While there are fears that the fast-growing Chinese outdoor market could face some of the same issues as the country's glutted sports market, the buzz at the ninth edition of Ispo Beijing remained strongly upbeat: The fair bustled with a growing number of visitors thronging increasingly slick and busy stands.
The numbers provided by Messe München, the organizers of the fair, point to unabated growth. Held over four days starting from Feb. 27, Ispo Beijing welcomed 27,800 trade visitors, an increase of 14 percent compared with last year. The number of exhibitors climbed by 18 percent to 415 and the number of brands represented at the fair jumped by 10 percent to 567, including 297 Chinese brands. Newcomers included Adidas Outdoor, Briko, Mammut, Li-Ning Adventure, Haglöfs and Klättermusen. The surface covered by the fair rose by 14 percent to 40,000 square meters. Alpitec, the simultaneous specialty fair dedicated to equipment for ski resorts, hosted another 53 companies.
Ispo Beijing, which was held for the third time at the China National Convention Center near the Olympic Bird's Nest, was apparently made accessible to the wider public on the last day of the event, which encouraged some exhibitors to sell directly to consumers, but only a few local suppliers did so.
Discussions at Ispo Beijing were dominated by question marks about the prospects of the Chinese sports and outdoor markets. As reported earlier in our columns, thousands of stores franchised by sports brands were closed down last year as suppliers struggled to clean up the inventories that have been plaguing the market for the last two years.
Several speakers at the outstanding side-program organized at Ispo Beijing pointed out that the problems have been partly caused by the relative weakness of sports participation, meaning that consumers have used sports brands mainly to make a fashion statement and that they could easily switch to the next big thing.
And they warned that the same could well happen with the outdoor market. Soaring consumption of outdoor products in the last two years has been driven by shoppers in malls rather than in hiking and skiing resorts. So, unless brands and retailers work harder to stimulate participation in outdoor activities, consumers could gingerly move on to another alternative in a few years. It was therefore pointed out that the national industry ought to invest more in grassroots marketing to create a sizeable community of active people who buy gear for going outdoors.
But for the time being, most players appear unconcerned about such warnings on oversupply and potential overheating in the Chinese outdoor market. Among many examples of continued investment, Sego Sports, a big East Coast sporting goods distributor and retailer, aims to open about 200 stores for outdoor footwear alone in the next years. Another example is Shehe, the former distributor and present manufacturer of Marmot Mountain: Shehe wants to add between 80 and 90 corporate stores trading under its own banner to its current store network in the course of this year.
Foreign brands are still rushing ahead to expand in the Chinese market as well. Black Yak, the South Korean outdoor brand with global ambitions (we ran a big story on them earlier in our Outdoor Industry Compass), already has 175 stores in China and wants to open another 46 this year, mostly in department stores. The list of companies in the outdoor category that are still eager to open their own or franchised stores in China reads almost like an encyclopedia of the outdoor business.
Ispo Beijing's own expansion has been aided by the fact that Chinese brands are still so busy in their own market that they hardly have time and resources to explore international markets. Kailas, the big Chinese outdoor brand, which sees itself as the number three in the market behind Toread and Columbia, but in front of The North Face, expects to expand its own retail network to about 200 stores in 2013, compared with 130 last year and 80 in 2011. Baggio Zhong, the company's founder and chief executive, explained that he saw no reason to spend money on international investments when his company still had plenty of scope to expand easily in China. He stubbornly denies any ambition to take his business to the West, although fewer and fewer people are willing to believe him in this matter.
Another reason behind the continued expansion of Ispo Beijing is that many players yearn for more insights into the rapid changes in the market – and particularly the shift in the Chinese retail landscape. There are widespread fears that specialty retailers will suffer in the coming years, since they often lack the skills as well as the financial backup required to grow their business and compete.
This comes at a time when many outdoor brands, even the big ones, are in fact increasingly eager to work with specialist retail operators who are also able to sell equipment and to provide appropriate service to the outdoor community. One example is Adidas Outdoor, which showed at Ispo Beijing for the first time; another is The North Face which did not show (yet) in Beijing, but will do so at Asia Outdoor in Nanjing in the summer.
It appears that both of these fairs have found their own public and purpose, with distinct approaches. Ispo Beijing is often more relevant to brands in the winter sports business, which mostly try to move into the Chinese market from the north, through Beijing. Then again, Nanjing is close to the big cities like Shanghai in the central section of China's prosperous East Coast.
When it comes to the visitors, Ispo Beijing has a more international flavor, due to the many foreign executives who attend the fair. Some exhibitors shared their impression that Ispo Beijing was by far more abundantly visited by buyers from larger retail operations and a specifically Chinese group of trade professionals who act as middlemen between the brands and the shopping malls. At Asia Outdoor, which has started to cover the bike sector as well, there is larger number of smaller specialty retailers.
The team behind Ispo Beijing provided strong support to both Chinese and international brands at the fair. National villages were set up to help smaller brands garner more exposure, probably with financial help for export promotion from the respective governments. For example, Italian brands were well-represented with wide ranges of footwear and several smaller categories. The concept of bundling national brands worked even better for exhibitors from the U.K., which caught the eye even though they often had small stands. A special case was the Austrian village, which enjoyed the support of the neighboring and partly integrated Alpitec show. It represented an important part of the snow sports section. On the other hand, the French village did not exactly draw the crowds.
The next Ispo Beijing will be held at the China National Convention Center on Feb. 19-22, 2014. Read more details on the Chinese outdoor market in our Outdoor Industry Compass. A separate report on some of the exhibitors in the growing action sports section of Ispo Beijing is also featured in this issue. Other reports on the side-program and the Chinese winter sports market will appear in the next issues of SGI Europe, as a prelude to an in-depth report on the Chinese sporting goods market that we plan to release early next year.