The COCA report which was compiled with the support of ISPO BEIJING distinguishes between the evolution of trade on the retail (sales in the shops) and the wholesale level, i.e. the supply by the brands and their representatives to the retailers.
According to the study, retail improved its sales by 10.51 percent to 22.19 billion yuan renminbi (3.01 billion euro) in 2015 over the prior year. Wholesale trade improved its turnover by 12.22 percent to 12.31 billion yuan (1.67 billion yuan).
This evolution allows four assumption: First, it might be possible that retail continues to struggle with oversupply from the vendors – as reported, a long-term problem which has been around in the market for a while now. The continued oversupply might keep the problem of stock excesses in the warehouses of the retailers very much virulent. Second, increased sales on the wholesale side might be a positive indicator in the sense that retail is sort of optimistic for the near future and places orders accordingly.
Third, there may, to some extent, unprecise figures in the market because the brands and their wholesalers often run their own retail operations. Fourth and most important, it cannot be excluded that retail continues to be forced to work with hefty discounts to get rid of merchandise. This policy does not necessarily have an immediate impact on wholesale figures.
Flat evolution of new market players
There are obvious signs that the Chinese market is on its way to normalcy (in terms of a moderate growth rate). One indicator is the development of brands which are active in the Chinese outdoor market. Last year, there were only few new market entries.
The number of Chinese market players continues t be dominant. The COCA report counts 955 of them for 2015. The increase here was slightly above 0 percent over the prior year. Chinese market observers say that one critical factor is the local original manufacturers which have tried to develop their own brands, but have become more cautious in regard to such ventures.
As for the international brands, the situation is not very much better: Those who are trying now – at this late stage to penetrate the Chinese market will no longer find an easy source of quick money, but will have to do their homework skillfully to be successful. The number of foreign brands improved by just 1.6 percent compared with 2014.
Out from the mall and into the specialty shops
The latest figures from the Outdoor Alliance suggest, in addition, a trend to sell less through single-brand stores in the department stores and shopping malls. Instead, the study highlights an increasing number of multi-brand specialty shops. According to the report, the number of single-brand shops in malls declined to 7,451 in 2015 from 7,872 for the first time. This trend corresponds to the increasing expenses in the large malls, notably in the big cities.
The number of outdoor specialty stores went up in return – even though only slightly. In 2015, the number of specialty stores was 2,215 compared with 2,165 in the previous year. The total number of outdoor-related web shops remained almost stable at 673. There were 15 online stores less in 2014 compared with last year.
A slowdown that has not happened – yet
A slowdown in the Chinese outdoor industry was widely expected, but has not materialized so far. As predicted by observers, the shopping malls with their rather fashion-oriented offer and costly selling spaces have been facing increasing difficulties. Simultaneously, the independent specialty retailers are gaining ground. Overall, the outdoor business in China continues to grow, but is marked by shifts in the distribution landscape.