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BEIJING — Outdoor brands are looking to capture a piece of the growing market in China.
As disposable incomes rise, Chinese consumers are turning to the outdoors as an outlet for relaxation and family time. Hiking, trekking, cycling, camping, running, skiing and snowboarding are becoming popular recreational activities for middle-class Chinese.
China’s outdoor market is worth 50 billion renminbi, or $8.16 billion, a year, according to Junyan Hu, a senior research fellow at the Institute of Textiles and Clothing at The Hong Kong Polytechnic University, who spoke at a forum during last month’s ISPO Beijing trade show. He noted this segment has experienced an average growth rate of 35 percent annually in retail sales for more than a decade.
The 10th edition of ISPO, which ran Feb. 19 to 22, attracted 637 exhibitors, compared with 567 last year. Attendees included Adidas, Mammut, Oakley and Haglöfs. China’s own domestic heavyweights like Li Ning, Toread and Kingcamp were also present. The show, an offshoot of the IPSO Munich trade show, is set to become a biannual event, with a summer edition slated for 2015 in China. More than 30,000 visitors attended the show, an increase of 8 percent from the previous year, according to organizers.
The outdoor segment is growing quickly, mainly driven by China’s younger generation, but it’s also becoming more niche and high-end as consumer needs and demands become more specific, observed Oliver Chu, general manager of Shanghai Luckyarn Co. Ltd., a distributor of Dryarn, a high-performance microfiber by Italian company Aquafil Group.
Chu said Dryarn entered the China market last year and is optimistic about its debut since Chinese brands, which are now catering more toward the local market, are searching for higher-quality fabrics to bring added value to their products.
“In my past experience with other trade shows, the buyers would first ask the price, take a sample and leave. Now, they want to know about the fabric’s function and the story first, then price,” he said.
Cari Geng, a buyer for outdoor brand Leysin 1854, said the outdoor market in China is still in its infancy.
“The European outdoor market is very mature, but in China it only started about 10 years ago,” Geng said, adding that she was impressed by the offerings at the show, particularly Chinese brand Kailas.
“They’re bringing new ideas, new designs,” said Geng, adding that foreign brands differ by offering more interesting color contrasts, details and functions to their clothes.
Swiss brand Odlo, a leading brand for synthetic sports underwear, was another newcomer to the show and Chinese market.
“The outdoor category is big, and consumers are already knowledgeable about the products, but underwear is still new and niche,” said Odlo’s merchandise marketing director in China, Gao Feng. “China’s economy is slowing, so it’s a tough time for the overall retail market, but outdoor is doing a little better.”
Competition is increasing, and it’s not about the big brands anymore, claimed some fair attendees. Chinese consumer palates are becoming more sophisticated and discerning. The increasing consumer emphasis on quality, high-tech function and design is deepening the pressure for sportswear labels to be on the cutting edge of innovation.
As for trends, fabrics are getting lighter and brighter and feature more high-performing aspects. Louisa Smith, fashion textile forecaster for ISPO, said that since the recession, running has become more popular. Lightweight, paper-thin waterproof jackets that a user can roll up into a ball and base layers that show the zoning of different functional yarns, such as thermal, moisture-management and high compression to protect the muscles, are cropping up.
Smith said she’s glad to see Chinese brands moving away from copying other players’ products and placing more emphasis on innovation and design.
“If you say a garment is thermal regulating or quick dry, it has to be that,” Smith said, noting how she has come across some brands making false claims about their garments.
Just under half of the exhibitors at ISPO Beijing were from China, reflecting a growing trend of homegrown brands catering to the domestic market.
Candy Zhu, product manager of Kingcamp, a Chinese outdoor company offering everything from sleeping bags and tents to apparel, said they are the first brand in China to provide camping essentials to the market. Zhu said camping has become popular in the last few years in China, especially among those who want to unplug on the weekends with their friends and family.
Thanks to increased interest in camping, Zhu said, the company has experienced more than 30 percent sales growth every year since 2010.
Li Ning Adventure, the Chinese sporting goods company’s outdoor line, launched in 2011 in response to this growing trend.
Colin Tout, sales manager of Liaoning Datian Outdoor Products Co. Ltd., a manufacturer of outdoor apparel for brands such as Toread and Kailas, said his company is having a hard time attracting Chinese workers. To keep labor costs down, Tout has hired more North Korean workers. He pays them 1,500 renminbi, or about $245, a month, half of what an average Chinese garment worker earns.
Tout said many factories around his area in northeastern China have been sold and the owners are now thinking of setting up shop in Asia in countries such as Bangladesh, Vietnam, Cambodia, India, Myanmar and Sri Lanka, where the labor is cheaper.
“The average garment worker earns 3,000 renminbi [or about $490 at current exchange] a month in China, but in Bangladesh you can pay them 1,000 renminbi [or $163], so the cost difference is a lot,” Tout said.