Warm out­look

China Daily (Hong Kong) - - FRONT PAGE -

Ma­jor out­door ap­parel brands are op­ti­mistic about the Chi­nese mar­ket.

IBruno Fel­tracco, the vice-pres­i­dent and man­ag­ing di­rec­tor of Out­door and Ac­tion Sports of ap­parel group VF Asia Pa­cific, says the out­look is pos­i­tive.

“I thinkwe’ll stay (in­China) for­ever be­cause all the other coun­tries are much less prof­itable than China, and China is still a grow­ing mar­ket. Oth­ers can’t grow more than 6 per­cent a year,” says Fel­tracco, who was at­tend­ing the re­cent North Face Out­door Fes­ti­val held in Bei­jing’s Yuyang Ski Re­sort.

Fel­tracco over­sees the growth of VF’s brands of out­door and ac­tion sports across Asia and the Pa­cific, in­clud­ing The North Face, Vans, Reef and East­pak. One of his fa­vorites, The North Face, is the No 1 brand for VF, which con­trib­utes about 18 per­cent of the to­tal group sales. China is the sec­ond largest mar­ket in the world for The North Face, af­ter the United States.

The US out­door prod­uct com­pany spe­cial­izes in out­er­wear, footwear and out­door equip­ment like back­packs, tents and sleep­ing bags.

One of its most cel­e­brated prod­ucts is a men’s chromium ther­mal jacket. It has a com­fort­able soft shell of fleece lin­ing, and its hightech ex­te­rior fab­ric is 100-per­cent wind­proof. At the same time, it main­tains a com­fort­able level of breatha­bil­ity.

Another out­door la­bel, North­land, is also op­ti­mistic about the China mar­ket.

“China is one of the largest mar­kets for North­land at present. We are here to cel­e­brate the brand’s 40-year an­niver­sary,” says the brand’s founder Ger­walt Pich­ler, who flew from Aus­tria to Bei­jing for the event.

Out­door brands en­tered the Chi­nese main­land mar­ket in the late 1990s and early 2000s, much later than the lux­ury and fash­ion la­bels.

The North Face en­tered the mar­ket in 2000 un­der a li­cens­ing model, which means the brand did not open a store, but col­lab­o­rated with its part­ners in China. In 2007, VF took over the busi­ness and started di­rect op­er­a­tion of The North Face brand. The same year, the brand saw a re­mark­able sales growth of 150 per­cent since the takeover.

North­land shares a sim­i­lar path. It en­tered the Chi­nese mar­ket with part­ners in 2003, and now has sev­eral hun­dred stores in the coun­try. Though the com­pany did not re­veal its spe­cific sales fig­ures, Pich­ler says China en­joys sta­ble growth ev­ery year, and the coun­try will be the brand’s fu­ture fo­cus.

The North Face’s Fel­tracco says the out­door gar­ments are ex­pe­ri­enc­ing the sec­ond phase of its mar­ket­ing in China.

“The first phase was the first four to five years, so we es­tab­lished and we raised The North Face flag. We have opened stores in mostly fir­stand sec­ond-tier cities. Nowwe have Phase 2, which is to con­tinue to grow. It is very im­por­tant to un­der­stand Chi­nese con­sumers, and we can give them the right things and what they re­ally want. Over­all, we n the glam­orous fast-paced fash­ion in­dus­try, some fash­ion houses take about two weeks to turn a sketch in the de­signer’s hand­book into a jacket dis­play in the store. But for aNorth Face jacket, the process takes at least 16 months. Per­haps that iswhy out­door gar­ments do not look “trendy”, be­cause they are of­ten de­signed more than a year be­fore theymeet the buy­ers. But th­ese “not-so-trendy” gar­ments arenow­partof one of the fastest-grow­ing ap­parel sec­tors in China. are in­vest­ing in the sec­ond phase,” Fel­tracco says.

For China’s out­door sports fans, this is good news. By say­ing “in­vest­ing”, the pres­i­dent means The North Face is do­ing TV cam­paigns for the win­ter, which has never been done in the Chi­nese mar­ket be­fore.

The brand’s de­sign team is orig­i­nally based in Cal­i­for­nia. But now, it has de­vel­oped a de­sign team in China to bal­ance the global de­sign el­e­ments. For ex­am­ple, a black jacket in theUS might be changed to red in China to cater to Chi­nese con­sumers.

For some brands, their “in­vest­ment” gets in­no­va­tive. For in­stance, Gore-tex, the well-known com­pany pro­vid­ing wa­ter­proof and breath­able fab­ric to out­door brands, in­tro­duced the Out­door Ex­plo­ration Fund to China in 2007. The fund is aimed at help­ing promis­ing ath­letes to pur­sue out­door sports, by sup­port­ing them with the right gar­ments and equip­ment. There were 300 ap­pli­cants from China when the spon­sor­ship first started, but this year, more than 10,000 ap­plied.

Ac­cord­ing to sta­tis­tics from the China Out­door Com­merce Al­liance, out­door brands in China en­joyed a 47 per­cent an­nual growth in profit from 2000 to 2010. In 2010, Chi­nese con­sumers spent 7 bil­lion yuan ($1.15 bil­lion) on this sec­tor, and in 2012, the num­ber soared to 14.5 bil­lion yuan.

Lo­cal brands are also mak­ing in­roads into the mar­ket. In 2009, there were 286 for­eign brands in China, oc­cu­py­ing 70 per­cent of the mar­ket share.

Now, there are 405 lo­cal brands and 418 for­eign brands in China, an al­most 50-50 mar­ket share.

Sun Guan, pres­i­dent of China Out­door Com­merce Al­liance, says the mar­ket is still grow­ing, and he sees great po­ten­tial. He fore­casts that China’s mar­ket will keep grow­ing for at least another 10 years. Con­tact the writer at gan­tian@chi­nadaily.com.cn.


In­ter­na­tional out­door la­bels, like The North Face, are em­brac­ing the grow­ing mar­ket in China.


Lo­cal la­bels catch up with the coun­try’s grow­ing de­mand for out­door sports prod­ucts, shar­ing about half of the mar­ket.

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