The outdoor apparel and sportswear industry in China has experienced tremendous growth thanks to the e-commerce segment. In some areas of China, the CAGR for online sales is expected to be above 30% through 2020, with extra gains to be perceived in 2022 with the Winter Olympics that will take place in China. China’s sportswear sales more than doubled from $22.9 billion amounting to 148.3 billion yuan (2014) to $48.9 billion amounting to 316.6 yuan in 2019, and it shows no signs of slowing down. In the West, The North Face brand is known for representing an active, healthy sporty lifestyle filled with challenges and adventures, but in China appreciating “the great outdoors” is more about connecting with nature in a spiritual way than practicing outdoor activity.
However, The North Face designers managed to attract and encourage their consumers to free themselves from the stress of living in a hectic atmosphere by enjoying the freedom that comes with spending time in nature. Nowadays, among Chinese citizens, there’s an intense desire to return and reconnect to the outdoors. The North Face has very much understood their desire to do so and aims to help consumers do exactly that.
China Sportwear Industry
Rise of wellness & outdoor activities in China
China is becoming an aging society, with an older population of over 200 million seniors which is increasing by 8 million more each year, by 2050 it is estimated that old people will represent at least one-third of the global Chinese population. With the increase of this segment of the population comes along a growing interest for a more healthy lifestyle geared towards wellness and the practice of outdoor activities.
The following numbers are proof of the ongoing change of mindset :
- Among the 802 million Chinese mobile users, over 104 million have at least one fitness app on their phones.
- Sportswear sales have been increasing in the past years.
- More than 15 million consumers have subscribed to gym memberships.
- The country counts 10 million yoga practitioners.
- Sales of health supplements and vitamins experienced an annual (online) growth of 27% in 2017.
- In a culture and country where eating meat is considered a sign of prosperity, China is home to more than 50 million vegetarians.
These figures illustrate China’s ongoing shift towards a more healthy way of living and search of wellness as such the opportunities for growth and increase in demand for activewear and athleisure clothing has been boosted by these factors but Chinese consumer’s rapidly increasing disposable income has had an important role too.
Chinese clothing consumers are looking for comfort
Athleisure is an equal mix of fashion and athletic apparel, fit for wearing anytime, anywhere, and for every occasion, as the name suggests it can also be used for a variety of workouts. Athleisure is very popular among Chinese consumers because, in their eyes, athleisure presents an active and healthy lifestyle, to them, it is considered to be the ‘new sexy’ for many Chinese consumers.
After a long period of being stuck indoors due to COVID-19 and national lockdown, China saw the return of fitness communities, which gave the sportswear market a boosting growth. The generalization of sports among Chinese citizens has created a consequent demand, as the last few years have turned fitness from a personal hobby to national interest.
Sport wears consumers in China want innovation
According to many, Luxury brand’s futures lies in collaborations with renowned sports brands, as it’s been seen with a lot of past collabs, the results of these collabs are often items with increased features, more resistant, long-lasting, and more efficient, all of this is done in order to meet consumer’s needs and demands. Nowadays Chinese consumers are very demanding regarding innovations in their products. According to the brand’s CEO, It is clear that The North Face’s growth and success will be driven by an equilibrium in both areas innovation and design.
The success of the north face in China
The North Face is an American outwear retail brand known for its sports-oriented apparel, founded in 1966 by two extreme hiking enthusiasts.
The brand’s sales in China have expanded by around 20% (2019), this significant increase is partly due to Steve Rendle, who decided to put focus on the Chinese market as a top priority when he took on his position as Chief Executive at The North Face. Concerning this financial year, The North Face’s owner VF, which also owns Vans, Timberland, and Dickies projects the brand’s sales in China to rise between 12% to 14%.
Contrary to many other American clothing companies facing difficulties to cope with penalties on Chinese clothing imports into the U.S. In 2021 the U.S. company behind the clothing label The North Face has decided to relocate the nerve center of its Asia-Pacific operations away from Hong Kong in favor of Shanghai and Singapore. VF Corp. will move the head offices overseeing the regional brand operation to Shanghai. Singapore will serve as the Asian supply chain hub. The North Face Asia/Pacific’s branch will oversee the brand’s expansion in China, in order to do so, the brand will manage its sales from offices based in Shanghai, Beijing, and Guangzhou.
Athleisure sales and market figures in China :
In the early 2000s, China was home to only 500 gyms however in the past 20 years the Chinese fitness market experienced an incredible boost and saw a drastic increase with the gym number going from 500 to 40 000 as of 2020. According to Global Wellness Summit (2019), 104 million Chinese citizens had at least one fitness app on their mobile phones. In China a gym membership on average costs between ¥4,000 each year, but as Chinese citizen’s incomes are constantly rising, they are as a result more inclined and willing to spend money on developing healthy lifestyles whether that be inside or outside of the gym, of course, that also applies to buying brand new sportswear items.
The Chinese sportswear market is only second to the U.S and is mainly dominated by big international sports and athleisure brands such as Nike and Adidas. Even if the Chinese athleisure market remains largely held by international brands, a few national brands, such as Anta and Li Ning, still managed to increase their market share quite quickly because of an upgrade in domestic brands’ quality which is very much appreciated by Chinese consumers.
The Chinese sportswear market experienced a quick growth spurt between 2013 and 2018 even amounting up to $40 billion, however, the increase is expected to slow down in the coming years, but studies predict it will still keep an annual increase of about 10%, which in comparison is still higher than many other countries.
How did the North face win over Chinese consumers?
As stated further below, The North Face (TNF) has been able to stabilize its presence in China by practicing an online and offline strategy, this implies that the North Face is able to sell its items through online and offline channels. The main TNF stores in Mainland China have located: in Chengdu, Lanzhou, Yinchuan, Jinhua, Shandong, and Luoyang. (Physical and shopping centers). As for its online strategy, the brand has an official website catering to 39 countries worldwide.
- Online: meaning physical stores, shopping centers…
- Offline: meaning websites, e-commerce platforms, and so on.
The North Face on Baidu
In China, 75% of online research is done on Baidu. To be visible in the eyes of Chinese consumers and to have them buy your products or services you must rank well on this search engine. You can use PPC campaigns for quick results but if you don’t want to spend too much on bidding for your keyword to work then SEO may work better as it is more cost-efficient and long-lasting than PPC.
The north face uses a mixed SEO and PPC to ensure it will not be outranked by competitors on its main keywords.
The north face conquest of Chinese Social Media
In 2013 The North Face released a campaign aimed at the Chinese market featuring athlete Jimmy Chin, the campaign’s purpose was to make people realize and reveal that there is an explorer in all of us and push them into exploring the outdoors.
The contestants were entering the competition in order to win a trip to the United States. The campaign bought Chinese consumers’ interest and at the time became one of the most buzzed-about subjects on Chinese SNS (Social Networking System). The campaign drew in more than 216,000 new members to the brand’s online community.
The North Face has invested in many Chinese social media. They regularly post on their Wechat account for instance where they also have a WeChat store (through a mini-program). They share their event, their collaboration, and so on. You’ll also find them on Weibo and little red book where they also have a flagship store and many shopping notes from customers.
Releasing collections for important Chinese events: the art of Localization
The North Face is quite famous for releasing items for particular national events, such as the New Year in China. Indeed the brand announced that it would be releasing a special collection in order to celebrate the 2021 Chinese new year, for the occasion the brand decided to launch a few items designed in accordance with the Chinese traditional celebration colors are red and gold/yellow. The brand gave a fresh new look to its iconic staple pieces that are 1994 Mountain Light Jacket, this time available in brand new colors and themes/prints like a bold deep red that has been designed with an overlay of traditional Chinese floral prints in a darker hue of red allowing it to perfectly harmonize with the jacket’s deep red), classic black (The classic black also designed with an overlay of traditional Chinese floral prints in dark gray), and a crisp snow-white.
Brand collabs are a great tool in China
The North Face is recognized for its successful collaborations with other brands, in fact, their 2020 collab with Italian luxury brand Gucci (The North Face & Gucci) proved to be very successful among Chinese consumers. First launched through a pop-up store in Beijing in December, the Gucci x The North Face collection grabbed 76 million consumers’ reactions with its dedicated hashtag on Weibo, while the brand’s videos on Douyin have been played over 10 million times.
Another interesting collaboration of the brand was with China Airlines indeed in order to celebrate its 60th anniversary (2019), China Airlines launched amenity kits for Premium Economy and Business Class passengers, these new kits are a result of a collaboration with The North Face.
Sportswear brand collaborate with Luxury brand/ The North face x Gucci
Keep in mind that consumers are really adamant about the fact that their items should be fashionable before the quality of functionality: for fashion brands that want to try sportswear collabs, balancing fashion and functionality will be the center of discussion. The Chinese consumers wanted sportswear collabs to keep in mind both aspects, however, there is a notable reluctance to buy luxury sportswear because of potential performance issues.
Outside of product design and production, marketing execution is also crucial for sportswear collabs, the Gucci x The North Face collab is one of the best indeed It’s tastefully designed items and the thought put into merging the two logos together, and the 70’s retro overall vibe gives it an even more attractive appearance. The collab also managed to successfully create a buzz around its pink packaging and the clothe’s overall earthy tones.
On Chinese social media, the pink packaging and giant pink shopping bags have become just as popular as the products themselves! In fact, in addition to unboxing videos and hauls, many Chinese KOLs have created content about the packaging.
The North face on Chinese E-commerce platforms
One of the reasons for the success of The North face in China is the brand’s good use of e-commerce platforms, indeed the brand is available to customers on a wide variety of platforms which makes sit very accessible and easy for consumers to the items.
The North Face on Tmall :
The success of Alibaba’s eCommerce company, TMALL has been nothing short of impressive. In just a few years they’ve managed to corner 80% market share by capitalizing on their bottomless resources as well as cutting-edge technology. Tmall is the go-to platform for global brands that want to break into China. They are very selective with who they allow on their site, so not every company will be accepted and you’ll have to work hard just to get in, although the entry process has been getting easier over the last few years, notably in 2021 with the application of the anti-monopoly law judging Tmall pricing was unfair.
The North Face on JD.com :
The north face is also rocking a flagship store on JD.Com.
JD.com, or JingDong Mall as it is known in its native China, is one of China’s eCommerce leaders. JD.com is one of the fastest e-commerce websites in terms of delivery, using its nationwide logistics network and sophisticated data-driven technologies to offer same-day delivery. With an official website that functions in several different languages including English (“JD Worldwide Express”), this online marketplace used to be known for selling mainly electronics but has recently developed segments such as groceries, maternity clothes, and fashion items.
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