The China Outdoor Association (COA) estimates that the core Chinese outdoor retail market expanded by 5.3 percent to about 18 billion yuan renminbi (€2,418.9m-$2,694.3m) last year, marking a significant slowdown in growth compared with previous years. The core market excludes cheap private labels, the outdoor ranges of sports brands and fashion labels.
After soaring increases for much of the last decade, the core market's growth already slowed down to nearly 11 percent last year. The market has been somewhat unstable, with some smaller brands coming and going, and it has seen a continuing shift from mall-based mono-brand retailing to online retailing.
Online sales made up an estimated 15.4 percent of the Chinese core outdoor market in 2015, and the COA report estimates that their share could inflate to 31.5 percent in 2020. The share of the mall-based business, which accounted for 62.9 percent of the market in 2015, is predicted to shrink to 51.8 percent. The rise of online sales appears to affect specialty stores as well, as the COA predicts that their share of the market will fall from 21.7 percent in 2015 to 16.7 percent in 2020.
The COA's research pointed to further concentration among suppliers, with the top ten brands making up 55.9 percent of the market in 2015, compared with 38.5 percent in 2010. The number of brands is continuing to grow, reaching an estimated 830 domestic and international brands.
However, the new entrants often stay away from a previously widespread model based on mono-brand retail distribution. Out of more than 50 brands that moved into the Chinese market last year, the research estimates that more than 40 are selling only online. Among the brands to watch in this context is Pelliot, which started from scratch and was said to have become the fourth-largest outdoor brand in terms of online sales.
Some international sports and outdoor brands are getting started in China with a focus on online sales as well. This appears to be the case for Trespass, which has opened an office in Guangzhou. The Scottish-based company operates stores in Europe but its development in China is not based on the rapid opening of branded stores, as occurred in previous years.
The shakeup of the last two years has also led to some reshuffling and unusual situations. It was reported in May that the chairman of Kolumb, an influential Chinese brand with reported sales of 148 million yuan (€19.9m-$22.2m) in 2014, went missing shortly after his resignation and just a few months after the company listed on the over-the-counter stock market. The South China Morning Post reported that he had previously taken a loan against his stake of more than 40 percent in the company.
The presentation was held by Stanley Zhu, a fluent English speaker who was previously vice president of sales at Kailas, one of the leading specialist brands in China. He left the company in April and his function was split between several other employees.
Zhu said that the leading Chinese brands, such as Toread and Kailas, are becoming increasingly articulate about their positioning. Meanwhile, the influence of the European brands appears to be diminishing overall, in terms of market share, brand weight and operating efficiency. As part of his recommendations to raise demand in China, Zhu lauded brands that not only have specific ranges for the Chinese market, but adjust them to various parts of the country, in terms of sizes and colors.
The COA predicts that the market will remain somewhat unstable until next year but will then stabilize and return to more sustained growth. Its forecast is that the core market will expand by about 6 percent this year, then 8 percent in 2017 and 12 percent in 2018.
Apart from the core market, the COA estimates that the low-budget retail market for outdoor products amounted to RMB 11.5 billion (€1,557.7m-$1,718.1m) in 2015, while the fashion brands contributed a turnover of RMB 8.4 billion (€1,138.1m-$1,255.0m) with outdoor products, and the sports brands RMB 7.5 billion (€1,015.9m-$1,120.5m).