Ｍｏｎｅｙ Ｇｒｏｗｓ ｉｎ Ｔｅｎｔｓ

ＴＡＮＧ　ＹＵＡＮＫＡＩ

Equipment manufacturers are positioning themselves to make the most of a fast-growing trend in outdoor sports

UNDER STARS: Camping, rock climbing, tekking and paragliding are no longer high-brow sports as more ordinary Chinese take to the outdoors in a big way (XINHUA)

Yuan Xinyao is a pretty 20-something and an outdoor sports enthusiast. Three years ago, Yuan took to such sports as rock climbing, skating, boating, trekking and paragliding.

“Outdoor sports offer opportunities for travel and for fresh, exciting adventures,” said Yuan. Later, when she discovered that many others shared her interest, Yuan set up an outdoors club and opened an outdoors equipment shop. “ I meant to promote a healthy lifestyle by bringing people close to nature and helping them make more friends through my club, but never expected to make so much money.”

Although outdoor sporting activities for big companies are a major source of profits for Yuans club, her equipment store is even more profitable. In the beginning, it only sold sportswear and occupied a small room. Now, its business area has expanded to 200 square meters.

Yuan is thrilled to find that her hobby has turned out to be so lucrative. “What a miracle, she gushes.

No longer high-brow

Sports such as rock climbing or skiing were limited to the white-collar class till just a few years ago. But they are now becoming increasingly popular with ordinary folk.

The rising popularity of outdoor sports can be attributed to rising incomes, more leisure time and growing familiarity with global trends, according to industry insiders. Outdoor sports also help ease the pressures brought on by heavy workloads and fierce competition. Challenges posed by such sports are particularly appealing to the young.

In developed countries, sightseeing accounts for only 30 percent of the tourist market with the rest being contributed by leisure and outdoor sports. In moderately developed countries, this ratio is about 2:1.

Given its huge population, China is believed to enjoy great opportunities to expand its outdoor sports industry.

Huge potential

With more Chinese getting hooked on outdoor sports, the sporting equipment industry is expected to rake in hundreds of billions in profits.

Outdoor sports equipment, like special shoes, skis, sleeping bags, tents and various measuring instruments, is now fuelling an industry with an estimated annual output value of 1 billion yuan and annual growth of 30 percent. This is reflected in the recent boom in outdoor equipment manufacturing in Guangdong, Zhejiang, Jiangsu and Fujian provinces and Shanghai.

Official statistics show Chinas outdoor sports market was valued at 60 million yuan in 2000 and 300 million yuan in 2002, but it rocketed to 1 billion yuan last year. Industry insiders are confident the growth for this year will be much higher than before.

According to a sports articles vendor in Beijing, sales of skiing equipment in his store were just a few dozens of sets in 2002, which jumped to 300 sets in 2003 and 700 sets in 2004, and the strong momentum remains this year.

As a result, some shopping malls and supermarkets in major cities, like Beijing and Shanghai, are expanding their business in outdoor sports equipment. In northeast Chinas snow city of Harbin, local retailers say skiing equipment sold like hot cakes in the past winter, with group buyers and tourists comprising the main clientele.

The Shanghai Runtitan Outdoor Manufacturing Co. Ltd. is a China-U.S. joint venture. According to its General Manager Wang Xiaofeng, company sales are growing at 30 percent annually and touched 90 million yuan in 2005.

In the meantime, online sales of outdoor equipment are also thriving.

Currently, the outdoor sports equipment market comprises two distinct parts: one targeted at leisure sports and the other dedicated to expedition requirements. Although a complete set of cheapest-priced outdoor equipment could cost anywhere between 2,000 yuan and 3,000 yuan, people still prefer to buy rather than rent for reasons of safety and convenience. In 2005, the per-capita disposable income of urban Chinese households was 10,493 yuan.

In addition to a flourishing domestic market, Chinese outdoor equipment manufacturers are also grabbing a growing share in the international market.

Customs statistics reveal a 30 percent annual export growth of such equipment. The export volume reached $2.48 billion in 2004, up 37.6 percent over the previous year. At present, the United States and EU states constitute major overseas markets, with the United States alone accounting for almost half of all exports. Tents and courtyard umbrellas are the items with most demand, with the former accounting for two thirds of total exports.

Challenges and opportunities

However, China is not yet a competitive outdoor equipment manufacturer. Chinese manufacturers have been trying to corner the market through low prices and have only recently begun to emphasize quality. A large gap exists between Chinese products and world-famous brands in terms of quality, variety, design and marketing.

The development of outdoor sports equipment in developed countries dates back a century, while Chinas industry is very new. It comprises many small companies and lacks indigenous brands. Many specialty shops sell fakes and end goods (low-quality products left over from normal trade).

The entry of overseas brands undoubtedly exerts pressure on Chinese outdoor manufacturers. Currently, about 80 world-famous outdoor companies have a foothold in the Chinese market. Timberland, a well-known U.S. outdoor sportswear company, recently announced its plan to enter Chinas retail market and has already opened three specialty stores in Beijing, Shenzhen and Harbin. In the next five years, the company plans to set up 70 such stores in China and is now looking for joint venture Chinese partners.

On March 16 this year, the International Trade Fair for Sports Equipment & Fashion (ISPO) signed a three-year partnership agreement with the China Outdoor Retailers Association, to promote the popularity of outdoor sports equipment. On the same day, a high-profile forum gathering outdoor retailers in China was jointly convened by U.S. outdoor equipment company, Gore, and ISPO China, to discuss problems facing Chinas outdoor equipment retail sector.

The China International Outdoor Goods Fair, to be held on May 31-June 3 by the China Chamber of Commerce for Import & Export of Light Industrial Products & Arts-Crafts and the local government of Hangzhou in Zhejiang Province, will provide a good opportunity for Chinese outdoor equipment companies to learn from their foreign counterparts and upgrade standards to international levels.

The years before the 2008 Olympic Games in Beijing are crucial to the development of Chinas outdoor equipment industry, according elites in the sector. They call for concerted efforts of insiders to transform it from a traditional manufacturing industry to an innovation-based one.