China to Become Major Consumer of Sports Supplies Post-Olympics

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Aug. 7 – Four days ahead of the opening of the Beijing Olympics, global sports brand, Adidas, opened its largest store in the world at Sanlitun Shopping Center in the city’s Chaoyang district.

The 3,710 square meter area is one of the 5,000 stores in the country that the company plans to build by the end of the year. Paying a reported US$80 million to be a major sponsor of the games, Adidas has since opened an average of three stores daily in the past three years with now more than 4,000 stores in 500 cities.

By 2010, Adidas expects its 6,300 stores to generate annual revenues of US$1.5 billion.

The bold move signals the country’s potential to become one of the world’s major consumers of sports supplies especially after the Olympics as more Chinese become interested in sports and sports-inspired apparel.

The China Education and Sports Supplies Association (CESSA) says the event will serve to promote consumption of sports supplies and should drive sales volume of sports supplies in the country to RMB80 billion by the end of the year.

The country is set to become the second largest consumer of sports supplies after the United States. According to market research firm, Euromonitor International, while the U.S. apparel and shoe market should increase by 6.7 percent to US$313.8 billion in 2011 from 2007, China’s market should balloon to more than 10 times that rate at a 71 percent increase to US$184.2 billion.

In China, Nike and Adidas hold the top two spots in the industry followed by Chinese brands Li Ning and Anta.

“Chinese people have more money to spend than before and more people developed habits of doing sports. So many of them became consumers of sports supplies, ” Xu Yang, Director of the brand management center of Anta Company, a domestic brand name of sports wear, told Xinhua.

CESSA statistics report that 2003 total sales volume of outdoor supplies increased from RMB100 million to RMB2.6 billion in 2007.

Nike and Adidas sales tend to be strong in major cities like Beijing and Shanghai where middle-class consumers consider status and individualism important but are outmaneuvered when it comes to small, middle-sized cities where locals prefer domestic brands because of their cheaper prices.

“The company’s annual sales volume in China has exceeded one billion U.S. dollars. This goal was realized faster than we expected,” Nike brand president Charlie Denson told Xinhua. “Beijing Olympics is a perfect opportunity for us to consolidate our leading position in Chinese market.”