The Spring of Winter Sports Business
Ice and snow sports enjoy greater popularity in China, and with significant economic benefits
Winter sports, which used to be considered a marginal activity, have been gaining popularity in China, especially since 2015 when Beijing won the bid to host the 2022 Winter Olympics. A comparatively frigid northern region and a relatively warm southern part distinguish China’s landmass. But thanks to technological progress, indoor ice rinks and ski resorts have been built, making winter sports accessible to people all over the country. At the same time, the trend is boosting the winter sports economy, with fast growth from upstream to downstream.
Prosperous sector
Recent data backs up this enthusiasm. According to a National Bureau of Statistics survey, China has met its goal of involving 300 million individuals in winter sports. More concretely, as of October 2021, the number of practitioners nationwide had reached 346 million, with a participation rate of 24.56 percent. Commercial query platform Tianyancha’s data shows that the number of newly registered winter sports-related businesses saw an average annual increase of 24.3 percent from 2015 to 2021, with 21,500 firms in operation in January 2022.
Currently, 28 provincial-level regions have proposed policies centered on winter sports tourism and investment in the industry, including infrastructure, equipment, sport gear and so on. The market is thriving. According to the China Winter Sports Tourism Development Report (2022), 157 construction projects
According to a recent study, the ski market penetration rate in China is just 1 percent, compared to 35 percent of Switzerland, the world’s leading ski nation. It is also far below that of Japan (9 percent) and the U.S. (8 percent).
were completed between 2018 and 2021, with a combined investment close to 1 trillion yuan ($157.2 billion).
Data from the National Administration of Sport of China shows the country had 654 standard ice rinks in January 2021, a 317-percent increase from 2015. According to an industry white paper, the country boasts the largest number of indoor ski resorts in the world, amounting to 36 in total. The facilities have seen an increasing influx of people, leading to significant
revenue growth for investors.
The Chengdu Sunac Snow Park, an indoor ski resort that opened in June 2020, has reported steady growth in both client numbers and income. “Compared to the previous year, the number of visitors has grown substantially, reaching almost 7,000 per day in peak season,” said Fang Zhiheng, the company’s General Manager.
Ski makers, gondola builders and others in the industry’s supply chain have all witnessed an increase in business. Fujian Snowman, a manufacturer of winter sports equipment established in 2000, has seen its sales grow at an annual pace of 20-30 percent in recent years. “Our brand is being promoted by the Beijing Winter Olympics,” Chi Ye from the company’s investment department told Chinafrica.
Wang Zhan, President of Skinow, a Chinese company offering indoor ski simulators and ski lessons, said the customer conversion rate in its more than 50 stores throughout China has increased from 3-5 percent to 30 percent today. “We are testing advanced technologies such as virtual reality scene simulation and artificial intelligence ski stance recognition. Our customers will be able to experience them at shopping malls near them,” he added. It’s because of these cutting-edge technologies that everyone in the country is able to take up these sports.
At the same time, the sector’s boom creates momentum for associated industries. According to Qunar, a 1-yuan ($0.16) in income from winter sports tourism can create more than 4 yuan ($0.63) in revenue from other activities (transportation, accommodation and catering). China’s winter sports tourist income is predicted to exceed 680 billion yuan ($106.9 billion) during the 2021-22 winter season, according to research by the China Tourism Research Institute.
Diversification of activities
Winter sports, according to some investors, still have a lot of promise. According to a recent study, the ski market penetration rate in China is just 1 percent, compared to 35 percent of Switzerland, the world’s leading ski nation. It is also far below that of Japan (9 percent) and the U.S. (8 percent).
There are certain difficulties in the way of fully tapping this potential. The primary challenge, unsurprisingly, is how to develop a year-round business plan. Ski resorts and ice rinks must re-invent themselves and offer new activities. “The aim is to create a comprehensive tourist network centered on winter sports. People do not engage in a single activity. Their consumption habits are going to evolve,” said Li Xiao, a manager at the Serdang Snow Mountain Tourism Area in Chengdu, Sichuan Province in southwest China. Since 2017, the area has focused on developing sports-based tourism and expanding activities throughout the year. That is a key for a ski resort to know what else can be available in other seasons in addition to skiing.
Many ski resorts now offer various outdoor activities such as hiking, mountain biking, and cycling, as well as cultural and gourmet events. Transportation and telecommunications facilities, wellness centers, disability services and conference services are all being incorporated into the service mix.
As a result, the industry needs long-term planning. Due to large investment, high operational costs and other variables, profitability usually takes time. Nevertheless, the business is set for expansion, especially after the Beijing Winter Olympics. The overall volume of the sector would reach 1 trillion yuan ($157.2 billion) by 2025, according to the Ice and Snow Sports Development Plan (2016-25).
“The Winter Olympics is a new economic driver,” said Yan Dong, Secretary General of the Guangzhou (Guangdong) Ice Hockey Association. “I am confident that this goal will be achieved.”