Sports industry losing appeal despite recent gains

Despite its prowess in elite international sports events, China remains far from a world sports power, lacking development in the industry generally, said an annual report on the development of the sports industry in China.

Inspired by achievements such as Guangzhou Evergrande's successful AFC Champions League campaign in 2013, the public's awareness of sports entertainment has grown significantly in recent years, boosting several industries such as sporting goods manufacturing, ticket sales and brand endorsements.

Sales of sporting goods in China reached 79.7 billion yuan ($12.8 billion) in the first three quarters of 2013, a 10.6 percent year-on-year increase, with profits of 3.2 billion yuan, a 3.4 percent rise from 2012, according to a report released on Wednesday by the Social Sciences Academic Press and the Capital Institute of Physical Education and Sports.

However, the sports industry remains behind world sports powers such as the United States, and profit growth has slowed since 2010.

"Against the backdrop of the planned economy, the Chinese government used to play a dominant role, which dampened the enthusiasm of private investors and impeded the introduction of a professional approach," said Eric Ho, executive director of Peking University's Research Institute for Sports Science.

Compared with the US, where sporting goods trade has accounted for 5 percent of its GDP on average in recent years, China's equivalent production brought a scant 0.37 percent of GDP in 2012, according to the report.

China currently has 894 sporting goods manufacturers in operation, employing 267,446 people, but most of the major brands suffered a slump in business in 2013.

The report said that the once-popular athletic goods designed and made in China for a global market are losing appeal overseas because of the blunting of the country's competitive edge in its labor force.

The trade competitiveness index - an indicator of product popularity in the global market - of Chinese sporting goods has consistently declined since 2009. Experts said the slump should be attributed to the sports products industry's underdeveloped business model.

For instance, the State Administrative Center of Basketball has full control of the Chinese Basketball Association's operations, including sponsor selection, facilities upgrades and player development, leaving little room for commercial partners to implement their own brand promotion strategy for a greater profit margin.

sunxiaochen@chinadaily.com.cn