China’s fitness equipment suppliers are taking diverse steps to survive another challenging year. Since Global Sources’ last coverage of the industry in September 2008, several companies have noted a weakening in external demand amid the financial turmoil that has hit North America and other key markets. Additionally, tightened consumer spending has shifted their sales mix toward lower-priced models.
Nonetheless, revenue from shipments of gymnasium, general physical exercise, gymnastics and athletics equipment remained on a growth track last year. Export sales rose 16 percent to reach nearly $3 billion, buoyed primarily by the higher value of units shipped overseas.
For 2009, the industry’s outlook is generally positive, despite a year-on year decline of 21 percent in export revenue during the first quarter. A number of companies are even expecting growth to exceed 20 percent.
Part of this optimism stems from the fact that participation in fitness activities remains high in the US and other traditional markets. Further, the trend for healthy lifestyles is gaining strength in emerging economies.
To take advantage of this opportunity, and at the same time mitigate the effects of the economic slowdown on sales, many suppliers have cut prices in the past few months. Adjustments have generally been limited to within a 10 percent range, however, since margins in most lines remain slim. In coming months, a number of companies intend to keep their quotes stable or implement further cuts. Maintaining competitive prices may prove to be a challenge for many, however, with certain raw material costs showing signs of increasing.
Amid this business climate, the following are some of the key trends we see in China’s fitness equipment industry:
• To lessen the effects of raw material cost increases on price and margins, suppliers will continue to trim overhead and production expenses through measures such as streamlining and reducing product defects.
• In terms of product development, models with smaller footprints are scheduled for release. Additionally, suppliers will continue to highlight multifunctionality, safety and ergonomics in their designs to avoid competing solely on price.
• Some companies will shift from low-value lines such as mini steppers to treadmills and other products with higher technological content.
• North America, the EU and the Asia-Pacific region will remain key markets, but shipments to emerging economies in Africa, the Middle East, South America and Eastern Europe are expected to increase. Suppliers with known brands will also strengthen their position within China.
The above is extracted from the Executive Summary of China Sourcing Report: Fitness Equipment
To learn more about this report, visit: http://www.chinasourcingreports.com/csr/fitness-equipment
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