Giants cash in on Chinese craze for sports
China Daily  Updated: 2005-05-24 05:38

As living conditions improve, people are paying more attention to their health, says an article in the magazine Beijing Review.

This includes taking more exercise, and as a result, fitness centres have mushroomed and sports products taken off in a big way.

Aware of this huge market, an increasing number of business people are starting to invest in the sports industry, the article claims.

The sports sector in this country has developed swiftly over the past few years, with the value of its production growing by 50 billion yuan (US$6.04 billion) a year and sales rocketing.

Since 1994, when football became a professional marketable sport, football matches have attracted an average audience of 6 million a year, making a clear profit of about 700 million yuan (US$84.54 million). The Chinese Basketball Association (CBA) now fills 80 per cent of the seats at games. Volleyball, table tennis, badminton and baseball have also stimulated the development of sports-related businesses, such as TV coverage and advertising.

By 2010 the sports industry will account for 1.5 per cent of the country's GDP, current thinking goes.

A survey by Horizon Research in Beijing found that Beijing residents spend on average 888 yuan (US$107) a year on physical exercise, putting them ahead of the other cities in the survey, including Shanghai, Wuhan, Guangzhou and Chengdu.

A survey in 1995 showed that the average per household spending on recreation, fitness and cultural activities was 312 yuan (US$38) per year. In 2001, families were spending 690 yuan (US$83) on average for recreation.

In recent years, the proportion of Chinese people's spending on sports activities out of their total expenditure has been rising.

All venues catering for physical activities, from billiard halls to skating rinks, skiing slopes to badminton courts are now enjoying a thriving business.

Sports goods are an obvious spin-off of this lucrative market. They can now be found everywhere, in large franchise stores in big cities down to narrow alleys and lanes in small towns.

Attracted by China's huge market, many overseas business people are cashing in on the market. One example is the China Open Snooker Championships held in Beijing recently. The live telecast of the match held on April 3, which Chinese player Ding Junhui won, was watched by an estimated audience of 100 million, showing the huge potential market for the game here.

China has been selected as the contest venue for many sporting activities - the 2004 NBA China, F1 Shanghai, China Tennis Open and European Football Club exhibitions.

China will host five European golf tournaments this year, more than in either England or Scotland.

World-famous brands such as BMW, Volvo, Johnnie Walker and Omega, have agreed to help sponsor these events.

The development of golf in China has long been a controversial topic, as golf courses occupy large pieces of land and tend to damage the environment because of using too much pesticide.

But China's golf courses are of a high quality. In fact, China has already attracted many overseas business people to invest in golf. According to Wang Yaguang, the IMG chief representative in Beijing, many overseas enterprises, particularly some transnational companies, have expressed a wish to take part in China's golf tours. He said this showed confidence in China's market. As well as the Asian and European golf tours already taking part in China, an American tour is also making moves in this direction.

According to the US magazine BusinessWeek, ATP (the Association of Men's Tennis Professionals) plans to set up an office in Beijing or Shanghai and open tennis-training centres. This means it will become the second professional association to open offices in China after the NBA that entered Hong Kong in 1992.

Those who favour China's sports market also include the US National Football League (NFL) and Major League Baseball (MLB), which is North America's professional baseball league.

Analysts think China's sports market can generate 15 billion yuan (US$1.81 billion). A survey by the Sports Business Research Network showed that this figure would rise to 240 billion yuan (US$28.9 billion) in 2010, according to the article.

In 2004, China hosted the China NBA, F1 Shanghai and China Tennis Open and is expected to host the Motor GP, Tennis Master Cup, world track and field contest and some other international sports events this year.

"As China hosts more world sporting events, even more are bound to be hosted here in the future," said Sun Lei, director of the Shanghai New Physical and Cultural Co.

The 2008 Olympic Games in Beijing is not only an important event for the Chinese people, but also for business people worldwide.

This was made evident by the debut of the first batch of products with the Beijing Olympic symbol that caused such a sensation in the market. The mascots of the Sydney and Athens Olympic games made more than US$100 million and US$200 million respectively. Experts estimate that the 2008 Beijing Olympic mascot items could make US$300 million.

Sports equipment has long been involved in fierce competition between domestic and overseas manufacturers. For the Olympic Games, Chinese enterprises have been striving to upgrade their products, hoping to put them into venues which, as they know, will play a key role in enhancing the image and sales of their products.

(China Daily 05/24/2005 page4)

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