Running Into Success
Rise in marathons boosts sports industry
For sports agent Tao Shaoming, December 20, 2015 was just another busy though profitable day. At the Fuzhou International Marathon held in southeast China’s Fujian Province that day, his Ethiopian and Kenyan runners swept the awards in both the men and women’s events, setting another record for the agency he had established three years ago.
“There are more and more marathons in China. My schedule this year is extremely tight as [my agency’s] runners will participate in at least 30 races,” he told Chinafrica.
Tao’s tight schedule mirrors the explosive growth of marathons in China. Statistics from the Chinese Athletic Association (CAA) show that while only 22 marathons were held in 2011, the number jumped to 51 in 2014. Last year, the CAA registered 123 marathons, with more than 2 million people, including both professional runners and amateurs, participating. It is predicted that the number of marathons will exceed 200 this year and 500 in 2020. Tao estimated the actual figures will be even higher as many more races are held besides those registered with the CAA.
Behind the marathon explosion is the public’s and professional athletes’ rising passion for the sport. Businesses have also sensed lucrative prospects and are casting their nets wide to capture some of this niche market.
Eyes on the prize
Tao quit his job as coach of China’s national marathon team in 2012 and devoted his time to training and managing African professional runners, entering them in races around the world, especially in China. Currently, his agency has offices in Kenya, Ethiopia and Uganda where the team boasts more than 200 African athletes.
“These countries, full of talented runners, are like gold mines,” Tao said. In African countries like Kenya, agents organizing athletes to run marathons have a history of more than 30 years. But the business was monopolized by European and American agents. Compared to them, Tao, though a late entrant, has the advantages of his experience as a professional coach and knowledge of the Chinese market.
“Our runners mainly focus on commercial marathon races, which attract top participants with juicy championship bonuses and appearance fees,” Tao said. “It is a kind of job for them. A long-distance runner can support an entire family.”
Long-distance races like the Fuzhou marathon attract not only professional athletes but also thousands of amateurs. Wang Fengguan, a graduate from Beijing’s Beihang University, developed a passion for running in 2010. It has helped him slim down from 75 kg to 60 kg.
“But more importantly, running keeps me stay positive mentally,” Wang said. Like Wang, more Chinese are joining the running army.
Hefty returns
Businesses have found opportunities in the growth of marathons and the large volume of participants. Running generates a long industrial chain, straightaway boosting sportswear and equipment sales.
According to Er Ding, General Manager of the clothing department of Tmall, China’s largest online sales platform, sportswear sales have grown very fast during recent years. “In 2015, running shoe sales accounted for 49 percent of all sport footwear sales on our platform,” she said.
Next along the chain comes the commercial development of races by businesses. “That includes naming rights, sponsorships, advertisements, promotions and broadcasting rights,” said Tan Jianxiang, a professor with the School of Physical Education and Sports Science at South China Normal University.
Wisdom China, the first Chinese sports events and media operator to go public, is a leading player in organizing running events. Operating marathons has generated lucrative revenue for the company. Its 2014 mid-year financial report showed gross profit from marathons and dragon boat races in the period from June 2013 to June 2014 increased 67 times - from 700,000 yuan ($106,000) to 44.52 million yuan ($6.75 million).
The 2015 report says revenue from sports events, including marathons, reached 106 million yuan ($16.1 mil-
Despite the rapid development in the past two years, there is still a huge gap for [running] to be a mature industry. In the next five years, the market value of businesses related to running will reach 30 billion yuan ($4.5 billion).
Zhang Yongliang, Director of Marathon Office, General Administration of Sport of China
lion), a year-on-year increase of 49.9 percent.
“Sponsoring marathons is rewarding for businesses,” said Tan. In the eyes of businesses, the value of sports events lies in their influence. “Marathons are no doubt good events with widespread influence,” Tan added.
Starz International Sports, former Chinese NBA star Yao Ming’s sports marketing company, moved into the running events space in 2014. The company proposes to boost the sector by holding 40 running events and attracting more than 2 million participants in the next three years.
The markets has many segments. “Advising how to organize events is also one of our services as we have experience after organizing so many athletes to run in international major events,” Tao said. His agency also provides services like sports travel and training for runners. “The surging number of amateur runners presents great opportunities. If it’s a big event with massive participation, a running tourism group will contribute considerable revenue to local transportation and hospitality sectors,” he said.
This explains why more Chinese cities are eager to hold marathons. Apart from boosting local tourism, Tan said they help improve a city’s international image. “Marathons in London and Tokyo have become the cities’ name cards, attracting top athletes and large audiences.” Zhang Sijie, head of brand operations at the Xiamen International Marathon, told the media the event in 2014 brought tourism revenue of 9 billion yuan ($1.4 billion) to the city.
Expertise needed
Running events like marathons and related commercial developments are gaining support from the government. Du Zhaocai, Director of the Athletics Administrative Center of the General Administration of Sport of China (GASC), announced early in 2015 that the CAA would scrap lengthy procedures to obtain administrative approval for holding marathons and encourage every sector to jointly push forward their development.
The State Council, China’s cabinet, has also highlighted the role of the sports industry in its future strategic development, positioning it as a green and emerging industry. It pledged to support the sector and bring in revenue totaling 5,000 billion yuan ($758 billion) by 2025.
However, despite the huge potential, it is still a fledging sector. According to Zhang Yongliang, Director of the marathon office of the Athletics Administrative Center of GASC, the United States, which has the world’s largest sports industry, held 983 full marathons in 2014. In comparison, China had only 51 marathons the same year. “Despite the rapid development in the past two years, there is still a huge gap for it to be a mature industry,” Zhang said. However, the industry is picking up tempo. “In the next five years, the market value of businesses related to running will reach 30 billion yuan ($4.5 billion),” he predicted.