Game changers for China's sports industry

The sports industry in China has grown rapidly in the past few decades, sprinting from the sidelines to become a significant player on the world stage. In a sector once dominated by sports companies of Western countries, China's approach to sports development — backed by policy guidance and public initiatives, innovation and strategic governance — has changed the dynamics. Chinese firms are now competing head-to-head with established Western counterparts, leveraging strong cultural values and unique business strategies.

In China, the government acts as a strategic enabler in the sports industry. Through initiatives such as Healthy China 2030, the Chinese government promotes sports participation, builds infrastructure and creates an environment where sports firms can thrive.

Western markets operate in a laissez-faire environment, where the government's role is limited to regulatory matters rather than active involvement in the industry's development. In the United States and Europe, sports firms rely on private investments, sponsorships and market demand, with little or no state intervention.

Another key factor contributing to the success of China's sports industry is its approach to narratives. Sports stories in China focus on collective success and national pride, emphasizing goals such as the development of sports culture, national unity and international prestige. This resonates deeply with Chinese society, which values community and collective well-being over individual achievements.

In contrast, Western companies tend to focus more on individuals. Athletes are celebrated for their accomplishments and performances. This works well in societies that value personal achievement more. However, China's emphasis on collective success offers a more inclusive approach that appeals to a broader audience. By focusing on national pride and unity, Chinese sports firms are not only building loyalty at home but also fostering positive perceptions abroad.

These collective narratives are particularly powerful in the context of China's growing influence on the global stage. As the country invests in both domestic and international sports infrastructure, its message of unity and progress resonates at a global level, encouraging stakeholders from various sectors to engage with Chinese sports firms.

China's city clusters are another major advantage for its sports industry. City clusters create an ecosystem where companies can share resources, knowledge and best practices and allow collaboration between businesses, government bodies and research institutions. Many sports companies are located in major cities such as Beijing, Shanghai and Guangzhou. Companies benefit from shared infrastructure, close proximity to partners and access to a large pool of skilled labor.

For example, Shenzhen's sports tech firms are using local innovations in artificial intelligence and big data to enhance their products and services. Beijing, with its concentration of academic institutions and even infrastructure, has become a major center for sports management and research.

On the other hand, Western sports firms operate in more dispersed markets. While this means fewer competitors, it also means less collaboration and slower innovation. In the sports industry, where speed is key to staying ahead of trends, Chinese firms' ability to cluster and innovate in urban hubs gives them a distinct advantage.

There is also a difference in the way companies are governed. Chinese companies typically have larger, more inclusive boards that include government officials, business leaders, and community representatives. This diversity ensures that strategic decisions take into account a wide range of interests, which is crucial in an industry as complex as sports.

Western companies tend to have smaller, more elite boards. They focus on efficiency and quick decision-making, which suits the competitive nature of Western markets. But smaller boards can sometimes miss out on the diversity of perspectives that larger, inclusive boards provide.

What's particularly interesting is that unlike in the West, where firms stay within strict financial limits and have to rely on private investments, Chinese sports companies often operate in an environment where the government facilitates access to financing and innovation resources. If a company faces financial difficulties, it is more likely to receive policy or institutional assistance. This allows companies to focus on long-term growth, without being bogged down by short-term financial pressures, making them more resilient and enabling them to capitalize on opportunities, both at home and abroad.

While China's sports industry has made significant strides, there are still challenges ahead. As policy frameworks continue to encourage growth, Chinese sports companies need to focus more on innovation and branding to maintain a competitive edge as also adapt their strategies to appeal to a diverse global audience.

Chinese sports companies also need to further develop their global presence, building strong brands that can compete with established names from Europe and the US. This requires not only innovation in products and services but also the ability to tell stories that resonate across cultures and markets. This means striking a balance between staying true to the country's collectivist values while embracing the individualism and personal narratives that dominate in many Western markets.

China's sports industry has transformed from a regional player into a formidable global competitor. The industry is well-positioned for continued growth and success. With a sharp focus on innovation and international expansion, the future of China's sports industry is bright. But success will depend on the ability of Chinese companies to adapt to the changing global landscape. By combining their strengths with a more global outlook, Chinese sports companies will not only change the game but redefine what it means to be a leader in the sports world.

The author is a professor of innovation studies at Liaoning University.

The views don't necessarily reflect those of China Daily.

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