China’s fitness market will surpass the West’s in no time - Insights from Luxe.co Global Fashion Innovation and Investment Forum 2018

Brands have started to realise the potential of China’s fitness market. Compared with Western countries, where the fitness market has been developing for decades, China’s fitness industry is still at an early stage, especially considering the proportion of fitness lovers among the general population, as well as people’s understanding of sports and fitness. However, China is quickly passing the initial stage and catching up with the Western world, especially in terms of the market potential.

At the roundtable discussion, "The Prospects for Sports Fashion in China" from Luxe.Co Global Fashion Innovation and Investment Forum (LGFIIF)“华丽志全球时尚创新与投资论坛”, Xi Wang, Co-founder and COO of RESHAPE, shared her opinion.

Luxe.Co also invited two other outstanding entrepreneurs for this roundtable, QING CAO（曹青，之间文化创始人 & 《明星健身房》制作人）, Founder of MoCreative and Producer of Moving Gym and Shuting Liu, Founder of SUPERMONKEY（刘舒婷，超级猩猩联合创始人）. Claire Shen, Head of Research at Luxe.CO, hosted this discussion.

WHO IS XI WANG?

RESHAPE is an online shopping website that offers its users the best sports fashion products from around the world. The wide selection of international designer brands on offer provides a one-stop shopping experience for sports fashion lovers. So far, RESHAPE has incubated and managed around 30 sports brands. Xi Wang（王曦，重塑联合创始人 & COO）is an Orange Bay University alumnus.

01

Reasons for choosing the industry

Claire Shen: What made you decide to get into the fitness industry?

Xi Wang: We entered the fitness market due to the passion for fitness that my co-founder and I have. My co-founder has been a bodybuilder for 10 years. We were clear about our goals when we first started our business – we just wanted to be in the fitness industry, regardless of how large or small the opportunity was. We’ve never thought about doing anything else.

Initially, we opened a chain of boutique gyms. This experience made us realise that our target customer for our next business would be Chinese women with a mid to high level of income, among whom there was a huge demand for high-quality and niche sportswear that no one else was wearing. We had the idea of importing designer sports fashion brands to China. That’s how RESHAPE was born.

02

China’s Sports Fashion Market is Maturing

Claire Shen: Could you share with us your experience of the scale of this industry, which will help us to answer the question: how popular is fitness currently in China? Could its popularity be over-estimated?

Xi Wang: As our company provides a sales channel for brands, I’d like to talk about the situation of China’s fitness industry. Compared to the Western fitness market, which has been developing for many years, China’s fitness industry, which has some very specific Chinese characteristics, is still just emerging. China’s sports trend has come as a result of the upgraded consumer market, the impact of social media and the development of ecommerce.

I believe that China’s fitness market will rapidly move beyond the initial stage and will surpass the West’s in no time. We are working with a sportswear brand whose Chinese market represented less than 1% of its global market. Since they’ve started working with us, China’s share in its market has increased to 67% and has become the biggest single market for the brand. The brand has had to adjust its production line and change its designs to suit the Chinese market better.

This is not an isolated example. From our observation of brands, all sports brands have realised the potential of the Chinese fitness market. Fitness isn’t a trend, but a lifestyle. Once the lifestyle has been adopted, it cannot be unembraced, but will gradually mature. Consumers will demand higher-quality and more professional products. I believe that fitness is an everlasting market.

03

How do sports and fitness brands gain customers?

Claire Shen: Your customers are fitness lovers. What are their characteristics? What experiences can you share regarding gaining customers?

Xi Wang: I really agree with what Ms Qing Cao said about businesses needing to stay true to their quality. RESHAPE is a low-key brand, but has achieved significant growth. Why? The most important factor is the high quality of our products; promotion comes second. What’s the key to finding good-quality products? Strong customer insights. In recent years there has been a worldwide trend for fitness, which means that new designer sportswear brands and fitness classes are being born every day, but only a small proportion of them will meet consumers’ expectations. If we are able to find these companies, the most discerning customer group will come to us for products and services, meaning that we can create a word-of-mouth promotion mechanism.

Secondly, promotion needs to be highly targeted. RESHAPE mainly provides niche and premium designer brands, which is why we don’t target the general public. We only promote our products to professional athletes, influencers that enjoy keeping fit, celebrity personal trainers and boutique gyms. These groups represent the brand image of RESHAPE, which is niche, high-quality and genuine. As China’s consumption habit is developing so fast, the market is changing rapidly too. This is why advertising isn’t that helpful anymore in terms of making people purchase. They trust what their friends like or their personal trainers recommend.

These are the two ways in which we gain customers. We aren’t just gaining new customers quickly, but also have a high retention rate. The repurchasing rate for the whole of RESHAPE is more than 50%.

04

Core Competences

Clair Shen: All of you have entered this market quite early on and have created new business models. However, there is no high threshold to copy these models, so high competition in the future can be expected. What do you think are your core competences?

Xi Wang: From the beginning, RESHAPE wasn’t a brand that followed the stunt-based business model. We are a retailer. My understanding of the core of retail is to provide products and services. All the greatest retail companies have one simple business model, which is to provide services and products of extremely high quality.

Talking of our core competence, I think it’s our determination to pursue the same level of quality. Because we are fitness lovers ourselves, we love the industry. We will be persistent in working in the fitness industry, regardless of how well the industry is doing.

We need to create our own barrier to competition, which is having the reputation of being the best in the industry. For example, when you want to buy a mobile phone, you think of Apple as the best. When you want to eat sushi, you think of Jiro Ono as the best. When you want to buy professional and niche sports products, if you think of RESHAPE, then we’ve created our own barrier.

I’m also thinking, we’ve been in this business for three years; why is no one else doing it as well as us? I think it’s because we really understand our customers and are really happy to reduce our profit and sell at a lower price just to benefit our customers. Unlike fast fashion, if your sportswear doesn’t fit, it affects your performance. If you don’t have a warehouse in China and don’t provide good customer service, how can your customers exchange the products they’ve bought? That was the starting point for RESHAPE, and it has given our brand a place in people’s hearts. This is our barrier.