Luxury Slowdown vs. High-end Sportswear Thriving Momentum
Sandalwood China Payment and Online Data^ reflect that Chinese spending in Luxury sector overall started to slow down after CNY in 2024 and remained weak until 4Q24 QTD (up to Nov 21, 2024), while High-end Sportswear (price band >1k) maintained double-digit YoY sales growth since 4Q23 up to 4Q24 QTD, showing consumption has been partly flowing from Luxury sector to High-end sportswear brands, likely due to:
- Growing Interest in Outdoor Activities and Health Consciousness
The post-pandemic era has seen a significant increase in outdoor activities as consumers prioritize health and wellness, driving demand for high-quality, functional apparel that supports active lifestyles, making high-end sportswear a preferred choice.
- Economic Considerations and Value Perception
Amid economic uncertainty and rising prices for luxury goods, consumers are becoming more price-sensitive. High-end sportswear offers comparable quality at more accessible price points, leading consumers to view these products as alternative and better self-investments.
- Cultural Shift Towards Experiences and Lifestyle Choices
Consumers are increasingly prioritizing experiences over material possessions, focusing on lifestyle choices that reflect their values and personality. High-end sportswear aligns with this trend by facilitating outdoor experiences while allowing for personal expression.
- Preference for Dynamic and Energetic Brands
Consumers especially young generation are gravitating towards brands that embody vitality and energy, resonating with their vibrant lifestyles, where high-end sportswear brands suit well.
^Luxury sector here includes Chinese spending at Capri, Hermes, Hugo Boss, Kering, LVMH ex-Sephora, Prada, Richemont, Moncler, Swatch ex-Hengdeli, Tods, Chanel, Burberry, Canada Goose, Tapestry, with China Payment + Tmall + JD data up to Nov 21, 2024.
High-end Sportswear here includes Sportswear goods sales with price band above 1k, with Tmall + JD + Douyin data up to Nov 21, 2024.
High-end Sportswear Competition
Sandalwood China Online Data* shows, different price bands reflect various market share dynamics. Camel gained the most in low price band (1-2k), Arc’teryx gained in all price bands even including the highest one (>5k), Descente, Kolon, and Lululemon and Salomon gained shares in price bands both above 2k and 3k.
Moncler maintained stable market share despite tough competition from high-end sportswear brands, likely thanks to its unique and innovative fashion design, high functionality, successful marketing strategies and accumulated costumer base through 2023.
However, Canada Goose, The North Face and Columbia have been losing shares in all price bands to high-end sportswear brands especially Arc’teryx, likely because the popularity decreased due to fashion design/brand image/marketing strategies.
High-End Down Jacket Competition
Sandalwood China Online Data* shows, among lower price band (<5k) SKUs, the market share of Luxury brands (Moncler and Canada Goose) has not been significantly affected, while the competition among others is fierce, with Guvet, Camel, Tamboer gaining share for price band of 1-3k, and Bosideng outperformed for price band above 2k and 3k. For higher price band (>5k) SKUs, Moncler maintained strength while Canada Goose lost share.
High-end Down Jacket/Sportswear Sales Value Share by Group Tiers
Sandalwood China Online Data* shows, like other sectors including cosmetics, Premium group (2-5k) lost market share in 4Q24 QTD to Mass Market group (1-2k) and Luxury group (>5k) compared to last year, likely because (1) consumers who prioritize value-driven purchases became increasingly price-sensitive amid ongoing economic uncertainty, hence prefer Mass Market group considering similar quality vs. Premium group, and (2) consumers aiming for superior quality and style prefer Luxury group offering products with high performance with fashion-forward designs.
*China Online Data here includes Tmall + JD + Douyin data up to Nov 21, 2024.
Sandalwood China Online data closely tracks broad sectors including apparel and sportswear company sales, with granularity down to the sector, category, company, brand, and sub-brand/series. If you are interested, please contact service@sandalwoodadvisors.com.
