China is all about growth and big numbers, with a population of 1.4 billion and accelerated growth. China has been among the world’s fastest-growing global economies, with real annual gross domestic product (GDP) growth going at a pace described by the World Bank as ‘the fastest sustained expansion by a major economy in history.’
According to the website STATISTA the sporting goods market in China has also witnessed continuous growth with an additional value of 123 billion yuan been created by the sporting goods industry in China between 2008 and 2012. Brands such as stylish Li-Ning, with its ‘Anything is Possible’ slogan and swoosh-like logo, is according to Bloomberg (see bloom.bg/2saApfU) the fastest growing clothing company in the world when it comes to stock market gains, surging ahead of Adidas and Nike.
As a Communist state, activity is often driven by central government and six years ago in 2014, Beijing came out with the now famous policy document ‘Number 46’, which set in place plans to create the world’s largest sporting industry by the year 2025 (see bit.ly/36FGKz9). Since then China has invested in European football clubs, its own football super league, worked on building local fan bases and of course secured the 2022 Winter Olympics, to be held in Beijing (making it the only city in the world to have hosted a summer and winter Olympics).
More people. More Active
The Chinese government has also been keen to increase sports participation and help to develop a more active population, with the development of sports facilities and the commercialisation of sports. According to the Hurun Research Institute in 2014, over 90 percent of Chinese high-net-worth individuals (see bit.ly/2TgT0Cl) exercised at least once a week. Just like in Europe and the US, triathlon is a tantalising option for this market and in 2015, Dalian Wanda Group Co., Ltd. (“Wanda”), one of the leading Chinese private conglomerates, acquired 100 per cent of the World Triathlon Corporation/Ironman for $650 million.
This wasn’t the first sporting acquisition by Wanda who have also bought Atletico Madrid, a large sports marketing firm and in 2017 they acquired the Competitor Group Inc (owners of Rock n roll marathons). They are now considered to be the largest sporting company in the world.
China’s economic growth has created a middle class who are hungry for sport and leisure – and ironically hungry for junk food, with a growing obesity problem, just like in the West. The number of traditional fitness clubs grew by 31.13 per cent in 2018, generating US$6.91 billion in revenues. Another opportunity in triathlon has been spotted by the Challenge Family (www.challenge-family.com), who’ve announced a new event for 2020: “China is a very interesting market for us,” Challenge Family President Zibi Szlufcik told Endurancebusiness.com. “Our last race, Challenge Anhui, reached over one million people with its live stream, so the potential is huge. We definitely think we can take this to an even higher level with not only Challenge Anhui, but also the now introduced Challenge Wuhan.”
Tech Advances
Live streams, smart apps and technology play an increasingly important role in all aspects of the sports industry. And here’s another area where China is soaring ahead threatening to topple to the US from its top tech spot, with the emergence and growth companies such as WeChat (which has 1.1 billion monthly users and has recently launched innovative mini programmes which have revolutionised e-commerce) and Huawei.
This growth is of course reflected in sports tech meaning innovative start-ups are looking East. In an academic review from the University of Loughborough created for the football fans’ App JAFA, an online survey was carried out with a goal of understanding the similarities and difference between the Chinese and British sports fans in relation to their likes, dislikes, behaviours and consumption patterns of sports applications. The start-up set about learning what they could, so they could penetrate the Chinese market. One interesting learning and result was that JAFA now have a target Chinese audience of 455 million. This may be exceedingly high, they admit, but if only five per cent of this audience use sports apps, JAFA still has over two million citizens to reach. The survey received 304 respondents, including 265 Chinese and 32 British people as well as seven other nationalities.
Football Crazy
It’s not just small start-ups who are capitalising on China’s passion for sport. The Chinese short-form video platform Douyin (also known as Tik Tok) is attracting British premier league football clubs alongside the big European teams (Barcelona is top of the popularity table). In just five months since launch Liverpool FC racked up 1.1 million followers and by focusing on light-hearted video content, the club earned a combined 6.5 million likes on their posts while generating more than 81 million views. In June 2019, Chelsea football club reported on their web news, that since its launch in November 2018, they had become the second-most followed UK football club on the platform, with 1.28 million followers and over six million total ‘likes’ gained within eight months of launch. On Weibo (a Chinese microblogging website), they say they were the fastestgrowing European football club in the 2018/19 season, gaining over two million new followers, raising their total to 5.3 million. And all of this means cash for the big clubs, Barcleona are reportedly earning £671 per post, and Liverpool £398 per post.
Peeping through the Bamboo Curtain
There’s no doubt that China has embraced capitalism, but it’s naïve to think the Communist state and its politics will not create some barriers for sports businesses from the West. As a report in the online magazine China Briefing points out, ‘As with most investment areas in China, investment opportunities in sports are plentiful but are subject to a large amount of everchanging regulations’ (see bit.ly/2R1YvlA) And back to football, interestingly our very own West Bromwich Albion are the main collaborator with The General Administration of Sport with a plan to build 100 “sport towns” across China as well as five or six “eco sport towns”.
Football, basketball and winter sports are all growth areas in China. According to China Briefing, 300 million people pay basketball and they point out that China officially has the largest beginner market in winter sports. With a huge captive market embracing fitness, health and a central government driving its people to get in shape and put China at the top of all the sporting league tables, it certainly the right time to look East.
Tips for doing business in China
• Understand that ‘face’ matters. Chinese people never want to lose face.
• Respect our cultural differences – old traditions around colour choice and the lunar calendar will still have an impact.
• Understand that politics and business remain intrinsically linked, and the importance of the collective good for all those in business
