Date
22 January 2017
Sportswear makers will benefit from the expansion of the sports industry. Photo: HKEJ
Sportswear makers will benefit from the expansion of the sports industry. Photo: HKEJ

Rise of sports industry in China on the horizon

The sports industry is gradually coming under the spotlight for investors focusing on sub-sectors of the retail and consumer industry, because it shows long-term growth potential.

The United States has shown how large the sports industry can be.

The size of the US sports market is US$500 billion, accounting for 3 percent of the country’s gross domestic product.

If the US model can be adopted in China, the outlook will be very bright.

Monopolies used to keep other firms outside the core areas of the industry in China.

In October last year, Beijing released a plan to grow the domestic sports industry to 50 trillion yuan (US$7.87 trillion) before 2025.

Reform measures include removing administrative intervention and the adoption of market-oriented rules.

For instance, the Chinese Football Association is to be independent from the General Administration of Sport and is required to separate its commercial business operations from its daily administrative role.

This means companies, instead of the authorities, may be allowed to organize sport events.

China Central Television’s monopoly over the broadcasting rights for sporting events will be abolished.

The public will have more channels on which to watch sports.

The sports industry is most likely to benefit from China’s huge population base.

As family income increases, the sports industry will enjoy an expansion after the reforms are implemented.

In addition, the development of mobile internet in China will allow sports-related firms to get closer to their customers.

Social networking functions will help maintain customer loyalty.

The organization of popular sporting events will be a pillar of the industry, as it can generate broad business opportunities besides just the ticket income.

All in all, the lifting of restrictions in China’s sports industry will bring it great potential for expansion, given that it lags far behind that in developed countries.

This article appeared in the Hong Kong Economic Journal on Nov. 9.

Translation by Myssie You

[Chinese version中文版]

– Contact us at [email protected]

MY/DY/FL

======================

The sport industry is gradually becoming a spotlight for investors among sub sectors of the retail and consumer industry because it shows long term growth potential.

The United States market has proved how large the sport industry can be. In 2015, the market size of US sport industry is US$500 billion, accounting for 3 percent of the GDP. If the US model can be adopted in China, the outlook will be very bright.

 

Monopoly used to keep companies outside the core area in the industry in China. In October 2014, China released a plan to make domestic sport industry a 50 trillion yuan one before 2025. The reform measures include remove administrative intervention and the adoption of market-oriented rules.

 

For instance, Chinese Football Association was to be independent from the General Administration of Sport and it is required to divide commercial business operations with daily administrative role. It means companies may be allowed to organized sport events instead of the authorities. Moreover, the China Central Television’s monopoly over sport event broadcasting rights will be break down. The public will have more channels for sport events.

 

Sport industry is most likely to benefit from China’s huge population base. With the family income increases, the sport industry will enjoy an expansion period after the reforms are implemented.

 

In addition, the development of mobile internet in China will help increase sport related firms to get closer with their customers. The censors in smartphones can provide wide extension services while social networking functions will help maintain customer loyalty.

 

Organization popular sports games will be a pillar of the industry as it can generate broad business opportunities other than just the ticket income.

 

All in all, the lift of restriction in sport industry will bring it large potential, given presently the domestic industry is lagged far behind that in the developed countries.

 

This article appeared in the Hong Kong Economic Journal on Nov. 9.
Translation by Myssie You

 

[Chinese version中文版]

 

– Contact us at [email protected]

 

MY/DY/

 

Analyst at Noble Apex Advisors Ltd

EJI Weekly Newsletter