The truth of China's sports industry's

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Just as the Tokyo Olympic Games was coming to an end, the State Council issued the national fitness plan (2021-2025) (hereinafter referred to as the "plan"). For a moment, sports concept stocks in the A-share and Hong Kong stock markets began to turn upside down again, but soon calmed down.
Some sports practitioners smell a breath similar to Article 46. Can an article really solve the problem? How much can the 14 points put forward in the article be implemented? This is really unknown. However, we sports practitioners must have a rational view of the development of the sports market and establish a scientific cognition.

Yiwen / Su
Editor / Luo Da, Yin Haonan
The picture comes fromWANG Zhao AFP


Many people said that the sports industry is very large. We can often see the words "trillion consumption blue ocean" and "300 million people on ice and snow". This plan also mentioned again that "drive the total scale of the national sports industry to reach 5 trillion yuan".


Even so, why does the capital industry shake its head when talking about sports in such a large sports industry, basically saying "does the sports industry make money" or "how does the sports industry exit"?


About how to quit, we wrote an article to discuss before.Today, we want to talk about a more basic topic——What is the market size of the five trillion yuan sports industry? For the market and capital, where is the space and Prospect of the industry?


It should be mentioned that the proposal and implementation of this column is also a learning process about the theme of this article. We welcome more discussions.



01

Clarify a concept


Before starting all discussions, one of the most basic concepts must be reviewed - the total industrial scale is not what we commonly call market space. In the relevant data of the National Bureau of statistics, we can see two concepts: "total output of sports industry" and "added value of sports industry".


With regard to these two concepts, the standard is defined as follows:


1、 The total output of sports industry refers to the value of all sports goods and services produced by all permanent residents of a country in a certain period of time.


2、 The added value of sports industry refers to the added value created by the production activities of sports industry in a certain period of time by all permanent resident units of a country.


Both descriptions are a bit awkward. In fact, generally speaking, the total output of the sports industry refers to the "aggregate" value of all outputs in the sports industry. Therefore, this value is subject to a large number of repeated calculations.


The "added value" of the sports industry more truly reflects the consumption capacity of products and services. It is a calculation method in the form of final products. This concept corresponds to gross domestic product (GDP).


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Take a vivid example of these two concepts.


For example, a supplier of raw and auxiliary materials of sports clothing shipped 10 million yuan to a sports brand. After the manufacturer processed into ready-made clothes, it sold them to the dealer for 20 million yuan, and the dealer retailed them for 25 million yuan. At this time, the turnover of the three business units was counted as part of the total output, so the total output of these clothes was 55 million yuan.


However, if the added value is calculated, the final product delivery is taken as the calculated value, so the added value is 25 million yuan.


In fact, the added value of China's sports industry is about 1 trillion yuan (1124.8 billion in 2019), accounting for about 1.13% of GDP.




02
Watch the four tracks



1.13%, is this a large proportion?Just look at other industries——



In terms of the corresponding added value of GDP, although the proportion of sports industry is not high, it seems to be almost the same as catering and it industries. Is the sports industry really so powerful? But intuition clearly tells us that in the real market performance, these hot industries seem to be different from sports. Why?


Let's take a look at what is included in this "added value":



First, the largest categories - "manufacturing of sporting goods and related products" and "sales, trade agency and rental of sporting goods and related products".


According to the concept of "final product" emphasized in the definition of added value, sporting goods produced and sold in the Chinese market can only be finally counted in the retail link, that is, "sell goods". These values will be included in the item of "sales, trade agency and rental of sporting goods and related products" in the table, and there is a data of 342.1 billion "manufacturing of sporting goods and related products", The corresponding is China's sporting goods exported to the world.


Second, the rapidly rising "sports training and education".


In 2017, the added value of the sports training and education industry was only 26.6 billion, but it quickly jumped to 142.5 billion in 2018. There may be changes in the market. However, at the same time, we also consulted the comparison of changes in 2015 and 2019 in the statistical classification of sports industry,It is found that 2019 has clearly incorporated school physical education into this category, which may include the part of schools purchasing educational services, which was originally placed in the statistics of the education industry.


Third, "sports management activities" have plummeted.


The specific contents of this item include "sports social affairs management activities", "sports social organization management activities" and "sports security organization management activities". The main sports social activities in China are basically completed by the government's sports management department, which decreased from 266.2 billion in 2017 to 39 billion in 2018.


Fourth, there are two categories of sports venues industry, namely sports venues services (sports venues and facilities management) and sports venues and facilities construction.


Among them, the venue service sector mainly covers "sports venue management", "sports service complex management" and "Sports Park and other sports venues and facilities management".


With the development of commercial complex, sports has become a major external form of commercial complex. Coupled with the increase of large-scale events in recent years, it can be seen that the industries related to sports venues are growing at a rate of about 20% per year; The output value of "sports facilities construction" is actually divided up by the traditional construction industry.


Picture from olympics.com


To sum up, after reviewing the basic concepts and analyzing each track one by one, we will find a fact——If the market scale we usually discuss is a value that can be created by all operating units in the form of market. Then, we need to deduct the "added value of statistical caliber" from the "output value of final products that cannot be shared by social capital", and the final figure can be infinitely close to the "market space of sports industry".




03
Find a direction

From the above analysis, we can see that we can't get the details of some statistical data temporarily, so we can't make arbitrary decisions Let's return to a basic logic of the economy:

A country's economic behavior has a troika of "investment + consumption + export",In the sports industry, there are three major economic behaviors: sports investment, sports consumption and sports export.

Among them, sports investment (especially sports infrastructure investment) needs to pay attention to two points:


First, infrastructure investment is long-term, with low economic return and long cycle.

Second, there are many infrastructure investments that have no direct output.


For example, the construction of the fitness Greenway in the "plan" produces little consumption or direct economic output value on the greenway, that is, the investment has no output, at least there is no multiplier effect. This requires more scientific and systematic evaluation and treatment of these long-term infrastructure inputs.


Another important component is sports export. The final product is reflected in the foreign consumer market. What it can bring at home is, of course, the income value of foreign trade products.


For example, the famous international sportswear agent Shenzhou International, although these export manufacturers or distributors are also participants in the sports industry, they are not directly reflected in the domestic sports consumption market. In the new global economic development situation, we should focus on the internal cycle in the double cycle, so we will eliminate the export part from the sports consumption market.

Based on the above analysis, we might as well be bold and echo the title of the article——For most market operators, the market scale that can really be reflected in China's sports consumption market is indeed not as much as we think.


Nevertheless, according to our consistent attitude towards the sports industry, we should still be warm-hearted after seeing through the cold eye.


Pictures of bird's nest at night from AFP

In 2019, the market scale of Chinese TV dramas is 120 billion, film is 60 billion, and digital music is 60 billion. However, I always feel that these industries are chased by capital differently from the sports industry, and the popularity in the eyes of consumers is different. What is the difference?

A hundred flowers are in full bloom, but in fact, major cultural and entertainment industries such as film, television and music,There are giants or high concentration, but there are no leading enterprises such as American endeavor, AEG and fanatics in the sports consumer service industry.

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The improvement of concentration may depend on the development of professional sports, but what we should see is two real and growing trends.


On the one hand, it is the Chinese people's demand for a better life, including the demand for sports life. This market must be a positive upward trend, which is a market opportunity; In addition, with the state's attention to national fitness and the development of the whole sports industry, this is a policy opportunity.

With the continuous expansion of market scale, the real symbol of the rise of China's sports industry may be to seize the opportunity of market + policy and produce a number of leading enterprises through perfect market mechanism and healthy capital market.


By the end of 2020, the total scale of China's sports industry has exceeded three trillion yuan. The vision of five trillion yuan in 2025 is certainly exciting.At the same time, more real industrial opportunities belong to the distance of sports people.





Special author: Su Yi

Sports industry investors