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Incentives expected to inspire athletics enterprises

Xu Wei
Updated: Aug 18,2021 09:04    China Daily

In its latest push to underpin the growth of the sports industry, the State Council, China's Cabinet, has unleashed a slew of incentives for sporting businesses, underscoring the need to promote the digitalization of the sector and spawn more new products and business models.

The new support measures will serve as a confidence boost to enterprises in the industry and will help domestic players grow bigger and stronger, business leaders and analysts said.

The government is aiming to increase the gross output of the sports sector from 2.94 trillion yuan ($454 billion) in 2019 to 5 trillion yuan by 2025, according to a recent blueprint promoting public participation in physical exercises.

The document pledged steps to develop a modern sports industry system powered by the integrated growth of high-end manufacturing and modern services sectors.

To promote the digital transformation of the sector, sporting businesses will be encouraged to take advantage of cloud computing, digitalization and smart technologies. The nation will foster a number of high-tech, high-growth and "hidden champion" companies involved in fitness facility supply, tournament organization and the research, development and manufacturing of fitness equipment.

The government will encourage the growth of companies tied to outdoor sports and smart sports so as to give rise to more new products and business models.

The nation will designate model cities in a bid to encourage local authorities to innovate policies and establish mechanisms to promote sports consumption.

Shawn Lee, CEO of Cowell Group, a producer of fitness equipment in Xiamen, Fujian province, said the latest policy document has given businesses in the sector a high degree of confidence.

"We firmly believe that there is immense untapped potential for the domestic market for fitness equipment," he said.

Lee said the 2020 Olympic Games in Tokyo, which concluded last week, and the upcoming Beijing Winter Olympics in February are also major influences on public enthusiasm for sports.

Last year, Cowell's sales volume increased by at least 50 percent year-on-year thanks to robust market demand and the company's efforts to improve sales with e-commerce, he said.

"We expect the public to maintain high enthusiasm for exercise in the post-pandemic era, with fitness venues becoming more diversified and the willingness to spend on sports becoming stronger," he said, adding that the company sees the next five years as a major window of opportunity for its growth.

Zhu Ding, vice-president with sportswear producer Xtep, said the rollout of the official measures will create more space for the growth of the sector.

"It is very significant in the promotion of a high-quality sports industry and the effort to raise public awareness on fitness and health," he said.

"With policy support, the rise of domestic brands and the increase of consumer spending power, sportswear producers can grow bigger and stronger more easily with higher degrees of standardization," he added.

Inspired by the latest document, Zhu said the company's design, research, development and sales will focus more on teenagers.

Cao Keqiang, a professor with the School of Economics and Management at the Shanghai University of Sport, said enabling wider participation in sports and cultivating public fitness habits remain a fundamental way of promoting consumer spending and spurring the growth of the sports sector.

He noted that China's sports sector is still at an early stage of development, and there is immense room for growth.

"For the government, in addition to support measures in policies and funding, it is more important to deepen reform to streamline administration, improve compliance oversight and services and give full play to the role of the market in order to shore up the growth of the sector," he said.