Original Source: BCC Global
Date: December 5, 2024
Introduction
After the “Year of Outdoor Jackets” in 2023, the outdoor sports and gear market continues to heat up in 2024. Despite an economic downturn and overall consumption downgrades, outdoor brands such as Arc’teryx, Columbia, and The North Face have maintained strong profit margins and growth rates. What consumer needs are these outdoor brands addressing? What are the core strengths of leading brands? How can domestic alternatives build their own brands?
Strong Performance in the Chinese Market for Leading Outdoor Brands
Arc’teryx and Salomon both achieved growth rates of over 30% in 2023. Columbia’s global revenue fell by 5.5% in the third quarter to $930 million, but its Asia-Pacific revenue increased by 17% to $140 million, highlighting robust demand in the Chinese market. Swiss sports apparel company On achieved a net sales growth rate of 79.3% in China, significantly outpacing growth in Europe, EMEA, and the Americas. This shows that outdoor brands’ operations in China are characterized by high profitability and rapid growth.
Outdoor Gear Meets Diverse Consumer Groups
Outdoor sports events are driving outdoor activity participation. Global and domestic events, including the Paris Olympics, the Thomas and Uber Cup badminton championships in Chengdu, and the Formula 1 Chinese Grand Prix in Shanghai, have captured the attention of spectators and sports enthusiasts. The increasing maturity of China’s sports events market has boosted public interest and participation in outdoor activities. According to the China Outdoor Sports Industry Development Report (2023-2024), outdoor sports have become a new lifestyle trend and consumption force. Annual per capita spending for skiing, cycling, and camping has reached 4,910 RMB (680 USD), 4,033 RMB (560 USD), and 3,323 RMB (460 USD), respectively.
In the face of consumption downgrades, outdoor brands are increasingly attracting consumers who used to purchase luxury goods. As consumption patterns evolve, consumers now purchase outdoor gear as a way to showcase their social class or integrate into relevant social circles. As a result, more sports brands are opening stores in high-end commercial districts traditionally dominated by luxury brands. Arc’teryx, for instance, has expanded store sizes and relocated stores to more accessible, high-traffic areas to attract target consumers. U.S. yoga brand Vuori has opened its first store in Shanghai Kerry Centre, while Japanese outdoor brand Mont-bell has entered Shanghai Grand Gateway Plaza. Similarly, British outdoor brand Montane has opened its first standalone Chinese store in Beijing SKP-S, reinforcing its high-end positioning.
At the same time, the functional value of outdoor gear aligns with consumers’ desire for cost-effectiveness. Outdoor jackets, for example, stand out as signature products with superior functionality. Whether during harsh winters or mild spring and autumn seasons, high-end outdoor brands provide exceptional protection and comfort, making them worth the premium price for consumers.
Strategic Differences Between International and Domestic Outdoor Brands
Although the number of participants in outdoor activities is rising, the number of stable outdoor gear consumers has not grown significantly. This highlights the need for further market education. Leading brands are focusing on building high-quality images to attract affluent consumer groups.
Arc’teryx has positioned itself as a luxury sports brand by implementing precise membership systems, targeting specific demographics, and tightly managing sales channels to maintain its high-ticket pricing. Its pricing strategy includes products ranging between 4,000-9,000 RMB (550-1,240 USD) to cater to varying purchasing capacities.
The brand has optimized its membership system, dividing members into four tiers based on annual spending, allowing it to better manage customer relationships and targeted marketing. Arc’teryx’s target consumer group primarily includes men aged 35 to 55, often from high-income sectors like finance. For this demographic, the brand symbolizes luxury and functionality. For example, the brand’s concept stores – which do not sell products – successfully attract this group, blending lifestyle experiences with brand culture and reinforcing brand identity.
Arc’teryx has also expanded its product range, increasing SKUs from 500 in 2019 to 1,200 in 2024. This expansion has not only increased product variety but also addressed niche demands, such as products for women and trail running. Collaborations with trendy brands and limited-edition releases have further revitalized Arc’teryx’s image, attracting younger consumers while maintaining its traditional influence in the outdoor market.
In terms of channel strategy, Arc’teryx has transitioned to a direct-to-consumer (DTC) model, optimized store locations by moving them to lower, high-traffic floors, and maintained a predominantly offline presence, with online sales controlled at 15% to ensure premium customer experiences.
Salomon, on the other hand, has embraced collaborations with niche European fashion and luxury brands to launch limited-edition products, enhancing its appeal to fashion-oriented, high-end consumers.
Moncler, specializing in premium down jackets, has successfully captured the high-end market with its early brand positioning. The brand focuses on durable, urban-friendly fabrics like nylon and leverages celebrity endorsements and TV product placements to expand its influence.
Columbia, traditionally targeting consumers aged 35 to 55, has adjusted its strategy to attract younger consumers, lowering its target demographic to 28 years old. While this segment has yet to scale, the shift reflects the broader trend of market youthfulness.
Among domestic brands, Kailas has adopted a strategy that spans premium to mass markets. By focusing on mountaineering and trail running, Kailas sponsors high-altitude climbing expeditions and international trail running events to attract professional outdoor enthusiasts. It then leverages community events and private domain marketing to broaden its reach, enhancing its market potential.
Conclusion
The outdoor market is booming, driven by growing public interest in outdoor sports, changing consumption patterns, and a focus on functional value. International brands like Arc’teryx, Salomon, and Columbia are leveraging premium positioning, expanded product lines, and targeted marketing to achieve strong performance in China. Meanwhile, domestic brands like Kailas are carving out their niche by focusing on professional outdoor sports and community engagement.
As outdoor sports evolve into a lifestyle for Chinese consumers, both international and domestic brands have significant opportunities to capitalize on this dynamic and rapidly growing market.
[Disclaimer]: The above content reflects analysis of publicly available information, expert insights, and BCC research. It does not constitute investment advice. BCC is not responsible for any losses resulting from reliance on the views expressed herein. Investors should exercise caution.