In this article:


It’s no easy task finding sectors with resilient growth in China, where the economy is faltering and geopolitical risks persist. But sportswear is one that’s returned to the right track.

This week’s Chart Room shows how the size of China’s sportswear market, measured by retail sales, has jumped to a record 386bn renminbi (US$53.5bn) in 2023. Over the last decade, the market has been expanding at an annualised rate of around 11 per cent.

This growth comes despite severe lockdowns across China in 2020 and 2022 hurting sales and contributing to inventory gluts for sportswear retailers. But a steady rise in sport participation and an increasing focus on health and wellbeing have since boosted consumers’ appetite for apparel and brought inventory back down to normal levels. 

This evolution reflects the changing habits of the average Chinese consumer. Historically, a country’s sportswear consumption tends to stay strong after its GDP per capita exceeds US$10,000; China crossed that line in 2019 and is currently at around US$12,600. 

Yet an average Chinese citizen currently spends only about US$40 on sports apparel and shoes each year, lower than in most countries whose per-capita economy is above the US$10,000 level. For instance, an average South Korean spends about $143 on sportswear a year, more than three times that of an average Chinese. The spending differential is much wider than the two countries’ per-capita economic gap, implying ample room for catch-up growth in the Chinese market.

Despite these strong fundamentals, Chinese sportswear companies are largely trading below their long-term valuation trends, after investors dumped their shares amid macro challenges in recent quarters. This creates opportunities to accumulate ownership in market leaders. Potential winners are likely to emerge from companies with strong brands, consistently high returns on capital and decent free cashflows. 

Now China’s sportswear sector is back on its feet, there’s plenty of road left to run.

Alex Dong

Alex Dong

Research Associate

Yi Hu

Yi Hu

Investment Writer