ispo China 2008 success underscores rapid growth rate of China outdoor market

Held at the China International Exhibition Center in Beijing Feb. 24-26, ispo China boasted a dramatic increase in attendance and far more energy than the previous year’s show. Attendance, which was not broken out by segment, was reported at 11,108 compared with 9,043 in 2007. Preregistration for the show was more than double that of 2007, with 5,051 compared to 2,160. Exhibiting brands numbered 329 compared to 300 in 2007, covering 20,000 square meters compared to 16,500 square meters in 2007. Retail attendees were reported from Korea, Hong Kong, Japan, Taiwan, China, Australia and India.

This year’s show (www.ispochina.com) was organized by Messe München International (MMI) of Germany in partnership with Nielsen Business Media of the United States. As the U.S. marketing partner, Nielsen’s role is to support North American brands trying to gain access to the Chinese market through ispo China. In his opening speech at the official opening press conference, Manfred Wutzlhofer, president and CEO of Messe München, emphasized the importance of the Asian sporting goods market for both the global sports industry, as well as the international trade activities of MMI.

The press conference itself was a rather surreal affair, attended by SNEWS®, several key journalists representing leading trade publications in Germany and Europe including SAZ, and about 120 Chinese journalists from newspapers, magazines and broadcast media. At times it became an adventure to take notes while seated in the front row as dozens upon dozens of press photographers kept surging the table of speakers like rabid fans storming the stage during a Rolling Stones concert. Not that SNEWS® is in any way drawing a similarity between Mick Jagger, front man for the Rolling Stones, and Wutzlhofer; Joe Flynn, group vice president for the Nielsen Business Media Sports Group; Gernot Rossler, president of FieraBolzano; and Stefan Reschke, ispo exhibition group director.

During the press conference, Wutzlhofer announced a new partnership with FieraBolzano (www.fierabolzano.it) of Italy, which will include the Alpitec trade show (http://www.fairbz.it/alpitec2008/index-e.htm) for alpine ski service and cable car technologies as part of the ispo China show starting in 2009. Rossler told SNEWS® following the press conference that since ski resort managers in China are also the owners of the local ski shop, the ski resorts are important buyers of equipment in China, making the partnership with ispo China a natural and most important one.

By partnering with one of the most successful ski technology trade shows in Italy, ispo China opens its doors to more than 200 ski areas and all the associated retail shops and businesses. According to the Chinese Ski Association, ski resorts in China reported only 300,000 visits in 2000. By the year 2005, visits had increased to 3 million, while 10,000 new skis were purchased that same year. And, by 2010, the Chinese government has plans to add over 300 new ski resorts.

It was clear to SNEWS® that Wutzlhofer is placing high expectations on the partnership with Nielsen, as he looked to Nielsen’s Flynn, seated to the left of the podium, as he said, “Our strategy is clearly geared toward meeting the interests of the retailers (at ispo China), but we are also assisting our exhibitors in entering these rapidly growing markets and developing their international strategies. The latest example of this is our partnership with Nielsen Business Media to support manufacturers from the North American continent to gain access to the Asian-Pacific market.”

Wutzlhofer added, “Thanks to our new partnership, the number of U.S. brands at ispo China will considerably increase.”

While wandering the show, SNEWS® took note of the brand quality and representation, which naturally included Asian brands, such as BlackYak, Kailas, Kolon Sports and Ozark. European and U.S. brands were also well represented on the trade show floor, and included Anky, Arctic Fox, Asolo, Burton, Cordura, Exel, Garmont, Gore-Tex, High Rock, Invista, La Sportiva, Lowa, Lizard, Lowe Alpine, Millet, Montana, Morresi, Northland, Quiksilver, Riechmann and Sons, Sympatex, Teva, Toray, Uvex and Vasque.

Not unlike ispo Winter, where international villages gather exhibitors from select global regions into one market area for greater representation, ispo China featured: a United Kingdom village with Harrows, Karrimor and PIL Membranes; a Scandinavian village with Exel, Fjallraven, Gerber, Halti, Hanwag, Light My Fire and Silva; a Spain village with Actual Colors, Bastard, Buff, Diroca, Mund and Munich; and an Italian village with Tecnica, Dolomite, Nitro, Nordica, Rollerblade, Roces, Colmar, Rovera, Ice, Kong, Carrera, Mico, Masters, Brugi and Bailo.

In addition to the trade fair where networking, checking out new products and placing retail orders were primary goals, ispo China featured retailer training with the Asia-Pacific Snow Conference presented by Toray. The two-day conference brought in market experts from all genres, including Dave Matz, president of the Grassroots Outdoor Alliance, to talk to nearly 120 Chinese retailers about creating a sustainable snowsports marketplace. Other presenters included Zhang Yi Wan, owner and co-founder of Yoho youth magazine; Oliver Fenwick-Ross of Mahon China; Steve Zdarsky, CEO of Mellow Parks China and snow program manager of Quiksilver China; Eli Keslovitz, brand manager Forum/Four Square/Special Blend China; Berlin Bao, sales manager of Tecnica; Andrea Coatti of Dolomiti Mountain Resort in Heibi, China; and Wang Hong Bin, managing editor of Speed Ski and Snowboard Magazine.

The show also included two noteworthy exhibitions. The first was the Retailing Demo Shop by CORA (Chinese Outdoor Retailer Association), which demonstrated the best ways for retailers to merchandise and organize a sporting goods store in order to maximize customer satisfaction and maximize return on investment. The second was the Golden Eyes on the Fake area where visitors were educated in detecting fake products, still a serious issue in the Asian markets. Roger Zeng, executive director for CORA, told SNEWS® that many Chinese retailers and manufacturers are realizing that for the Chinese outdoor market to continue to grow and remain healthy, the products must be of first quality and not imitations or copies, as fakes only serve to dilute the economic strength of the market for everyone.

This is our first report in a series looking at the China market, from interviews and one-on-one conversations with key players in this developing marketplace during our visit to ispo China.

SNEWS® View: This show, our first visit to Beijing and our second to China (we were in Shanghai in September 2006), further solidified our belief that China is an exploding market full of entrepreneurs and opportunity, and certainly not a market for the timid. Those sitting on the fence wondering how or if or why they should enter the market will be left with little more than splinters in the backside for their trouble if they don’t act soon to get involved, while those who get in now will certainly reap the rewards — albeit rewards that will take an investment of time, money and a certain amount of willingness to take a risk and make mistakes along the way. Reminds us, in many ways, of the U.S. outdoor market 25 years ago when Outdoor Retailer was a fledgling trade show, not unlike ispo China now, full of eager retailers and manufacturers trying to make a go of an industry they collectively believed in.

It seems strange to think of a country with such a long history in terms of cultural evolution and revolution as China having an outdoor market that is still in the early stages of development, yet that is completely the case. Li Jian-hua, chairman of the China Outdoor Commerce Association, told SNEWS® that the outdoor industry is only 10 years old in China. Jian-hua placed the size of the Chinese outdoor market at 2.2 billion Chinese Yuan Renminbi (USD $310 million), while others we spoke with place the size of the market closer to USD $400 million. Either way, current market growth is 33 percent to 40 percent and trending upward.

What is driving the growth is an economic revolution unlike anything we have witnessed in our lifetime, driven by youth and a pursuit of comfort. Larry Hasson, CEO of RISC International (www.risc-int.com), has stated that the income is doubling every five years in China, resulting in the greatest creation of wealth since the establishment of humanity. If that doesn’t speak to market opportunity, nothing does. But, the key is not thinking of this market as we do our own. If our brief time there showed us — and our interviews with dozens of experts who know more about China than we could ever hope underscored — to be successful in China, you have to think entrepreneurially and different while at the same time realizing the Chinese businessmen want the same things — ROI and profit.

ispo China will continue to grow. If you weren’t there this year, you should at the very least consider a visit in 2009 and explore the opportunities. And yes, we did ask exhibitors and retailers alike which show they preferred — OutDoor Asia in Nanjing (no affiliation with the OutDoor show in Europe) or ispo China. The consensus was that both shows are currently important; however, ispo China is more professional and more international in flavor. OutDoor Asia is much smaller and more local and regional in flavor. It would be our opinion that this market cannot continue to support two shows, however, so it remains to be seen which one gets the nod.