shortage, many domestic companies, even if they have the money and factories, still can't produce decent products.
"I'm currently training over 20 trainees. It takes about two years for them to mature, and if I can retain even half of them by then, that would be pretty good," Xiao Ke said. "But that only solves our company's own problem." From the perspective of the entire industry, the awkward situation of product talent shortages will persist for a long time.
The shortage of product talent is becoming the Achilles' heel of the outdoor industry. For foreign professional outdoor brands, since single-brand operations are generally not very large, most rely on authorized domestic agency companies to handle operations. These agencies typically adopt a purchasing model, buying products directly from abroad rather than developing them in-house. The downside of this approach is that it significantly reduces product profit margins. "The profit margin for a single shipment is at least 30% lower," an industry insider noted. It's not that local agency companies don’t want to conduct localized R&D themselves, but they simply can't find suitable product talent.
In the current immature market environment, the constraints imposed by the lack of product talent on brands haven't fully materialized yet, because consumers' understanding of products is still quite basic. As market penetration completes, competition at the product level will inevitably become a key focus in the future.
Beyond internal industry issues, outdoor sports companies will also face challenges from traditional sports enterprises. In fact, some sporadic friction has already emerged between outdoor sports brands and traditional sports brands. This friction is most evident in the competition for retail space in malls. In some large department stores, outdoor brands have begun to occupy the sales spaces previously held by traditional sports brands. The scale of mall retail space is fixed, so the rise of outdoor brands will inevitably squeeze out some underperforming traditional sports brands—a classic case of one rising as the other falls.
Of course, traditional sports brands won’t just sit idly by and let outdoor brands encroach on their territory. Moreover, there’s no reason to give up on the lucrative outdoor market. For international giants like Nike and Adidas, outdoor series products have long existed under their brands, but because they’ve already made substantial profits in the traditional sports sector, they haven’t paid much attention to the outdoor segment. Additionally, considering overall brand balance, they can’t allocate excessive resources to the outdoor field, so their outdoor series have remained lukewarm.
But for domestic brands currently facing a downturn, the outdoor sector is undoubtedly a lifeline. Every brand is trying to launch outdoor product lines, and this winter, outdoor down jackets have become a key focus for traditional sports brands.
Currently, all players in the outdoor market are still in the stage of preparing for battle—refining products, cultivating talent, and expanding channels. According to industry insiders, it will take about one to two years for everyone’s deployments to be largely in place, and by then, the direct competition between brands will officially begin. So, for today’s outdoor industry, the real show is just getting started.
While domestic traditional sports brands were collectively mired in a slump, the outdoor sports market painted a very different picture. According to statistics from the Outdoor Products Branch of the China Textile Commerce Association, China's total retail sales of outdoor products reached 7.13 billion yuan in 2010, a 47% increase from 2009. From 2000 to 2010, the annual growth rate of China's outdoor products market retail sales exceeded 47%. An industry insider who wished to remain anonymous told reporters that these statistics were overly conservative, with the actual outdoor market size already in the tens of billions.
The largest domestic outdoor brand, Toread, achieved revenue of 434 million yuan last year, a 47.86% year-on-year increase, with profits of 64 million yuan, up 24.12%. In the first three quarters of this year, Toread's revenue reached 430 million yuan, a 68.77% increase over the same period last year, and profits soared by 76.55% to 53.8 million yuan. Industry insiders also revealed that The North Face and Columbia achieved annual growth rates of over 70% in the Chinese market.
While sports brands are collectively enduring a winter, outdoor brands are welcoming a spring.
Undercurrents brewing
Although the outdoor sports industry has maintained a high growth rate of around 40% for years, its relatively small scale—and the fact that the mainstream traditional sports industry also saw an annual growth of over 20% over the past five years—meant the niche outdoor sector never received sufficient attention. Had it not been for the growing pains faced by domestic traditional sports brands this year, many would still have overlooked this "gold mine."
Currently, capital and talent are flooding into this booming market. So far this year, the outdoor sports industry has seen three major acquisitions. In June, VF Corporation, which owns The North Face, acquired the renowned mountaineering brand Timberland for $2.3 billion. Then in July, U.S. private equity firm Blackstone Group bought Germany’s largest outdoor brand, Jack Wolfskin, for €700 million. By November, Adidas acquired the specialized climbing brand Five Ten for $25 million, signaling its ambition to make a mark in the outdoor sector.
In the capital markets, outdoor-related stocks have also been highly sought after. Since January 2009, VF Corporation’s stock price has risen from below $60 to its current $120. Since announcing the Timberland acquisition in June, the company’s stock has gained over $20. Another industry leader, Columbia, has also seen its stock price rise nearly 50% over the past two years.
The promising market outlook has also attracted a wave of talent from the traditional sports industry. A former employee of Li-Ning, now working for a well-known international outdoor brand, told reporters that many Li-Ning staff, amid the company’s significant internal upheaval, are choosing outdoor brands—not traditional sports brands—as the next step in their careers.
However, despite a decade of rapid growth, the overall development level of the industry remains quite rudimentary. It’s no exaggeration to describe it as a wild, uncultivated land. The top-ranked The North Face and Columbia each have sales of around 1 billion yuan, while the third-ranked Toread is expected to hit 700 million yuan this year. The brands ranked 4th to 10th are all clustered around the 400–500 million yuan range, with little differentiation between them. Overall, the outdoor market is far from forming the clearly tiered structure seen in the traditional sports industry. The gap between the first-tier and second- and third-tier players hasn’t truly widened, leaving the market a blue ocean full of uncertainties.
"Right now, everyone is focused on figuring out how to be themselves, not on how to take down others," said Xiao Ke, product director of a well-known international outdoor brand, to reporters. "The brands are all about 10 steps apart—there’s no need to jump the gun and provoke anyone."
A Different Game
This is an emerging field where the power structures and rules of the traditional sports industry have been completely rewritten—even industry giants like Nike and Adidas haven’t had it easy in the outdoor space.
"Arc'teryx can sell a down jacket for 20,000 yuan and still sell well, but Adidas sells one for 1,200 yuan and barely anyone buys it," Xiao Ke explained. In China’s outdoor market, especially among high-end consumers, price is simply not a concern. "The higher the price, the better it sells."
This year, Adidas has begun making moves in the outdoor sector, not only acquiring Five Ten but also heavily promoting its in-house outdoor series, TERREX. In early September, Adidas opened its first dedicated outdoor products store in China, located in Harbin. But according to Xiao Ke, Adidas’ current approach is off the mark.
"Adidas excels at offering cost-effective products, but in today’s outdoor market, that’s the wrong strategy. What consumers care about now is whether the product looks cool and professional enough," Xiao Ke said. Simply copying the traditional sports industry’s playbook doesn’t work in the outdoor space.
The popularity of pricey high-end outdoor gear is actually an inevitable result of further segmentation within the traditional sports industry. For China’s affluent consumers, the high-end brands of the traditional sports world—Nike and Adidas—no longer meet their needs. In terms of pricing, Nike’s most expensive footwear, the LeBron 9 basketball shoes, retail for just 1,599 yuan, while the average price of professional-grade outdoor shoes is around 1,500 yuan, with premium models easily surpassing 2,000. The MOUNTAIN EXPERT hiking boots from German mountaineering brand Lowa retail for as much as 3,480 yuan—and despite such high prices, the product remains highly sought after.
For many Chinese consumers of outdoor gear, these products are a way to distinguish themselves from the mass market and assert their identity. High-end outdoor gear is becoming the new luxury.
An industry insider told reporters that many people buy outdoor products not out of any professional sports need but simply to flaunt their wealth. Among current buyers of professional outdoor gear, only 20–30% actually use them for outdoor activities. For the vast majority of consumers, the functional features of outdoor products far exceed their actual needs, which is why the outdoor industry doesn’t need to churn out new products every year like the traditional sector does.
"A mature product can sell well for several years without issue," Xiao Ke explained. This has led to a curious phenomenon in the outdoor industry: some brands’ flagship products even have a value-preserving effect, with some dealers hoarding inventory for a year to sell at a higher price the next year.
Professional outdoor products come with a hefty price tag, and while consumers may initially buy them due to trends, this isn’t a particularly rational consumption pattern. Relying on irrational spending to sustain the market long-term isn’t realistic. As a result, the outdoor industry will continue to segment further, with this trend likely heading in two directions.
First, to meet the needs of different groups, brands will target specific consumer segments. This trend is already emerging. Columbia, previously positioned as a premium brand, has started lowering prices significantly over the past two years, with most products on its official site now sold at half price—on par with the average pricing of Nike and Adidas. Domestic brand Toread, meanwhile, positions itself as "broad outdoor," focusing on second-tier markets to avoid direct competition with international brands.
Another direction is segmentation by outdoor activity type. "Outdoor" is a broad concept encompassing skiing, mountaineering, rock climbing, and extreme sports. In the mature outdoor markets of Europe and America, brand segmentation is already highly refined, with specialized brands for individual sports like mountaineering, rock climbing, and skiing—as well as for accessories like tents, sleeping bags, trekking poles, and eyewear. As China’s outdoor market matures, more specialized international brands will likely enter the market. But for now, the industry remains in a very rough-and-tumble phase of development, which actually presents huge opportunities for domestic companies. Those that can strategically position themselves early will gain a first-mover advantage when foreign brands flood in.
Another hallmark of the outdoor industry, compared to traditional sports, is that the sport’s inherent specialization means there won’t be a brand like Nike that spans the full spectrum from low- to high-end. Leading companies in the industry have almost without exception adopted multi-brand strategies. VF Corporation owns multiple outdoor and lifestyle brands, including The North Face and Timberland. The Columbia Group includes Columbia, Mountain Hardwear, and Sorel. This approach is chosen because the outdoor market remains relatively niche, with highly detailed professional divisions in mature markets—making it difficult for a single brand to sustain a company’s growth. A multi-brand, group-based strategy helps companies gain leverage in negotiations with department stores. Domestically, this trend is also emerging. Toread stated in a recent announcement: "We believe that by launching new brands to capture online shoppers and consumers in third- and fourth-tier cities, we can expand our audience without compromising Toread’s mid-to-high-end brand image, thereby boosting sales revenue." Its multi-brand strategy is now taking shape.
"Since the market is still in its infancy, every brand is essentially feeling its way forward, trying out potential directions. But where things will ultimately head is still unclear," Xiao Ke said.
Achilles' Heel
Behind any period of wild growth, there are bound to be hidden issues—that’s the rule for all industries, and today’s outdoor sports market is no exception.
The biggest obstacle currently holding back industry development is the shortage of product talent. Xiao Ke, who comes from the traditional sports industry, has deep experience with this. "For sales and marketing roles, you can always find people if you're willing to pay, but what we lack the most right now are people who can actually develop products."
Outdoor products have their own unique characteristics. Take outdoor shoes, for example—their technical and functional aspects are far beyond comparison with traditional sports shoes. Outdoor shoes differ greatly from traditional sports shoes in terms of production processes such as sole design, last shape, and upper stitching, as well as in research and development. Additionally, since the entire market is still in its cultivation phase, it's also quite difficult to grasp consumer demand points. As a result, even experience in the traditional sports industry isn't enough to handle the outdoor sector. Due to the talent shortage, many domestic companies, even if they have the money and factories, still can't produce decent products.
"I'm currently training over 20 trainees. It takes about two years for them to mature, and if I can retain even half of them by then, that would be pretty good," Xiao Ke said. "But that only solves our company's own problem." From the perspective of the entire industry, the awkward situation of product talent shortages will persist for a long time.
The shortage of product talent is becoming the Achilles' heel of the outdoor industry. For foreign professional outdoor brands, since single-brand operations are generally not very large, most rely on authorized domestic agency companies to handle operations. These agencies typically adopt a purchasing model, buying products directly from abroad rather than developing them in-house. The downside of this approach is that it significantly reduces product profit margins. "The profit margin for a single shipment is at least 30% lower," an industry insider noted. It's not that local agency companies don’t want to conduct localized R&D themselves, but they simply can't find suitable product talent.
In the current immature market environment, the constraints imposed by the lack of product talent on brands haven't fully materialized yet, because consumers' understanding of products is still quite basic. As market penetration completes, competition at the product level will inevitably become a key focus in the future.
Beyond internal industry issues, outdoor sports companies will also face challenges from traditional sports enterprises. In fact, some sporadic friction has already emerged between outdoor sports brands and traditional sports brands. This friction is most evident in the competition for retail space in malls. In some large department stores, outdoor brands have begun to occupy the sales spaces previously held by traditional sports brands. The scale of mall retail space is fixed, so the rise of outdoor brands will inevitably squeeze out some underperforming traditional sports brands—a classic case of one rising as the other falls.
Of course, traditional sports brands won’t just sit idly by and let outdoor brands encroach on their territory. Moreover, there’s no reason to give up on the lucrative outdoor market. For international giants like Nike and Adidas, outdoor series products have long existed under their brands, but because they’ve already made substantial profits in the traditional sports sector, they haven’t paid much attention to the outdoor segment. Additionally, considering overall brand balance, they can’t allocate excessive resources to the outdoor field, so their outdoor series have remained lukewarm.
But for domestic brands currently facing a downturn, the outdoor sector is undoubtedly a lifeline. Every brand is trying to launch outdoor product lines, and this winter, outdoor down jackets have become a key focus for traditional sports brands.
Currently, all players in the outdoor market are still in the stage of preparing for battle—refining products, cultivating talent, and expanding channels. According to industry insiders, it will take about one to two years for everyone’s deployments to be largely in place, and by then, the direct competition between brands will officially begin. So, for today’s outdoor industry, the real show is just getting started.
