Sports Industry Became China's Hottest Industry

Carrie Xu
Senior Manage r, Intern ational l at Pac-12
Confer enceFollowSports Indust ry Became China's Hottest Indust ry

The good news is Sports Indust ry has
become the most popular and o ne e of
the fastest growing indust ry in China in the past
year since a major govern ment reform announ ced in late
2014. Many work in the sports indust ry in China have longed
for this reform for over a decade.
The Histor ic Reform:
In October 2014, China's cabine t, the State
Counci l, issued the "Sugge stions o n Accele
rating Develo pment of Sports Indust ry and Promot ing
Sports Consum ption", , aiming to boost the develo pment of
the countr y's sports sector and grow it into a 5 trilli
on yuan ($800 billio n) indust ry by
Accord ing to Feng Jianzh ong, Deputy Direct
or of the State General Admini stration on of
Sport of China (SGAS), the SGAS has simpli fied admini
strative ve examin ation and approv al proced ures, rescin ded
examin ation and approv al of commer cial and mess sports events
and reform ed o n large- sized sports
venues operat ion and manage ment system, includ ing
granti ng subsidy worth of 870 million yuan to 1,212
sports venues for free-o f-charge ge or low-ch arge use by
the public.
Such moves have trigge red high enthus iasm
among the public to partic ipate in sports and
provid ed great busine ss opport unities s for the
sports indust ry as well.
Over the past year, tons of invest ors
rushed to find golden opport unity to invest in
what they believe is o ne e of the last
few untapp ed market in China, the sports indust ry.

Howeve r, the majori ty of sports consum
ption in China before was for tangib le produc
ts such as sports wear and equipm ent, while very
little was for sports -participati cipation-related on-related ated causes includ ing
buying sporti ng events tickets and hiring traine rs. This was because
in retros pect, sports were run by the
govern ment in the era of planned econom y,
and the govern ment did not open much of this
market to market ization n or global ization n in the
past few decades before this reform except for the sports wear and
equipm ent sector s. The streng ths of
the old system are evident in yieldi ng gold
medals, which reached the peak in 2008 when host China
topped the tally with 51 gold medals at the Beijing Summer
Olympi cs. But the system makes it harder for the market to
Such a manufa cturing-cent g-centered ered consum ption
pattern reflec ts that China's sports indust ry remains
in its infanc y, with a wider range of busine
ss models yet to be develo ped, experts said.

But the Chinese govern ment is determ ined
to realize a shift in the sporti ng focus
from winning gold medals to public well-b eing and sports
busine ss.
Inspir ing more consum ption in fitness servic
es and sports -events-rela s-related ted busine sses-includi ncluding
ng ticket sales, club mercha ndizing g and media rights
trade- to divers ify the busine ss struct ure has emerged
as a priori ty to achieve the goal, said Lin Xianpe ng,
a sports indust ry profes sor at Beijing
Sport Univer sity.
"More than 70 percent of the value in
the sports indust ry in the United States was
genera ted by pro-co mpetition ion busine sses. Compar ed
with the US, we have a huge gold mine, with an
immense number of potent ial busine ss opport unities s that have
yet to be exploi ted," he said.
Chinese billio naires & invest ors rush into
sports indust ry:
Since the ambiti ous plan issued by the
State Council in 2014, Chinese billio naires respon ded
with quick actions and their hands were put firstly to
soccer, as it is the sport the govern ment is pushing
hardest to grow. Below exampl es got most attent ion from nation
al and region al media in the past
In 2016, Wanda Group, a real estate giant
in China, bought stake in Spanish La Liga champi
ons Atleti co Madrid, merged Infront and then bought World
Triath lon Corpor ation August, spendi ng about 11.02 billion yuan
in this area. By doing so, Wanda Group is poised to become
the world’s largest sports compan y.
E-comm erce titan Alibaba (who we all know
now) also showed great intere st as they first
paid 1.2 billion yuan for 50 percent stake in Guangz
hou Evergr ande, China's most succes sful soccer club and two-ti
me Asian Champi ons League winner.
The Nasdaq -listed d compan y, which have
busine ss cooper ations with German champi ons Bayern
Munich, Spanish giants Real Madrid and NBA star Kobe Bryant,
then launch ed its own sports company AliSpo rts in Septem
ber to focus o n profes sional sports.

Two other intern et compan ies LeTV (who
is also the Pac-12 's partner now) and Tencent
jumped o n the bandwa gon by establ ishing respec
tive sports compan ies as well, while Ti'ao Power has been
design ated as the cooper ation partner of China Super League TV
signal making and copyri ght sales at the
prize of eight billion yuan for five years from
2016 to 2020.
Bright Future
As China's sports indust ry further expand s,
it will become more and more attrac tive to
domest ic and foreign invest ors.

Statis tics show that China's sports indust ry
accoun ted for 0.5 percent of the GDP in
2008. It took six years for China to raise the
figure to 0.02 and o nly ly o ne e year
(2016) to 0.7.

As the portal to the "gold mine" is
unlock ed, China's sports indust ry is o n
a high-s peed train and it strikes a win-win for
both China and abroad.

Refere nces and more related articl es:
Yearen der: A new era for China's sports
indust ry
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in sports indust ry in 2016
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Sports sector expect ed to hit 7 trilli
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http:/ /europe.chin n/epaper/2016-11/13/content_22445000 er/2016-11/13/content_22445000.htm 5-11/13/content_22445000.htm
3/content_22445000.htm ent_22445000.htm 445000.htm .htm
China's Growing Sports Empire
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orts-empire/ mpire/China Catchi ng Up To Americ a's Love
For Sports
http:/ /www.forbes. com/sites/greatspeculati tes/greatspeculations/2016/12/ eatspeculations/2016/12/02/china-cat culations/2016/12/02/china-catching-up-to- ons/2016/12/02/china-catching-up-to-americas-lov
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