Sports Industry Became China's Hottest Industry
The good news is Sports Industry has become the most popular and one of the fastest growing industry in China in the past year since a major government reform announced in late 2014. Many work in the sports industry in China have longed for this reform for over a decade.
The Historic Reform:
In October 2014, China's cabinet, the State Council, issued the "Suggestions on Accelerating Development of Sports Industry and Promoting Sports Consumption", aiming to boost the development of the country's sports sector and grow it into a 5 trillion yuan ($800 billion) industry by 2025.
According to Feng Jianzhong, Deputy Director of the State General Administration of Sport of China (SGAS), the SGAS has simplified administrative examination and approval procedures, rescinded examination and approval of commercial and mess sports events and reformed on large-sized sports venues operation and management system, including granting subsidy worth of 870 million yuan to 1,212 sports venues for free-of-charge or low-charge use by the public.
Such moves have triggered high enthusiasm among the public to participate in sports and provided great business opportunities for the sports industry as well.
Over the past year, tons of investors rushed to find golden opportunity to invest in what they believe is one of the last few untapped market in China, the sports industry.
However, the majority of sports consumption in China before was for tangible products such as sportswear and equipment, while very little was for sports-participation-related causes including buying sporting events tickets and hiring trainers. This was because in retrospect, sports were run by the government in the era of planned economy, and the government did not open much of this market to marketization or globalization in the past few decades before this reform except for the sportswear and equipment sectors. The strengths of the old system are evident in yielding gold medals, which reached the peak in 2008 when host China topped the tally with 51 gold medals at the Beijing Summer Olympics. But the system makes it harder for the market to grow.
Such a manufacturing-centered consumption pattern reflects that China's sports industry remains in its infancy, with a wider range of business models yet to be developed, experts said.
But the Chinese government is determined to realize a shift in the sporting focus from winning gold medals to public well-being and sports business.
Inspiring more consumption in fitness services and sports-events-related businesses－including ticket sales, club merchandizing and media rights trade－to diversify the business structure has emerged as a priority to achieve the goal, said Lin Xianpeng, a sports industry professor at Beijing Sport University.
"More than 70 percent of the value in the sports industry in the United States was generated by pro-competition businesses. Compared with the US, we have a huge gold mine, with an immense number of potential business opportunities that have yet to be exploited," he said.
Chinese billionaires & investors rush into sports industry:
Since the ambitious plan issued by the State Council in 2014, Chinese billionaires responded with quick actions and their hands were put firstly to soccer, as it is the sport the government is pushing hardest to grow. Below examples got most attention from national and regional media in the past year.
In 2015, Wanda Group, a real estate giant in China, bought stake in Spanish La Liga champions Atletico Madrid, merged Infront and then bought World Triathlon Corporation August, spending about 11.6 billion yuan in this area. By doing so, Wanda Group is poised to become the world’s largest sports company.
E-commerce titan Alibaba (who we all know now) also showed great interest as they first paid 1.2 billion yuan for 50 percent stake in Guangzhou Evergrande, China's most successful soccer club and two-time Asian Champions League winner.
The Nasdaq-listed company, which have business cooperations with German champions Bayern Munich, Spanish giants Real Madrid and NBA star Kobe Bryant, then launched its own sports company AliSports in September to focus on professional sports.
Two other internet companies LeTV (who is also the Pac-12's partner now) and Tencent jumped on the bandwagon by establishing respective sports companies as well, while Ti'ao Power has been designated as the cooperation partner of China Super League TV signal making and copyright sales at the prize of eight billion yuan for five years from 2016 to 2020.
Bright Future
As China's sports industry further expands, it will become more and more attractive to domestic and foreign investors.
Statistics show that China's sports industry accounted for 0.5 percent of the GDP in 2008. It took six years for China to raise the figure to 0.6 and only one year (2015) to 0.7.
As the portal to the "gold mine" is unlocked, China's sports industry is on a high-speed train and it strikes a win-win for both China and abroad.
References and more related articles:
Yearender: A new era for China's sports industry
http://english.cntv.cn/2015/12/23/ARTI1450860376768978.shtml
China estimates 400 billion yuan added value in sports industry in 2015
http://usa.chinadaily.com.cn/business/2015-12/09/content_22668603.htm
Sports sector expected to hit 7 trillion RMB by 2025 in China
http://english.cntv.cn/2015/12/18/VIDE1450426320722325.shtml
State-dominated sports industry ready for shakeup
http://europe.chinadaily.com.cn/epaper/2015-11/13/content_22445000.htm
China's Growing Sports Empire
http://thediplomat.com/2016/01/chinas-growing-sports-empire/