Japanese Sports Equipment Maker Latest To Eye Expansion In China
A trend that has developed very quickly in China, and is likely to only pick up further momentum in coming years, is the growing popularity of golf. Though exorbitant membership fees and the cost of outfitting oneself in the latest golfing gear keep the sport forbiddingly expensive for virtually all but the country’s wealthy elite, the rate of new course construction and the number of foreign golf equipment and clothing brands entering the China market rises by the year.
According to recent estimates, there are now around 300 golf courses in China, including the world’s largest (Mission Hills Golf Club), and its golf industry is estimated to be worth nearly $7 billion annually and growing. Considering this revenue comes from only a sliver of the population, it’s no surprise that major golf manufacturers are bullish about the potential of China’s expanding middle class to become avid golfers much in the same manner as their counterparts in Japan and South Korea in past decades.
Recently, the Japanese sports equipment maker Yonex announced the establishment of a Shanghai-based subsidiary in China to make and sell golf items. According to the Wall Street Journal, Yonex’s new Chinese subsidiary will feature “products specially created for Chinese customers as well as goods from its regular catalog sold in other overseas markets,” although the company declined to provide further details about the products it has in mind for the China market.
Much of the expansion plan that Yonex (and many of its competitors) has in mind for China hinges on the perception that China will be “the next Japan” for the sport of golf. Currently, as the WSJ points out, Japan is the world’s second-largest golf market in terms of demand after only the United States, with 9 million active players in the country today. However, the country’s aging population and lingering economic stagnation means the sport has likely hit something of a plateau, whereas China’s growing ranks of newly-minted individuals is likely to keep demand for golf growing steadily over the medium- to long-term.
This means that manufacturers like Yonex (and others such as Nike) anticipate relatively weak growth there as they wait for a nascent middle class to take to the golf course — or at least pay for golf lessons for the next generation of Chinese sports enthusiasts.