Regardless of the expected slowdown in the growth of the Chinese sports market this year, interest in the country’s outdoor and winter sports business continued to thrive, as witnessed at the Ispo China fair in Beijing earlier this month.

About 13,500 visitors attended the fifth edition of Ispo China, which was an increase of 17 percent compared with last year, with more than 300 brands exhibiting on about 25,000 square meters. Among the novelties at the three-day event was a tie-up with Alpitec China to display a wider range of winter sports products, including equipment for resorts. The fifth outdoor retail conference organized during Ispo China was packed with about 160 Chinese retailers eagerly scribbling notes. Visitors also made abundant use of a new match-making service, hooking up international brands with potential Chinese distributors.

The Chinese outdoor industry association reported that sales of outdoor products in China reached about €370 million in 2008, an increase of nearly 50 percent. However, this expansion was driven by openings of mono-brand stores, as the largest multi-brand outdoor retailers admitted that their comparable sales had barely risen.

The weakest growth last year came from around Beijing, partly due to the Olympic Games, which made it harder for consumers to move around. Furthermore, after the cold winter of 2007, many retailers had fully stocked up. But they were affected by a relatively warm winter, as Beijing saw its first snowfall of the entire season last week.

With the more cautious consumer climate in the country since the end of last year, the growth of the Chinese outdoor market should slump to about 15 percent this year. Quite a few specialized distributors admit that they have been disappointed by the slow spread of outdoor sports in China, meaning that the bulk of their sales is still generated by more volatile consumers of casual outerwear.

The North Face and Columbia are still the market leaders, along with Ozark and Toread, two Chinese brands. On the apparel side, they are followed more surprisingly by Northland, the Austrian brand, which has enjoyed heady growth due to the investments of its Chinese distributor. Furthermore, the latest Ispo China highlighted interest by many other brands with a variety of business models (more about this in the upcoming edition of The Outdoor Industry Compass).

The market research conducted by the Chinese industry association showed that in 2008, only about 40 percent of sales went through such outdoor stores, while department stores made up nearly 57 percent of the Chinese outdoor market. The remaining 3 percent came from the internet and other channels.

Along with Fire Fox and Green Ant, the most convincing example of multi-brand outdoor retailing in China is still Sanfo. After six store openings in 2008, half of them in Beijing and the other half in Shanghai, the retailer has 17 stores around the country, with an average size of about 400 square meters. It will be adding another five this year, starting with a store in Nanjing. So far its strategy has been to gain visibility by concentrating store openings in Shanghai and Beijing – the location of 11 Sanfo stores.

Sanfo’s sales reached about RMB 100 million (CONVERSION) in 2008, up by roughly 30 percent, although comparable sales were flat. Apparel makes up about 55 percent of Sanfo’s turnover, led by expensive brands such as Arc’teryx and The North Face. However, Sanfo strongly distinguishes itself from other retailers by selling 150 brands of apparel, footwear and equipment, which chiefly draws outdoor enthusiasts.

Cora, the China Outdoor Retailer Association, is striving to stimulate the emergence of more specialized outdoor retailers. It has organized trips with retailers to the United States and Japan, as well as courses to teach retailers about merchandising and inventory management. After all, by far the majority of outdoor retailers in China have been in business for less than five years.