CC Sportswear Retailing in China 2010 : A Market Analysis
This report covers sportswear retailing in China. The report includes coverage of all significant sportswear retail outlet formats, including department stores, stand-alone and branded fashion chains. Also covered are the sales of sportswear by sector.
The total sportswear retail market is estimated to reach a value of RMB124.20bn by the end of 2010. Retail sales value increased by 254% between 2004 and 2010.
Per capita sportswear items sales grew by 233.2% between 2004 and 2010 thanks to increased spending power across a wider section of the population, in turn thanks to strong increases in average wages. However, volume sales have surpassed value sales due to retail price weakness, with average prices declining by almost 10% across the 2004 to 2010 period.
The weakness of retail prices, caused by intense competition (particularly in the mass market), continues to put pressure on retailer’s margins, forcing them to improve operational efficiency and to market more heavily in order to increase store footfall and raise purchasing rates.
The strong levels of competition in the tier-1 and -2 cities is driving retailers to up their plans for regional expansion, ranging from modest, selective targeting to some retailers forecasting very rapid outlet expansion over a short period of time. As well as new stores, there is a steady stream of new foreign and domestic brands adding to the competitive frenzy. Smaller, successful brands and chains will likely become targets for increased mergers and acquisitions activity in a market that will need to begin consolidation.
China’s consumers are increasingly wealthy, but they are also very price conscious. A strong sense of value for money does not automatically mean they prefer cheap, and they tend to be willing to pay more for better quality. The rapid growth of the Chinese economy means that things change fast, including fashion trends, and this means that Chinese consumers are very fickle about fashion. Already, sportswear has peaked (from a high point in 2008/09, in the wake of the Beijing Olympics) and outdoor wear is increasingly the sector where growth is accumulating.
Younger men tend to be the key consumer group for sportswear, and increasingly all consumers are using internet shopping, if not to actually make purchases, then at least to browse for competitive prices and make price comparisons between competing brands.
The future market looks set for continued steady growth, helped by continued average wage increases, as well as the emergence of significant consumption within rural communities, and the continued rapid urbanisation of the Chinese population. The latter factor is helping to increase urban population concentration, bringing more people closer to more retail outlets, raising footfall and purchasing frequency. However, retail price weakness will continue to be a problem, thanks to strong competition in all sectors.
Access Asia forecasts that the total market value will grow to approximately RMB184bn in 2015, up from RMB135bn in 2011, in constant 2010 price terms. Outdoor wear will continue to be the strongest growth sector of the market, increasing by about 46% between 2011 and 2015, with outdoor footwear being the fastest growth sector within this, rising by about 48% over the same period.
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