According to a recent research report, China's mainland high-performance outdoor apparel market is expected to achieve a compound annual growth rate of 16% from 2024 to 2029. In the medium to long term, domestic demand for sports footwear and apparel will enter a more mature development phase characterized by greater professionalization, segmentation, and diversification. Currently, the expansion of domestic sports brands is gradually shifting toward product and brand-driven strategies. Since Q3 2025, consumer clothing expenditure has remained volatile, with the sports footwear and apparel segment expected to outperform the broader textile and apparel market. Meanwhile, comprehensive sports brands maintain healthy inventory-to-sales ratios of around 4-5, sustaining long-term growth optimism for the sports footwear and apparel sector within the clothing industry.
**US/Japan Markets: Sports Demand Shows Resilience During Economic Fluctuations, Leading Brands Focus on Product and Brand Value Creation**
1) Industry Analysis: The rise of sports industries in the US and Japan was not coincidental but resulted from multiple factors converging during specific historical periods. Under strong economic recovery waves, public consumption capacity improved while government policies played crucial catalytic roles. Combined with major sporting events like the Olympics, these factors sparked social enthusiasm for sports and drove industry development. Despite subsequent economic volatility, sports participation and footwear/apparel demand remained resilient due to increased public interest in health and fitness. US fitness club membership rose 3.7% to 68.9 million in 2022, while outdoor activity participation among Americans aged 6 and above grew 4.1% in 2023. Japan's consumer spending on sports footwear and apparel also maintained steady growth from 2022-2024.
2) Corporate Competition Factors: Product strength and brand value serve as core development drivers for international sports brand leaders. As the sports footwear and apparel industry developed, international leaders Nike and adidas rapidly rose to prominence. Analysis of their development trajectories reveals that product R&D and brand building have been central throughout their growth, while channel development primarily relied on retailers alongside appropriate direct-to-consumer (DTC) deployment. Nike entered a destocking phase in the second half of 2024, which continues currently. Adidas has benefited from proactive product strategies, including strengthening professional sports product development and successfully creating classic footwear lines like Samba and Gazelle through effective marketing, driving global business recovery.
**China: Running and Outdoor Subcategories Drive Growth, Product and Brand Become Key Corporate Development Factors**
1) Industry Analysis: Since 2022, benefiting from increased health awareness, public participation in running has further improved while outdoor sports categories are experiencing rapid development. China's mainland high-performance outdoor apparel market is projected to achieve a 16% CAGR from 2024-2029. In the medium to long term, domestic sports footwear and apparel demand will enter a more mature development phase characterized by greater professionalization, segmentation, and diversification.
2) Corporate Competition Factors: Domestic sports brands' expansion is gradually shifting toward product and brand-driven strategies. In professional products, domestic sports brand companies possess comprehensive R&D facilities while maintaining continuous R&D investment. In 2024, R&D expense ratios for Anta Sports, LI NING, XTEP INT'L, and 361 DEGREES remained around 2-3%. Under sustained R&D investment, domestic sports brands have achieved significant research results in professional products in recent years, such as Anta's nitrogen technology and XTEP's XTEPACE technology. Brands also endorse their image through sponsoring professional events and athletes. In channel operations, as domestic sports footwear and apparel companies operate large-scale store networks, improving retail management capabilities has become key to enhancing profitability.
**Investment Recommendations**
The sports footwear and apparel sector highlights recommendations for leading companies with strong earnings certainty, including Anta Sports, which demonstrates excellent group operation capabilities. Its other brand divisions, represented by Descente and KolonSport, show outstanding growth rates, supporting long-term sustainable growth. Current share price corresponds to 18x 2025 PE for the company.
LI NING is recommended for its significant long-term earnings flexibility, with current share price corresponding to 17x 2025 PE.
XTEP INT'L is recommended as a running track operation leader, with stable short-term main brand performance. New brand Saucony offers long-term revenue and profit growth potential, with current share price corresponding to 11x 2025 PE.
Other companies worth attention include 361 DEGREES and TOPSPORTS.
**Risk Warnings**
Weak consumption capacity and volatile consumption environment risks, store expansion falling short of expectations, e-commerce business development below expectations, management team optimization not meeting expectations, and foreign exchange rate fluctuation risks.
Comments