China’s sports equipment industry is adopting a cautious stance for the rest of 2009 through 2010. While anticipating that business will improve as economic conditions get better, suppliers are actively stimulating demand to boost sales and reduce risk. Many are also taking this opportunity to veer away from price competition and enhance long-term competitiveness.
China customs statistics for the first half of 2009 show total exports down 37 percent year on year. Revenue also fell, by more than 25 percent, as many suppliers maintained or scaled back prices to attract orders. While there were companies that did raise their quotes, most kept adjustments minimal.
Some categories, however,remained on a growth track. Rackets were among the gainers, with shipment volume rising 4 percent and value, 5 percent.
Exports of golf equipment were the worst hit during the first half of 2009,with revenue and volume falling 21 and 19 percent, respectively. The line remained a major export category,however, accounting for over 20 percent of sales.In coming months, expecting raw material costs to be relatively stable, a number companies will maintain the quotes of existing models to encourage repeat and additional orders.
In line with this strategy, several are investing in advanced machinery to streamline operations, cut labor costs and reduce losses from production wastage anddefects. Many are also reducing promotional expenses.
The following are some of the other key developments we see in China’s sports equipment industry:
• Product differentiation will increase as suppliers try to gain better margins. Efforts to innovate are also in line with plans to boost market recognition of in-house brands.
• At most companies, R&D endeavors will revolve around the creation of more user-friendly designs. Enhanced visual appeal, durability and functionality are also expected from new releases.
• Additionally, many are responding to heightened safety and environmental concerns, especially those backed by product standards in major markets. Those targeting the US, for instance, are opting for phthalate-free materials to comply with the Consumer Product Safety Improvement Act of 2008.
• Export sales are expected to growat double-digit rates in coming monthsas pricing and differentiation strategies, accompanied by economic recovery, stimulate demand.
The above is extracted from the Executive Summary of China Sourcing Report: Sports Equipment
To learn more about this report, visit: http://www.chinasourcingreports.com/csr/sports-equipment
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