Zhang Heng sometimes feels regret.

As his outdoor gear and apparel business balloons, the avid outdoorsman has fewer opportunities to explore nature.

Shuttling between Beijing and Shanghai almost weekly to manage his first store in the eastern city Preparing for the next peak-selling season, which will come just before the National Day holiday in October Marketing his own brand of outdoor apparel

For Zhang, 35, it's just go, go, go! In fact, his life resembles an expedition as he digs deep into the "gold mine" of China's fledgling, yet promising, outdoor activities industry.

"In a new market, if you want to get the upper hand, you must strike first," says Zhang, president of Sanfo Outdoor Sport Co Ltd, one of China's fastest-growing vendors of outdoor sports gear.

China's outdoor activities market may be small compared with those of developed countries, such as the United States. Last year, the annual sales of L.L.Bean, a US-based retailer of outdoor gear, reached US$1.4 billion; in China, the sector was worth 800 million yuan (US$96 million).

But the market segment's growth rate is "dazzling," Zhang says. In 2000, the sector was only worth 60 million yuan (US$7 million).

"Well-paid young people, with higher education, make up the sector's backbone," says Yi Jiandong, a senior researcher, specializing in the sports industry, with Beijing Sports University (BSU).

Nearly 90 per cent of China's outdoor enthusiasts have at least a bachelor's degree, and 84 per cent of the nature lovers are aged 20 to 40, indicates a survey by Hangzhou Daily Newspaper Group. The survey of 120 members of outdoor sports clubs in Hangzhou, in East China's Zhejiang Province was conducted last year.

The survey also indicates nearly 50 per cent of the respondents earn more than 3,000 yuan (US$361) per month.

It has been easy for the young generation of Chinese, which has been peppered by Western movies, ads and books, to adopt Western-style recreational activities.

Tired of the rigid corporate environment and mounting work pressure, a growing number of Chinese are being lured by the fun of outdoor activities backpacking, camping and hiking that have been popular in the West for decades.

And, even more important, modern-day Chinese are big spenders.

Chinese are eager to buy everything from cars and apartments to jewellery, cosmetics and electronics.

Today's Chinese are not content with slipping on ratty sneakers and a cheap pair of sweats to climb a mountain. Instead, they are spending thousands of yuan often up to 5,000 yuan (US$602), and sometimes twice that amount for a full set of outdoor sporting essentials. They are buying a wide assortment of clothing, hiking boots, backpacks, tents, blankets, cookware, water bottles and flashlights.

And the nation's rich natural sites from snowy mountains to limpid lakes, and forests to deserts provide the perfect destinations for the adventures.

China's outdoor activities industry began taking shape in the mid-1990s in Beijing, the Chinese capital, and Shenzhen, a boom town in South China's Guangdong Province.

But the rapid growth, currently being experienced, began in 2001, Zhang says. Beijing and Shenzhen remain the nation's two fastest-growing outdoor sporting markets.

"I believe China's outdoor sports market will remain on the fast track for the next 10 years," Zhang says. "Large cities, such as Beijing, Shenzhen, Guangzhou and Shanghai, will lead the growth in the next three to five years. And the next big wave will be driven by provincial capitals and some second-tier cities."

Sanfo was founded at the end of 1997. The company has four wholly owned stores three in Beijing and one, which opened in March, in Shanghai. The firm also has eight franchised outlets, which were opened since April in 2004, in Ningbo, Zhejiang Province; Zhengzhou, Henan Province; Langfang, Hebei Province; Changchun, Jilin Province; Urumqi, Xinjiang Uygur Autonomous Region; Baotou and Hohhot, Inner Mongolia Autonomous Region; and Tai'an, Shandong Province.

Sanfo has become one of the largest of China's nearly 2,000 retailers of outdoor sports equipment.

Only a few of the firms including Sanfo, Sun Wind Quality Outdoor Gear and Skyoutdoors have opened chain stores. Most of the vendors have shops with just between 20 and 30 square metres of floor space.

No fun, at first

Like many young graduates, Zhang didn't begin a career he really likes and is really good at. He graduated from Peking University in 1996, with a bachelor's degree in environmental sciences.

The outdoor enthusiast, who spent most of his summer vacations from university backpacking, opened a software company with two friends. The short-lived company went bust after one year, and Zhang owed more than 200,000 yuan (US$24,096).

Despondent, Zhang tried to run from his problems by trekking, for three months, from Northwest China's Gansu Province to Qinghai Province. He also hiked through Southwest China's Tibet Autonomous Region.

That trip changed Zhang's life. It ultimately led to the creation of Sanfo.

During his journey, Zhang met many backpackers from Europe and North America. He learnt during discussions with the overseas outdoor enthusiasts that outdoors-related activities were big business in the West.

Thought Zhang: "That could happen in China, given its fast-growing economy. The `back-to-nature' movement will come to China sooner or later."

With 20,000 yuan (US$2,409) he borrowed from relatives and friends, and his last 10,000 yuan (US$1,204), Zhang opened his first Sanfo store. It was located in a small hutong near Peking University's east gate. The neighbourhood is famous for several tiny bookshops.

"University students are usually avant-garde consumers," says Zhang, explaining why he picked that location.

He named the store Sanfo, which is pronounced almost the same as the Chinese meaning "three men," to commemorate the three young men who worked together at the unsuccessful software company.

But an unknown store, hidden in a hutong, would obviously have a hard time luring customers.

Zhang often rode his shabby flatbed cart, loaded with tents and sleeping bags, to universities on weekends to hawk his goods.

Marketing, without ads

The turnaround began after Sanfo started organizing an outdoor sports club in October 1998. The idea came to Zhang by accident.

Some of Sanfo's regular customers proposed a real "outdoor adventure" so they could try the tents and sleeping bags.

Zhang thought it was a good idea, and he handed out notices inviting outdoors enthusiasts to participate in a two-day trip to Simatai, a quiet and remote section of the Great Wall. Twenty-six people signed up for the trip.

Sanfo has since organized several similar trips. Like many other budding entrepreneurs, Zhang had to shoulder many responsibilities from managing the store and exploring the travel route, to leading the expedition.

"Such activities are great `advertising,' and they gradually built a regular customer base for us," Zhang recalls.

Sanfo's competitors at that time were either just stores selling products or clubs making money from organizing tours.

"Many short-sighted private enterprises, eager to earn instant profits, are not aware of the importance of fostering a culture for their products," Yi says.

"If you want an `imported' product to take root in China, you have to foster the culture, which may not have a direct effect on your profits, but is closely related to the product you sell. Only by doing this can you have a long-term business."

Sanfo now has more than 20,000 club members. They pay an admission fee of 15 yuan (US$1.80), which entitles them to a 15-per-cent discount when making a purchase at Sanfo. The club organizes camping, hiking and mountaineering events almost every weekend.

Sanfo's annual sales have more than doubled every year since 2001.

Looking ahead

Sanfo launched its website in 1999. It used to be just a BBS (bulletin board system) for club members to leave messages and post travel notes. Now, Sanfo lists all of its products and services online.

"Even though e-commerce, at present, contributes just a tiny portion of our annual sales, it will be the most promising growth point for Sanfo," Zhang says.

"Just think of the huge number of Internet users in China! The cost of online trading is much lower than selling in an actual store if product sources, smooth distribution and electronic payments are guaranteed."

Driven by the robust growth of China's Internet population, especially broadband Internet users, online trading in China has increased an average 40 per cent annually over the past three years, indicate China E-Commerce Association's figures.

Sanfo now sells more than 1,000 kinds of outdoor gear, equipment and apparel that bear brand names that include ARCTeryx, Coleman, LEKI and Columbia.

Zhang, at the end of 2003, developed a series of sportswear under his own brand Anemaqen.

"Foreign gear and apparel are usually expensive. Mid-range products, which are cheaper, but have fair quality, are welcomed by many consumers," Zhang says. Anemaqen products generally cost about half of what foreign brands cost.

Zhang has set two goals: To develop Sanfo into China's undisputed leader in outdoor gear and apparel, and grow Anemaqen into a recognizable domestic brand of sportswear.

(China Daily 05/30/2005 page3)