China has a problem with excess weight and obesity. Children are too fat and the number of people with diabetes has increased from less than one percent to twelve percent in the last 30 years – as reported by the Journal of the American Medical Association. The scale of this development can best be expressed in absolute terms: that means that almost 100 million Chinese people suffer from diabetes.
“Developments that took many decades in Europe, take place far more quickly in China”, explains Paul März, head of ISPO's Chinese offices in Shanghai and Beijing. Affluence and prosperity are reaching ever more people, and faster than ever before.
The increased influence of western culture is not just restricted to Hollywood films, but is also reflected in eating habits. Sweets and fast food are on the menu for more and more Chinese people. The long-standing one-child policy may have played its part: parents concentrate entirely on that one child, and more adults can provide material support (or food and drink) for fewer children.
The federal government has reacted by producing official guidelines in an attempt to help the Chinese people realise the importance of health, fitness and losing weight. “The government's wants to get half of the population on the move”, says März. The official goal is for people to engage in sporting activity at least three times a week.
A study commissioned by MMI Shanghai, the Chinese subsidiary of Messe München International (MMI), examined the market potential in China for international fitness companies. The nation's development from a production location to an attractive consumer market is opening up many opportunities for these companies.
The fitness trend can be seen across the country: there are approximately 5,000 fitness studios in China, with around 1.5 million members – and both numbers are rising sharply. There is a basic understanding of health concerns, but these are most pronounced in the major cities, such as Beijing, Shanghai and Guangzhou. People there are more familiar with western trends than in small villages in the countryside.
Infrastructure providers are the first to profit from this trend. “That includes ski regions, which are expanding massively, new sport facilities and public fitness centres”, says März, “and this development will then be reflected in the clothing sector.”
China's State Council issued the above-mentioned guidelines in October 2014, announcing the government's intention to reduce regulation and welcome private investment. The government wants to “accelerate the development of the sports industry and promote sports consumption”.
An important step towards opening the market, according to the MMI study, is the decision to introduce tax breaks for high-tech sports companies. “They are talking about reducing value-added tax rates for sporting goods, which would then increase demand”, explains März. The state is also demanding a huge increase in the number of athletic rehabilitation centres and fitness testing centres. Newly established residential areas must have fitness facilities and old residential areas without fitness facilities must be renovated.
China has previously only been relevant as a production location for the sports industry and, according to the MMI study, up to 60 percent of all sporting goods worldwide are produced in China. In Xiamen, the centre of the Chinese fitness industry, there are more than 80 companies with over 500 factories.
The Chinese domestic market is also in the early stages of development. The Chinese government guideline estimates that sports industry turnover can reach 813 billion US dollars (5 trillion RMB in the local currency) in the next ten years.
Unlike the USA, China has not yet made a mark on the global market for fitness consumption. The United States is the largest market for fitness equipment: 40 percent of the goods made in China currently end up in the USA, according to the MMI study. However, China is catching up and could well become an important growth market for international sports companies in the future.