Models display outdoor sportswear at a fashion show during the ISPO Beijing trade show last month. [Provided to China Daily]

More international brands have pulse on growing sports equipment market

Among hundreds of exhibitors at the International Tradeshow for Sports Equipment and Fashion in Asia (ISPO) last month was Massimo Fregonese. He was hoping to make his pitch to shop owners to get Camelbak hydration packs and water bottles into their stores.

After entering the Chinese market in 2009 with the help of an agent, the outdoor sports equipment company sold 70,000 water bottles last year. The average price for one bottle is 200 yuan ($32, 24 euros).

"We are not planning to set up our offices in China as we are satisfied with the performance of our distributors," says Fregonese, director of the sales and marketing department with Camelbak International LLC, based in California.

Camelbak isn't the only company looking into the increasing popularity of outdoor sports and the swelling middle class in China. Many European and US companies are establishing subsidiaries or finding partners in China to capitalize on the growing Chinese outdoor product market.

The retail sales of outdoor equipment sold in China reached 10.76 billion yuan in 2010, up from 1 billion yuan in 2005, according to the China Outdoor Commerce Alliance (COCA).

ISPO, an event organized by Messe Munchen International, intended to help international brands enter the Chinese market. The three-day exhibition at the end of February attracted 516 brands, among which 312 were from overseas.

Czech Republic company Alpine Pro, the official partner of the Czech Olympic Team since 2009, started selling clothes, equipment and footwear in China in 2010.

"We have opened 25 stores around the country, and we are extending our retail network by selling our products in retailer's stores, such as Sanfo, the most influential outdoor products chain store in Beijing," says Tomas Tauchman, general manager of Alpine Pro China Ltd.

Since it is mostly known for ski and snowboarding attire, Alpine Pro is collaborating with ski resorts and the China Ski Association, which means ads for its products are displayed during major winter athletic events.

Positioned as a high-end outdoor sports gear brand, the price for one Alpine Pro coat ranges between 1,200 yuan and 4,500 yuan.

"Our most popular product here is the ski suit. The sales volume grows 100 percent every season in China, and we attach much importance to this dynamic market," Tauchman says.

However, Tauchman is under pressure after witnessing the budding of numerous brands in the past two years.

Out of the 717 brands currently devoted to outdoor product in the Chinese market, 367 of them are foreign brands. And, according to COCA, 81 new foreign brands joined the market during 2010 and 2011.

"But I still have confidence as we are a well-known brand, and it is much easier to build market awareness here. We never stop bringing stylish designs from Europe; 80 percent of our products for every season are totally fresh," he says.

Before setting up shop in China, Alpine Pro China established a product research center in Zhejiang province in 2008 especially for the Chinese market.

To cater to Chinese consumers, products sold in China are different from those in Europe in terms of style, color and size.

In contrast with the long history of outdoor sports in the West, which originated in the Alps in the 18th century, it wasn't until 1989 when the first outdoor sport civil-society group was founded in China.

"The number of our members has climbed to more than 1 million from just hundreds in the first year of 2003," says Pu Minghui, marketing director of Lvye.cn, one of the earliest websites to sell outdoor gear in China.

Pu says most of its members are in favor of foreign brands. Before the Internet made overseas products so readily available, Lvye's customers tended to purchase products from abroad through purchasing agents.

"Brands rushing into China in 2010 or 2011 think highly of the potential market. In fact, the market is still in its infancy as Chinese outdoor sports enthusiasts remain a minority," Pu says.

Chen Lichao, 27, manager of a driving school in Chengdu, Sichuan province, is a biking enthusiast. He says he is also a fan of Patagonia, a top California-based brand that manufactures clothing and gear for outdoor activities.

"I used to buy clothes through its official website, and filled in my friends' mailing address in the US. My friends would bring them back to me," Chen says.

Now he can try on and buy the same products in China, even if they are much more expensive because of import taxes or fees charged by agents, because more physical stores are carrying more foreign lines.

"The price is not a problem for fans of the brand, like me. I often go to Sanfo to buy jackets, backpacks and trousers," he says.

Lonsdale London, a famous British boxing and clothing brand, officially entered the Chinese market last year with the establishment of Zhejiang Lodestar Garment Co Ltd.

"We are focusing on apparel. We have opened 76 stores in first- and second-tier cities in less than one year, and we are planning to expand to 200 stores at the end of this year," says Zhang Xiaozhi, marketing director of the company.

Zhang says the company that sells apparel covered in iconic British logos will mainly open stores in shopping malls.

The rapid expansion of Lonsdale is an example of the new trend that the outdoor product industry isn't just concerned about function. Fashion is becoming just as important as outdoor sports grows from small and professional activities into phenomena loved by many.

"If you want to sell more products, it is better for you to choose products in accordance with the public's taste. In general, fresh and avant-garde designs are more popular; some people even use them as daily accessories," says Li Meina, marketing director of Beijing Snowpeak Technology & Trade Co Ltd, the agent for Camelbak.

Aside from reaching out to more than 1,000 outdoor specialty stores and 300 department store sales terminals, Snowpeak, also the agent of other five outdoor accessory brands, has started to enter the e-commerce arena by cooperating with individual online dealers, such as Tmall.com, China's biggest business-to-consumer website.

By utilizing the contacts of agents in China, German brand adidas started developing its eyewear market in China.

The average price for a pair of adidas glasses is 2,000 yuan. Consumers can buy the glasses in adidas' stores or outdoor retail stores, including Bull Bike, one of Hong Kong's largest bike shops, and Baodao Optical, an optical retail chain store.

However, for adidas, the biggest hurdle is to educate Chinese customers about the necessities of professional equipment.

"Although an increasing number of people have the time and money for recreation and leisure sports, they don't know how to protect themselves while doing sports," says Feng Ruoxun, the assistant marketing manager with Shanghai Shangjia Optical Co Ltd, the largest agent for adidas eyewear in China.

"It is a long road for us. We sell 10 to 15 pairs of glasses in our best-selling store in China, compared with 50 to 80 in a European store," Feng says.

Confronted with the overwhelming flood of foreign brands, Chinese outdoor sports gear makers are paying attention to fierce competition.

"It is helpful in promoting the development of the whole industry as more brands are striving for the market share. At the same time, some small businesses will disappear in the competition," says Kang Tai, marketing director with Beijing Toread Outdoor Products Co Ltd.

As a local brand with a history of 13 years, Toread has more than 1,000 stores around the country, and its turnover reached 434 million yuan in 2010, an increase of 47.9 percent from 2009.

Kang says because the Chinese company is more familiar with consumers' demands, it won't spare any effort to underline the widespread outdoor sports market, not just minority sports.