Companies from many consumer sectors are running against the wind in China these days, though certain groups are bucking the trend. One of those is health and sports, which have remained on a growth track thanks to greater awareness of their importance in a post-pandemic world. Data from the China Sporting Goods Federation shows online sales for athletic gear jumped 22.6% last year, fueled by growing popularity in trail running, camping and road racing.
Like many consumers around the world, China’s new middle class is demanding more than simple athletic functionality, increasingly seeking products that align with their lifestyles and can bring a sense of community. That pivot from focus on performance to experience-driven engagement is redrawing competitive lines across the nation’s vibrant sports industry, including the huge market for sporting goods.
Topsports International Holdings Ltd. (6110.HK) in many ways epitomizes this seismic shift. The retail titan, once king of the Chinese sportswear hill as the top local distributor for Nike and Adidas, is taking a different path lately as it morphs into a “lifestyle brand operator.” But such transformation naturally carries costs, which shows up in stumbling revenue and profits in Topsports’ latest financial report released last week.