Cotton, running and celebrities, the secret sauce to China’s activewear explosive growth

After pumping up the global luxury goods market, Chinese savvy – and wealthy – consumers are paying the athleisure niche a similar favour. Data from Euromonitor International revealed that the sportswear market in China is expected to grow to 43.1 billion dollars by 2020, surpassing the luxury-goods market.

Furthermore, according to market experts, the Chinese sportswear market has been growing quickly in the past few years, eating into the luxury-goods market after the latter suffered the consequences of a more severe anti-bribery policy and the first aftermaths of the country’s economic slowdown.

To this point, Reuters reported earlier this year that "GPS sport watches, compression leggings, and hydration packs are the new must-haves for wealthy Chinese, pumping up the multibillion-dollar sportswear industry at a time when China's elite are reining in spending on more traditional luxury brands."

Aiming to gain a competitive edge in such a promising market, U.S. companies have been the first in tapping on such a fast-growing opportunity. Adidas is leading the charge with the announcement of 3,000 more stores opening in the country in the next five years, expanding from 9,000 to 12,000 stores.

Running and cotton, a winning combo in the buoying Chinese athletic apparel market

But, what are the main drivers behind this new market? Euromonitor International report on Sportswear in China found that running is increasing in popularity because “it does not require a specific field or equipment, with very low entry barriers for ordinary consumers. Meanwhile, runners can eagerly and easily share their successes via their personal social media accounts such as WeChat, to have a sense of accomplishment. The rising passion for running amongst average consumers gave rise to the rapid growth of running footwear and apparel.”

This passion for running has proven a fruitful one for the leading sportswear brands, which have seen their sales and profits soar in Western Europe and North America after a similar fever hit the fitness-conscious Millennials.

Like Westerns, the Chinese don’t wear their activewear exclusively for exercise. The Activewear Study run by Cotton Council International (CCI) and Cotton Incorporated shows they also wear it for running errands (40 percent), shopping (42 percent), around the house (39 percent), out to eat or a movie (33 percent), and doing yard work outside (27 percent). Nearly 6 out of 10 consumers (59 percent) choose activewear for other activities because it’s comfortable.

Part of this frenzy is also to be explained by this search for comfortable garments, which has further push cotton consumption. The same research indicates in this regard that, regardless of activity preference or exercise level, cotton (47 percent) is by far the overall fabric preference for activewear, followed by cottonblends (20 percent). In fact, 69 percent of polled Chinese consumers said it’s “the only fabric/one of the few fabrics they consider” when shopping for athletic apparel. Other fibres sought after yet significantly less are rayon (7 percent), and polyester (4 percent), according to the Activewear Study.

Looking ahead, data shows that more growth is to come as Chinese consumers currently do not own a lot of activewear pieces. On average, they own 2.5 T-shirts, 2 compression or tight-fitting shirts, 2 tank tops or sleeveless shirts, 2 pairs of shorts, and 2 pairs of trousers.

Celebrities, the best bait for Chinese sportswear consumers

In a recent survey, Prosper Insights & Analytics found that generally, Chinese brands are preferred by 68 percent of consumers. That compares to 26 percent who seek U.S. brands, 20 percent who prefer Korean styles, 18 percent who look for European labels, and 13 percent who buy Japanese brands.

Aware that Chinese consumers prefer Chinese brands, foreign labels such as Nike, Puma or Adidas are seeking for celebrities’ endorsement to gain market share. More than 4 of 10 Chinese consumers (41 percent) say celebrity endorsements are “somewhat influential,” according to the Activewear study.

However, Matt Powell, sports industry analyst for research firm The NPD Group, stressed in a recent interview with ‘Forbes’ that savvy marketing and a high-profile celebrity endorsement isn't enough: the gear needs to be compelling too.

The Activewear study finds Nike (26 percent) and Adidas (20 percent) are the top activewear brands purchased in China by all consumers, followed by local brands such as Li-Ning (16 percent), Anta (10 percent), 361 (7 percent), Xtep (4 percent), and Qiaodan (2 percent).

Meanwhile, other Western names are on the rise, with Under Armour expecting its sales in China to increase 25 percent per year until 2018.

Adidas and Nike sales growth over time

Image: Adidas Facebook

 

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