Thematic Report

China beats the world

by Oliver Matthew / Apr 3, 2019

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The Chinese are the key demand driver in so many areas of global consumer markets. So what about the sports industry? What are the trends in China and how will these impact future investments? More than half of the Chinese urban population are sports fans. In terms of demographics, 62% of total viewership is driven by young, single males aged 18-40, while overall viewership is 63% male dominated. Single males between the ages of 31-45 represent 20.6% of total viewers. A common misconception is that most sports fans are concentrated in China’s largest cities. In fact, Tier-1 cities represent 27% of the overall fan base, whereas Tier-2 and Tier-3 cities comprise 45% and 28%.

China’s sports market is raising its game
The entire ecosystem, including events, sponsorship, media and merchandising rights, is currently valued at Rmb820bn and Beijing plans to increase this to a Rmb5tn industry (US$813bn) by 2025. With an estimated 700 million sports fans eager to watch the world’s best athletes, this market is poised for growth. Foreign leagues see the vast potential and are pushing efforts to engage Chinese supporters. And thanks to improving tech and better streaming services, fans are just one click away from watching the latest live games. When it comes to sports consumption, China’s goal is to beat the world.

Beijing’s sport mandate
Beijing’s latest five-year plan includes improved fitness, grassroots sports-awareness initiatives, education, domestic and international league expansion, and foreign investment. For those willing to enter and invest, this mandate creates a tremendous economic opportunity. The world’s premier leagues and brands are seeing success in the largest growth market in the world, which in turn is creating an impact on the global sports economy.

Risk aversion
China is also becoming a major destination for international sporting events and brands. In 2019, the country will be the venue for the FIBA World Cup (basketball), Formula 1 Grand Prix (motor racing), Rolex Shanghai Masters (tennis), plus a host of EPL (football), NBA (basketball), NFL (American football), NHL (ice hockey) and PGA (golf) events. At the same time, Beijing is gearing up for the 2022 Winter Olympics – the first occasion in China. This profusion of interest is fuelling explosive growth for brands like Nike, which saw a 26% YoY revenue hike in China in 2018, more than triple its expansion in any other market.

Growing impact of technology
Fuelling this tremendous growth is the impact of new and emerging technologies. There are dozens of live-streaming platforms such as Tencent Sports, QQ Sports and Sina Weibo, offering multiple opportunities for fans to enjoy sports worldwide on a daily basis. These media channels have created a growing appetite for content as well. In December 2018 alone, after only two months in the market, media app Tik Tok commanded 41% of the Chinese sports fan base through its daily-driven content. The growth potential in China will be huge.

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