The Impact of COVID-19 - skinny
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The Impact of
COVID-19
on Sports &
Fitness in China
skinny
Key Observations
S P O R T & F I T N E S S I N C H I N A T O D AY
• Since the outbreak consumers increasingly pursue a healthier lifestyle at home – explosive
growth in fitness home equipment & online fitness classes; look at sports at home as a way of
staying in shape, strengthening will and relieving stress during trying times
• Recreation sports centers & gyms have reopened in most provinces – still subject to strict
regulations e.g. wearing masks during workout: among most re-opened centers are gyms,
basketball & badminton courts as well as square dance gatherings
• Sports retail still driven by online sales – major brands have focused around online activation
particularly livestreaming and social commerce; significance of smaller outlets grew as well
as consumers are still reluctant to visit major malls & stores
• Sports leagues continue to be on hold – Government reissued a statement not to start any
major sport leagues before May; CBA (basketball) among the most active to work out a
proposal to start the Basketball season
• eSports currently the only viewable form of sports entertainment – Some domestic
eSport leagues setting all time records in viewership
• Current consumption of fitness & health suggests healthy growth moving forward
– expect current short-term behavior to evolve into more sporting event
participation inline with current growth trajectory pre COVID-19
(see slide 4 for China’s sport landscape pre-outbreak)
Tre n d i n g K e y w o rd s
FEBRUARY – APRIL 2020
KEYWORD(S) INTERPRETATION TAKEAWAY
• Keep has been the clear winner among fitness apps increasing their DAU Platforms offering online fitness classes for consumers to follow at
(Daily Active Users) almost threefold to 6 million a day in March home has been by far the biggest trend coming out of the virus
Keep • On Weibo the hashtag #StayAtHomeHealthyExercisePlan gathered over outbreak. While Keep is the frontrunner, there are several platforms
1.96 billion views, to which Keep users have contributed to among other that have significantly grown their followership and provide
fitness platforms opportunities to partner with
• As situation stabilizes consumers are increasingly getting involved in
Though heavily restricted in number of participants and having to
outdoor sports again
Outdoor Sports wear facemasks throughout the exercises, consumers are returning
• Recent survey in T1 & T2 communities suggests 29.7% to increase their
to their exercise routines. Particularly gyms, but basketball &
outdoor sports activity over the coming weeks
badminton courts are likely to resume normal operation soon
• Several recreation centers have reopened their doors to the public
• Top three searched keyword overall on Taobao & Tmall throughout the Gamification to grasp consumers’ attention has been a steady trend
Gaming outbreak in China over recent years with esports being no exception. The
• Games such as Nintendo’s Ring Fit Adventures sold out with secondhand entertainment factor grew even more in importance during self
sales prices increasing from ¥600 to ¥2000 isolation time
• Has been a hot topic across a variety of industries especially during times Still one of the top trending keywords, however expected to decrease
Stress Relief
of self isolation with fitness & sports related content common with consumers resuming normal routines
• By far the number 1 selling home fitness equipment on major ecommerce
Consumers increasingly searched for equipment-free work out
Yoga Mats platforms
routines, however still a necessity for yoga mates to execute those
• Fifth most searched keyword on Taobao overall in month of February
Sports Leagues Still On Hold
Pre-outbreak Current Situation
• Basketball is the most popular sport in China with 300m NBA • On 10th April the Government issued a statement postponing all major sports
fans (US$5 billion business in China) and CBA league among leagues with a potential start in May earliest. Arenas are open to the general
the most watched domestic basketball leagues in the world public and are currently being used mainly for basketball, badminton and ping
outside of US pong
• President Xi is an avid supporter of football with big plans to turn • Restrictions do not affect eSports leagues as long as matches are played in
China into a football superpower by 2050. The aim for 2020 is isolation or in dedicated training centres
to have 30m kids play, 20k new academies & 70k pitches
• Chinese Basketball Association (CBA) was pushing a proposal to hold a one-
• Spurred by preparation for Beijing Winter Olympics 2022, the month tournament in two selected cities (10 teams per city) with no fans in the
number of ski resorts visitors tripled from 5.5m in 2009 to 15.1m arena. Likely to be the first league to reopen as CBA President Yao Ming and
in 2016 the Government Sports Bureau are closely working together to relaunch
basketball in China
• The running boom has hit China steadily increasing in
participants and races held with numbers of participants at • Work has started on new $1.7 billion lotus flower-shaped football stadium for
major running events expanding from 2.8m in 2016 to over 10m Guangzhou Evergrande expected to be ready by the end of 2022. Once
in 2020 completed it would be the largest football stadium in the world. Plans to build
another 3-5 more stadiums across the country with capacities of 80-100,000
• China is set to take over Korea as second biggest eSports have been announced to gear up for a bid at hosting its first World Cup by
market behind the US. eSports related majors are now available 2036.
at several colleges across the country
• There has been talk from other leagues to move its teams to China to finish the
season. Most prominently the English Premier League is currently discussing
this as an option to hold the final 9 games of the season in the Middle
Kingdom. However, some team owners are calling the idea outrageous and
are expecting to turn this option down should it come to a vote.
D e v e l o p m e n t s i n S p o r t s Te c h
• Since the outbreak developments in sports tech looked
to cater towards people increasingly staying at home
• Apps such as Alibaba’s Le Power (乐动力) provide users
with fitness classes that do not require any equipment
while scanning their performance and providing real time Fiture’s fitness mirrors received increase
feedback all free of charge exposure since the outbreak as their product
tailored to consumers increasingly staying at
• In 2019 the Chengdu based Fiture rolled out its fitness home
mirrors. The mirrors are installed in consumers’ home,
offer a variety of personalized classes, track
performances and enables to connect with other users
and workout together.
• In regards to fan engagements, China still clearly lacks
behind the US of getting fans involved in professional
sports leagues. American Football leagues such as the
FCFL and YCF have already kicked off in the US which
enable fans to vote for the type of plays their team
should execute next. Teams are further run by popular
sports and lifestyle KOLs to gain consumers attention
and interest in the sport. While such leagues haven’t
been implemented in China yet this may be an indicator
of what the future holds. The US is the front runner in involving fans in the
Alibaba’s Le Power offers
fan experience. Interactive leagues such as the
consumers a free way to stay fit
FCFL and YCF may be what the future holds in
at home with no fitness
China
equipment required
K E Y TA K E A W AY F O R T I Q
A c c e l e r a t i n g D i g i t a l E ff o r t s With fitness app membership exploding during the COVID-19 crisis, fitness
and sport remain at the forefront of consumer thinking. Given the pre-
COVID-19 trajectory trending upwards, it would be safe to assume that this
F I T N E S S A P P S AT T H E F O R E F R O N T sharp boost in online sports and fitness participation is likely to leave a
permanent mark on consumer behavior. This may extend beyond simple
• Fitness apps were among the first to tackle the increasing need of people staying training gear to include the establishment of home theatres for both
at home but wanting to stay physically and mentally fit watching and participating in sport, virtual reality solutions for increased
• New video and livestreaming classes were uploaded within days for people to cabin fever etc.
train at home, none more successful than Keep reaching over 6 million DAUs
(Daily Active Users) at its peak
• Not just fitness apps but offline gyms also got involved in offering livestream
NIKE INCREASINGLY PUSHING DIGITAL
classes which is expected to continue moving forward
DAUs for Sports and Fitness APPs (millions) • Nike was able to offset much of its
lost retail sales through pushing its
Since the outbreak fitness digital channels resulting in 36%
platform Keep nearly tripled its 89.28 M increase compared to last quarter’s
Daily Active Users from 2.2m digital sales
(Jan 28th) to 6.0m (Mar 3rd)
• Utilizing its own channels from NTC
app, to WeChat Mini Program, Nike
swiftly updated new training courses
to be done at home
Gym program provider LesMills immediately saw • Further utilized other channels such
the potential in expanding digitally (see slide 6) as Douyin and Tencent Live to push
content
46.18 M
• Campaigns pushing social commerce
2019 2020 have been implemented working with
popular KOLs and KOCs in the
process attracting reaching over 25
Over the past year Sports and Fitness Apps in China
million RMB in sales (slide 7 for more
grew 93.3% in daily active users
details social commerce)
CASE STUDY
Les Mills International works with 140,000 fitness instructors Les Mills provides us a
and 20,000 clubs worldwide to deliver "the world's best valuable lesson for not
just for succeeding in
workouts" and had been experiencing strong growth in China
times of crisis, but also
on the back of the fitness boom. Yet when China went into taking time to explore
COVID-19 lock-down, the gym industry was one of the hardest other marketing, sales
hit. and training channels.
The outbreak provided an opportunity for Les Mills to accelerate Gyms are now starting to
open again in China,
their digital initiatives:
although it will be some
time before they are back
• Launching an online training program which was streamed to the crowded hives of
to 2,800 instructors in one session. Lower costs to serve activity that they were
led to profits being 2.5 times higher. before the outbreak.
Nevertheless, Les Mills is
• Creating a WeChat Mini Program with fitness-related
likely to emerge stronger
content and free workouts, including exercises for children. than it was before, with
complementary digital
• Offering paid live-streaming classes, which marks Les Mills' channels, more profitable
first foray into the direct to consumer (D2C) model. systems and new
avenues to grow their
revenue and customer-
• Discussing partnership models with Alibaba, which includes base.
providing content on DingTalk, a popular productivity app.
S o c i a l C o m m e rc e TA K E A W AY S
The New Norm in China • Social commerce is seen as the next key area for growth,
meaning that business must prepare their grassroots networks
• Trending well before the COVID-19 outbreak, now for a country setting the wheels back in motion.
several brands have put increased emphasis • Traditional retail models are challenged by KOLs, KOCs, live-
towards social commerce as result of temporary streaming, social activations, content sharing and referral
store closures selling. Covering these channels will be key.
• Young consumers, particularly those born after the 1990, are
• With several social platforms now integrating the key consumer group shopping on social commerce
ecommerce components campaigns range platforms.
from WeChat Mini Programs, Taobao, Douyin,
XHS to fitness specific platforms among many
others
• Commonly brands collaborating with KOLs (Key Wanda Nanshang Plaza in
Guangdong collaborating with
Opinion Leaders) with a large following has
LiNing to host livestreaming
been the norm but recent trends particularly in campaign on Douyin
the beauty category have seen greater use of
grassroot KOLs and KOCs (Key Opinion
Consumers) with smaller followings considered Adidas Tmall Super
as more trustworthy Brand Day promoting
each 50th anniversary
• Social commerce is an eCommerce function collection with KOLs
that leverages the individual in the sales Weiya, Jeffery Dong and
Angel Chen promoting
process. According to China Internet Research,
the line through their
social commerce will be worth in excess of social channels and
¥2.86 trillion in 2021, up from ¥6.27 billion in Taobao livestreaming
2018. Since this figure was predicted before the event
quarantine economy (隔离经济), the actual
outcome is likely to be even higher.
Slow Return to Normal Mini Case Study: Supermonkey
Sport Centres and Gyms reopen • The gym chain Supermonkey was the first to reopen
their doors and offer classes
• As with other recreational facilities it is mandatory to
• Since mid March gyms and wear a facemask throughout the workout and keep a
recreational centres have distance of 1.5m from other people
gradually reopened for the
general public • As other gym chains, Supermonkey offered online video
courses which they currently still upload although they
• Restrictions are currently still have since resumed full operation
in place with several venues
requiring WeChat or phone
registration to reduce visitor
K E Y TA K E A W AY F O R T I Q
flows mainly to basketball
and badminton courts
• Despite physical locations reopening, COVID-19 has
had such as strong influence on consumer behaviour
• Facilities have to execute that consumers are likely to remain attached to their
mandatory temperature The program Suishenma online alternatives, if not permanently, then for the
measurements of every tracks every WeChat and foreseeable future.
visitor and check their health Alipay users steps in
code on their phone which China to determine • Virus and contact tracing are likely to remain prominent
indicates if that person has whether they have post-COVID-19, meaning that all services and offering
travelled in the past 2 weeks accessed or been must take this extra step into account. Mitigating the
exposed to any infected encumbrance of this step will help retain customers.
• Swimming pools reopened in areas or people. Without
the beginning of April and are a green QR it is currently • Online or virtual offerings that remove the contact
currently restricted to 3 not possible to enter any tracing step will also be a product bonus.
swimmers per lane facilities in China
Situation
C a s e S t uSummary
dies: CBA & eSports
CBA
• CBA currently among the most likely leagues to resume play, likely without fans in the stands
• Fans could get access to the games through Tencent Live or CCTV5 broadcasts
• Current proposal is to split the 20-team league into half with 10 teams playing each other in one city and the
other 10 playing in a different city with both arenas not accessible by fans
• The CBA further planned to house their players in quarantined hotels and perform regular temperature
TAKEAWAY
checks per day. However, this strategy wouldn’t be effective with asymptomatic players
• China likely to be one of the first
• Initially expected to resume play in early April with the league ordering all its US players to enter countries to resume holding sport
China within a week otherwise would be banned to play in the CBA in the future events
• Consumer sentiment online still
cautions, potentially holding Premier
League games here was met with
mixed opinions as consumers are still
eSports cautious of potential second wave
hitting
• Leagues likely to start out without
• The two biggest domestic eSport leagues in LPL (League of Legends Pro League)
and KPL (King Pro League) resumed play on March 9th and 18th respectively fans in arenas/stadiums which puts
even great emphasis on the
• Usually played in stadiums in front of tens of thousands of fans, teams were now importance of livestreaming
forced to play from their training centers with fans tuning in via livestream
platforms such as Hua, Tencent, Kuaishou and Douyu
• Since relaunching KPL set a new record views with the official game app
alone registering 6.89m viewers not considering the many supporting
platforms that reached well over 1m+ as wellA F L F ro m A C h i n e s e E x p a n s i o n P e r s p e c t i v e
An extension of Australian Sports & Culture to China:
• AFL started to host regular season games in Shanghai since 2017, has since enjoyed regular spikes
in exposure particularly leading up the game, however, nowhere near other leagues such as the
NBA or CBA. This year's game scheduled for late May has been cancelled due to the virus
outbreak
• AFL has a clear disadvantage for not being a global sport, requires to take offer beyond sports. It is
looking to tie in efforts with brands, partners and initiatives to tackle health and wellbeing inline
with China’s 2030 Health action plan to appeal to audiences
• The AFL is aiming to grow the sport through bringing youngsters to play the game with
previous campaigns targeting 15 Chinese schools to explain and play the game.
Currently efforts have been concentrated mainly among T1 cities in Shanghai,
Beijing, Guangzhou and Shenzhen where the majority of AFL related searches
is taking place.
TAKEAWAY
Conversation with Tom Parker: AFL Head of China • Potential to grow a digital presence as fan platforms are struggling to put out
content
“We want AFL to be an evocation of Brand Australia” • Platform such as Hupu traditionally associated with Basketball has pushed a
variety of content from other leagues and sports to keep users entertained
Having to cancel the annual league game in Shanghai (late May) was a big hit. • With missing out on hosting a game in China in 2020, the league should
Not only is it the only physical showcase in China, but it acts as a connector look towards a stronger digital presence, pushing the health and wellbeing
for all things Australian. The government-led Festival of Australia and component in the process
hundreds of Australian exporters engage China around the event and • Potentially could look to partner with a popular Australian brand (e.g.
demonstrate what Australia has to offer. Devondale, Bio Island) as it could tie in with health/fitness component with
brands benefiting from the sport boom as well.B u i l d i n g Aw a re n e s s With COVID-19 having vastly changed the consumer behaviour landscape and an even greater
emphasis on online products and services, it is important to re-evaluate how you build awareness
Approach for the next 2-3 months and reach out to related consumer groups
Interest Groups
Health
PARTNERSHIPS Brands
Wellness HEALTH
2 EVENTS
1 ENGAGE ONLINE Australian Fitness As it currently stands there
Brands
Brands must first engage with will not be any events or
the most likely interest groups major gatherings held in the
Engage coming month. Sports
or target markets. As the
current situation stands, the leagues likely to resume play
OFFICIAL will do so without fans in the
most likely routes to market stands, putting even greater
are through leveraging Co-branding BRAND Engage Sport
emphasis towards
partnerships with Australian ACCOUNT livestreaming sports. Sports
health related brands as well Management providers
as expanding the digital should be upskilling on
component to engage with commonly used platforms
consumers keeping the such as Tencent Live, Hupu,
overall trending health theme Gadgets & Gear Live Events PP… for content hungry
in mind consumers will be essential
to grow a followership
TECHNOLOGY Video content Livestreaming EVENTS
Social CommerceLET’S CHAT 631 Jiangning Road, Suite 9B Jing’an, Shanghai, China chinaskinny.com info@chinaskinny.com
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