Since the start of the pandemic, international flights have been greatly reduced due to epidemic prevention policies. Throughout this time, Chinese consumers’ consumption needs and preferences have also changed. These two factors have combined to impact the operations of global brands in China. Specifically, overseas brands are facing the following three pain points.
- Supply chain disruption and decreased ability to fulfill commitments: Since the start of the pandemic, cities with a focus on imported consumption, such as the first-tier cities like Beijing, Shanghai, Guangzhou and Shenzhen, have been unable to receive and stock products in a timely manner, leading to shortages of popular products and delays or cancellations of orders. This has significantly impacted product promotion activities as companies struggle to fulfill orders and make deliveries in a timely manner.
- Limited operation of offline channels: Due to the impact of the pandemic, traditional distribution channels for imported goods have been unable to sustain offline store operations, and consumer willingness to purchase offline has decreased. As a result, the traffic in most stores has sharply declined, and the sales data and demand for imported brands has been greatly affected. In addition, a large amount of inventory intended for offline retail has not been converted into sales. This inventory not only brings cash pressure and increases warehouse costs for brands and stores, but also affects the subsequent replenishment and ordering processes.
- Increased operating costs in a heated competition environment: After the onset of the pandemic, the entire market entered a period of low consumption, with weak consumer desire to purchase and an overall decline in demand, resulting in a significant impact on sales. In addition, for some industries with intense competition, the price of relevant media positions and hot category keywords on digital media platforms has skyrocketed, increasing the operating costs and difficulty in incubating hit products for global brands.
Innovation in the pattern of overseas small and medium brands entering China
Cross-border e-commerce provides efficient and direct operations for global merchants, starting from the very first step of entering the Chinese market. This approach gives global brands access to services such as cross-border supply chain, marketing and transaction touchpoints, local logistics, and after-sales support. This allows brands to quickly improve their reputation and performance in China while effectively interacting with their target users, maintaining user loyalty, and stimulating repeat purchases.
Based on the several entry-level patterns provided by the cross-border e-commerce platform, merchants can efficiently carry out refined operations covering the entire region based on their own strategic planning and business needs.
For the initial stage of entering China, brand recognition and user acquisition are the key focus of the business. In terms of marketing, with the help of digital operations, merchants can accelerate brand awareness through e-commerce platforms, short video platforms, and text and graphics content platforms. By utilizing a variety of platforms, brands can improve their ability to accurately acquire users in both public and private areas. Specifically, in the early stage of the brand’s development in China, different forms of outreach should be considered.
For example, on platforms mainly focused on transactions, attracting traffic can be achieved by issuing coupons. On platforms mainly featuring text and images, attracting brand businesses and even private domains on other platforms can be achieved through the planting of KOL text and video content, product unboxing and try-on experiences, etc. On short video platforms traffic can be increased by leveraging the traffic of top KOLs through live streaming, quickly expanding the private domain traffic pool, and once the brand’s private domain has a certain scale, it can consider attracting traffic from smaller, more specialized KOLs to target more specific groups. For example, the UK fertility brand Zita West uniformly adjusts its visual aspect, such as product main images, details, and videos, to highlight its brand strength and quickly plant the brand’s “UK local import” and “exclusive for royal families” memory tags on various marketing touchpoints.
For overseas brands with a certain level of brand recognition, the strategic focus should be on optimizing their global user base. In terms of user optimization, import merchants can accelerate digital operations across the globe, integrate data from multiple platforms in public and private domains, build user tags and features based on global user data, deeply understand user behavior and consumption preferences to increase product sales. At the same time, brands can optimize after-sales service through cross-border e-commerce platforms to increase the repurchase rate of their customers.
Specifically in private domain operations, global brands can provide personalized recommendations and activities based on consumer information such as age, gender, purchase category and frequency, interests, etc. This personalization helps to improve consumer satisfaction and retention. In addition, through the analysis and integration of customer data, the brand can optimize their marketing and sales strategy, such as improving the product line and pushing targeted products and activities, to further increase the conversion rate of private domain traffic.
For global brands that are already established in the Chinese market, digitisation can improve product strength and optimize supply chains. Merchants can use data from cross-border e-commerce platforms and their own private traffic pools to track changes in consumer demand for brands and products. By diagnosing the usability of products, improving the sensory and interactive experience of products, and improving the satisfaction and loyalty of independent users and global users, businesses can assess the overall satisfaction of user needs and product value and demand, identify business operating difficulties, and increase innovation and competitiveness.
For example, by building their own data platform, fully integrating consumer data from different platforms, and maximizing the quality of private data, businesses can improve the depth and richness of consumer profiles, such as improving the depth of their own private data points and enhancing the depth and richness of consumer profiles. By providing timely feedback on market demand to the upstream of the supply chain and product research and development, businesses can improve their competitiveness.
Pattern innovation provides advanced channels for overseas businesses to enter China
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From Niche to Mainstream: The Evolution of Outdoor Sports
What was once considered a niche pursuit reserved for dedicated enthusiasts has seamlessly transitioned into the mainstream. The outdoor sports landscape, once characterised by a select few, now sees participation across a diverse demographic spectrum. This evolution is testament to the inclusive nature of outdoor activities, as they cater to individuals of varying ages, fitness levels, and interests. Whether it’s a leisurely hike through scenic trails, an invigorating morning run, or an adrenaline-pumping adventure, the appeal of outdoor sports transcends boundaries and resonates universally.
Reconnecting with Nature: A Restorative Journey
Amidst the ceaseless hum of digital devices and the constant stream of information, the allure of the natural world beckons individuals to embark on a journey of restoration. Outdoor sports offer a respite from the artificial constructs of modernity, inviting individuals to embrace authenticity, simplicity, and the invigorating elements of the outdoors. The act of reconnecting with nature is not merely a leisure pursuit; it’s a therapeutic voyage that soothes the soul, rekindles a sense of wonder, and fosters a harmonious coexistence with the environment.
Explosive Growth in Outdoor Participation
Recent statistics reveal a remarkable upswing in outdoor sports participation in China, with over 400 million individuals engaging in various outdoor activities by the end of 2021. The past two years alone witnessed a remarkable surge in the outdoor participation rate, crossing the 28% mark. While this growth is commendable, it’s important to note that Western countries have already exceeded a 50% outdoor participation rate, highlighting the untapped potential within the Chinese market.
With continuous enhancements in outdoor sports facilities and an increasing passion for physical well-being, it’s predicted that the number of participants will further escalate. As a result, the outdoor sports industry’s collective value is projected to surpass an impressive ¥3 trillion in the foreseeable future.
Outdoor Equipment Market: A Strategic Focus
In light of this burgeoning interest in outdoor activities, the outdoor equipment market takes centre stage. The growth in outdoor sports directly fuels the demand for quality gear and accessories. This dynamic interplay between participation and equipment expenditure makes the outdoor equipment market a pivotal focus for industry players and investors alike.
Shifting Fitness Trends: Insights into Active Lifestyles
A comprehensive research report sheds light on the fitness habits of individuals aged 7 and above in China. The study indicates that approximately 67.5% of the population participates in physical exercise at least once a week—a substantial 18.5% increase from the data recorded in 2014. Moreover, the active individuals engage in fitness activities for an average of 2.52 days per week, dedicating a cumulative 99 to 120 minutes each week to exercise.
A diverse range of sports and fitness programs are gaining traction across the nation. Activities such as running, cycling, dancing, and gymnastics are becoming integral parts of people’s lives, as the pursuit of a healthier lifestyle takes centre stage.
Rise of Niche Sports: A Thriving Trend
In the summer of 2022, a wave of unconventional sports gained significant attention as part of the “trendy sports” movement. Ultimate frisbee, land surfing, flag football, ultra-running, pickleball, and kayaking captured the imagination of enthusiasts seeking unique and engaging outdoor experiences. Building on this momentum, 2023 introduces a fresh wave of trendy sports, including stream tracing, cycling, equestrianism, paddleboarding, and surfing. This selection experienced an astounding 350% growth in sporting equipment sales compared to the same period in the previous year.
The emergence of niche sporting activities underlines the evolving nature of outdoor sports, transitioning from traditional activities to more novel and exciting experiences.
Changing Consumer Priorities
Consumer preferences are significantly shaping the outdoor sports market. In the present landscape, outdoor apparel remains a dominant category, with individuals placing utmost importance on clothing that caters to their outdoor pursuits. Notably, footwear, especially hiking boots and sports shoes, has witnessed rapid growth. This phenomenon can be attributed to brands focusing on introducing lightweight and functional outdoor footwear.
Furthermore, consumer priorities have shifted towards “outdoor protection.” Participants in outdoor activities prioritise safety and comfort, safeguarding themselves against adverse weather conditions and potential injuries.
A Shift Away from Low-End Products
The tumultuous events of the pandemic, coupled with internal industry competition, have prompted a shift within the outdoor sports market. The market currently accommodates nearly a thousand domestic outdoor sports brands, each vying for attention and market share.
International brands dominate the mid to high-end market segments, while domestic counterparts are primarily situated in the mid to low-end spectrum. However, domestic brands are actively exploring avenues to expand their reach, engaging in acquisitions, collaborations, and innovative approaches to stand out in a competitive landscape.
The market dynamics have prompted many fashion and sports brands to expand their product lines into the outdoor sports equipment realm. This heightened competition is simultaneously driving the exit of low-end products from the market, aligning with consumer expectations for higher quality and performance.
A Call for Well-Being in Modern Life
The tumultuous pace of modern living has inspired a collective desire for holistic well-being. Amid the demands of work and family, individuals are seeking physical, mental, and emotional respite. Outdoor sports offer a unique avenue for relaxation, self-improvement, and meaningful social interactions.
As people recognize the benefits of outdoor activities—ranging from reconnecting with nature to fostering social connections—there’s an organic shift towards prioritising outdoor sports for their holistic advantages.
In Conclusion: A Thriving Future for Outdoor Sports
The 2023 Chinese outdoor sports market is characterised by transformative trends that reflect a society’s evolving preferences. As outdoor activities gain prominence and become integral to daily life, brands and industry stakeholders must adapt to changing demands. The market’s expansion, coupled with the rise of niche sports and changing consumer priorities, points to a promising future for outdoor sports in China. This thriving landscape underscores the deepening relationship between individuals and the outdoors—a connection that promises not just leisure, but a healthier and more fulfilling way of life.
