China’s sportswear surge: A golden opportunity for luxury

China’s sports and sportswear industries are experiencing unprecedented growth, presenting a lucrative frontier for luxury brands that incorporate sportier elements into their offerings. A rising focus on health and fitness, along with the success of domestic sportswear giants like Anta and Li-Ning, underscores this transformation. Anta, for instance, has notably surpassed global heavyweights Nike and Adidas in mainland China. Its revenue reached 33.74 billion RMB ($4.7 billion) in the first half of this year, outpacing Nike China by 20% and Adidas China by 160%, according to Daxue Consulting. This success illustrates the increasing influence of homegrown brands that chime with local culture and the broader guochao (national pride) movement. These factors are helping to power a thriving sports market in China. By 2022, the market had surpassed $461 billion, up 6% YoY. More recently, social media engagement around summer sports grew by 34% between March and July of this year, underscoring consumers’ rising interest in a variety of sports, from hiking to river tracing. This growth is not limited to tier-1 and tier-2 cities; emerging demand from smaller cities has broadened the market’s reach, providing fertile ground for brands looking to engage a diverse audience. Anta’s success stems from its ability to tap into guochao while expanding internationally, with acquisitions like Amer Sports (which includes premium brands Arc’teryx and Salomon) broadening its appeal. Li-Ning, another key domestic player, posted 7% YoY revenue growth in 2023, according to McKinsey’s latest China Brief, further affirming the shift toward brands that embody Chinese cultural pride. Luxury’s opportunities Luxury brands have a unique opportunity to capitalize on this shift by integrating elements of Chinese culture into their sportswear lines. According to Daxue Consulting, consumers are increasingly looking for sports products that offer multi-functionality, such as quick-drying and waterproof features. This demand opens up avenues for luxury brands to introduce high-performance sportswear that combines premium quality with cultural relevance, catering to the growing segment of affluent Chinese consumers who value both style and substance. The rise of niche outdoor sports like surfing, river tracing, and indoor climbing further amplifies the market potential for brands. Water sports alone accounted for 14.5% of social media conversations on Xiaohongshu, Douyin, and Weibo in the summer of 2024. This diversification of sporting activities provides luxury brands with a chance to position themselves as providers of both performance and status. Labels that offer high-end, technically advanced gear for these activities can capture the attention of China’s younger and more adventurous consumers. Athleisure has grown to become a dominant force in China’s sportswear market. Forecasts suggest that this category will grow by over 9% annually, with yoga apparel alone expected to reach $3 billion by 2028. The popularity of this category aligns with a broader trend where sportswear becomes a lifestyle choice rather than just athletic gear. Consumers, especially those from younger demographics, seek versatile apparel that transitions seamlessly between gym, office, and social settings. Luxury brands like Prada and Dior, which have already introduced athleisure elements into their collections, can further strengthen their position by expanding into limited-edition sportswear lines that blend cutting-edge performance with signature aesthetics. Additionally, deploying athlete endorsements has proven effective in capturing consumer interest. Data from Daxue Consulting reveals that athlete-driven campaigns resonate more with Chinese consumers compared to traditional celebrity endorsements, due to the athletes’ perceived authenticity and alignment with national pride. Louis Vuitton’s collaboration with Olympic gold medalist skier Eileen Gu is a prime example of this strategy. Her endorsement has helped the brand connect with China’s affluent youth, blending athletic achievement with luxury. Collaborations like these enable luxury brands to draw on the emotional connections consumers have with national pride, cultural identity, and sports excellence. Localized strategies To effectively take advantage of China’s sportswear boom, luxury brands must adopt a strategy that blends cultural alignment with cutting-edge innovation. Data shows consumers increasingly value brands that offer multi-functional products with a strong cultural narrative. This positions luxury brands not just as providers of status but as essential facilitators of lifestyles centered on wellness and cultural pride. Investing in localized strategies – such as leveraging guochao, collaborating with top-draw athletes, and creating high-performance gear for emerging sports – will enable luxury brands to strengthen their market presence. Moreover, the ability to navigate regional preferences, from tier-1 cities to emerging urban markets, can unlock new growth opportunities. By maintaining a balance between global allure and local resonance, luxury brands can enhance their relevance in China’s dynamic and competitive sportswear market, transforming potential challenges into sustainable growth and deepening consumer loyalty.

China’s sportswear surge: A golden opportunity for luxury

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Published October 21, 2024

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China’s sportswear surge: A golden opportunity for luxury