Nike on China’s Growing Fitness Industry

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China has already changed the course of history through the several economic reforms they have launched.  Indeed, China became richer and heavier. Almost 100 million people in China are now formally obese and the World Food Program has indicated that 23% of boys and 14% of girls under 20 are overweight or obese. According to a recent study, China had the greatest number of obese people in the world last 2016. Of course, being itself, China launched their grand plan of having “Healthy China 2030.”  It is a blueprint that spans environment management, the medical industry, food and drug safety and public health services. Traditionally, China’s public health system, in both primary and community level facilities, were severely under-resourced which meant the health care emphasis was very much on a cure, not mollifying prevention. To aggravate this, since China’s economy changed, including its eating habits. A diet that had, on the whole, been historically balanced, had to contend with the introduction of a plethora of low-cost, high-sugar, high-salt and high-oil meals and snacks. The program called “Healthy China” intends to tackle these issues head on when it comes to dieting and being healthy. There is a commitment to providing universal modern healthcare by 2020 and the State is also introducing health education into school curriculums. It currently encourages the program that intends to rev up life expectancy and bring China’s healthcare to the same standards as North American and Western European economies.

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People actively try new fitness equipment to stay fit as they pay more attention to body building and a healthy lifestyle. The fitness industry is developing and together with its technologies, people are starting to be used with sports equipment as it becomes a trend in China. Healthy food has also been promoted due to the fast development of the fitness industry in China. China’s sports and fitness market is predicted to exceed $725 billion in value by 2025, more than triple the $216 billion it was worth in 2016, according to a report. The Chinese government is backing programs which promote sports among the population, with the country’s State Council aiming to increase the size of China’s sports and fitness market to exceed trillions of RMB in value by 2025. Moreover, China is supporting the development of soccer by enhancing its performance in the sport. In addition, the hosting of the Winter Olympics in 2022 will further promote winter sports domestically. Traditional wellness practices are being combined with modern popular sports, with people now paying more attention to their health and athletic performance, which in turn substantially increases the demand for sportswear. There is much higher demand for sportswear that can enhance sports performance, which means that sports participants and consumers are tending to choose sportswear based on functionalization, differentiation, and premiumization.

Shifting from a manufacturing-heavy economy toward a more service-oriented one, China is seeing a massive increase on a more affluent and organized consumer landscape, and the Chinese consumers organize themselves by the sports. It’s one of Nike’s most unique strategies and is known internally as the company’s “category offense.” The apparel brand focuses on serving a growing a base of consumers through each specific sport. Of all the categories so far, Nike’s lifestyle category is the biggest. Nike is currently in a bit of luck. It is perhaps one of the most operative ways of engaging business in Asia as it is teaming up with the government – in spite of the Rape of Nanking incident. Currently, the sports and fitness industry is an estimated 0.7% of GDP in China and Chinese officials aim to grow the market to more than RMB 3 trillion or $460 billion, 1% of GDP, by 2020. In conclusion, Nike has partnered with China’s Ministry of Education to encourage physical activity in schools, a program the government insists is more than a vanity exercise. For school coaches and local leagues, the retail giant enlists best-in-class international training to help elevate the school games for kids. Looking ahead at China, Nike is very confident. But is not complacent. They are aware of the competition that is very intense in the market.

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