The Chinese outdoor business enjoyed a halcyon year, with sales soaring by 57.8 percent to about 11 billion renminbi (€1.4bn-$1.7bn) at retail in 2011. The huge growth was driven by a spate of store openings and more abundant sales in existing stores as outdoor brands became increasingly fashionable, but the market's expansion has slowed down this year.
The figures were compiled by the organizers of the Asia Outdoor fair and the China Outdoor Alliance, who have invested in market research as well as consumer research. The above tally relates only to the core outdoor market, excluding ski, mountain biking, fishing and hunting. Furthermore, it excludes the private labels and cheaper products, as well as outdoor lifestyle products that are not sold in sports and outdoor stores.
The number of stores selling outdoor products jumped by 41 percent to 7,754 outlets all around the country last year, but with a particular focus on the north of China, where the number of stores soared by 64 percent to 3,323 stores. About 62.1 percent of these outlets are mono-brand stores, compared with 37.9 percent multi-brand and specialty stores. However, the multi-brand stores account for more than 80 percent of the sales of technical products such as climbing equipment and larger backpacks.
The sudden expansion has hugely inflated the stock available in the market. Knut Jaeger, chairman of German Messe, which organizes Asia Outdoor, predicted that this would reduce the growth of the market this year – estimating that it expanded by 15 to 20 percent for the first half of the year.
Apparel commanded a share of 52 percent in the core market last year, compared with 25 percent for footwear, 12 percent for backpacks and 11 percent for other equipment. This core market is fairly concentrated, since the 10 leading players held a share of about 58 percent, led by Toread, Columbia and The North Face, and the 20 largest brands accounted for 72 percent of the market.
Still, the number of brands available in the Chinese market grew again last year, by 17.1 percent to 356 for foreign brands and by nearly 23.9 percent to 218 Chinese brands, leading to an overall growth of 19.6 percent to 574 brands. The share of local brands in the core market climbed to more than 45 percent in 2011, and the organizers of Asia Outdoor estimate that the Chinese outdoor brands will have overtaken foreign brands by 2014.
To provide an estimate of the wider outdoor market, the researchers studied the sportswear business, which was estimated at RMB 101.7 billion (€13.13bn-$16.11bn) last year, and found that 3 to 5 percent of that market consisted of outdoor products. This amounts to between RMB 3 billion and RMB 5 billion (€387.3m and €645.4m-$475.2m and $792.1m), excluding the likes of Adidas Outdoor, which has started to open dedicated stores in China and is regarded as part of the core market.
Then, the researchers focused on the fashion and leisure apparel market, which was estimated at roughly RMB 500 billion to RMB 560 billion (€64.54bn and €72.29bn-$79.2m and $88.7m) last year. Conservatively, they figured out that about 1 percent of this market should be added to the wider outdoor business, amounting to between RMB 5 billion and RMB 5.6 billion (€722.9m-$887.1m).
At the lower end of the market, the organizers of Asia Outdoor estimated that Décathlon reaped sales of about RMB 3.3 billion (€426.0m-$522.8m) in 2011, with an estimated RMB 1 billion (€129.1m-$158.4m) generated by outdoor products, mostly from the Quechua private label. They then estimated that Décathlon accounted for about 20 percent of the lower end of the outdoor market, excluding fakes, so that this entire low-cost market could be estimated at about RMB 5 billion (€645.3m-$784.4m).
Taken all together, between the core outdoor market and the shares of outdoor products in related sports and fashion markets, the wider Chinese outdoor market was estimated at some RMB 24.6 billion to RMB 26.6 billion (€3.18bn to €3.43bn-$3.90bn to $4.21bn) in 2011. The core market enjoyed the strongest growth, while the lower end of the outdoor market inflated by 42 percent, the outdoor share of the fashion market increased by 24 percent and the outdoor share of the sports market grew by 13.3 percent. To this should be added corporate sales, which have also expanded significantly since it has become fashionable for companies to offer outdoor garments instead of fashion clothing.
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