Growth in China’s outdoor market is slowing down, although gains are expected to remain steady for the foreseeable future.
Outdoor gear sales in China totaled RMB24.46 billion ($3.56 billion) in 2017, an increase of just 3.2 percent over the preceding year and the lowest rate of growth for the industry in a decade, according to a new report from Research and Markets. The Chinese outdoor market has been slowing down since 2013 after experiencing a boom from 2008 through 2012.
For comparison, the highest rate of growth during that period was in 2011—a year that saw a 50 percent sales increase over 2010. The latest numbers confirm the end of the boom and point to signs of maturation in the outdoor gear market in China.
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Yet, there is no reason to panic for outdoor gear retailers in the world’s largest apparel-producing country. There are indications that the future still looks bright.
“Despite a slowdown, the outdoor gear industry in China may sustain single-digit growth rate over the next two years, as outdoor sports become more diversified and popular,” Research and Markets said. “Compared with the United States and European countries, China is still home to a growing rather than mature outdoor gear market. Hence, it is expected the Chinese outdoor gear market will maintain the momentum of steady growth over the next five years.”
Differentiation of distribution will play a key role in the future of outdoor-focused brands in China. According to the report, consumers of outdoor apparel are increasingly turning to e-commerce to purchase their goods.
As it is, department stores maintain the largest share of distribution with more than 40 percent of outdoor gear sales. Many outdoor brands in China also use single-brand stores for their brick-and-mortar operations.
But, that methodology will likely change in the near future. A top Chinese outdoor brand saw its market share plummet to just 10 percent as the market became laden with local and niche operations. Research and Markets predicts that the outdoor gear market in China, of which 60 percent is footwear and apparel, will become more “fine and specialized” as it begins to address specific consumer needs.
Chinese consumers are beginning to turn to different channels when looking for apparel and footwear, a trend that will sound familiar to American retailers.
Correspondingly, there has been a rise in group buying, communities and clubs for outdoor gear. Competitive enterprises have responded by expanding into a growing number of channels—with e-commerce earning the largest bump in representation.
Domestic apparel sales in China have also been steadily increasing, reflected by a 50.5 percent outdoor market share for local companies. Researchers expect that share to increase as home-grown organizations are able to compete in more retail channels.
Still, their share of the market has been largely relegated to the low-end. Chinese consumers still prefer foreign brands when it comes to high-end outdoor gear and apparel.
