Fast-growing sports industry offers a new dynamic for development and prosperity

Editor's note: Tang Jie is a researcher at the Chinese Academy of International Trade and Economic Cooperation, under the Chinese Ministry of Commerce. The article reflects the author's opinions and not necessarily the views of CGTN. 

As quality of life has improved, residents' sports consumption behavior has evolved significantly. According to the Global Sports Industry Statistics market data by Statista, the global sports market size is expected to reach $796.8 billion by 2025, up from $471.3 billion in 2018. And the e-sports market is projected to grow to $1.8 billion by 2024, reflecting a compound annual growth rate (CAGR) of 20.7 percent from 2019. Furthermore, The fitness industry continues to reach new heights thanks to demand broadening across demographics, modalities and business models. Furthermore, The International Health, Racquet & Sports Club Association (IHRSA) reported that the global fitness industry is projected to hit $115.6 billion by 2026.

As far as the situation in China is concerned, the total output of China's sports industry reached 3.3 trillion yuan in 2022, an increase of 5.9 percent year-on-year, according to data released by the Department of Sports Economy of the General Administration of Sport of China. The added value of the sports service industry was 918 billion yuan, accounting for 70.1 percent of the added value of the sports industry, while the added value of the manufacturing of sporting goods and related products was 368.6 billion yuan, accounting for 28.2 percent, and the added value of the construction of sports venues and facilities was 22.6 billion yuan, accounting for 1.7 percent.

The growth rate of the total size and value added of the sports industry is much higher than that of GDP in the same period, showing huge market potential and space. Between 2015 and 2019, the size of the sports industry increased from 1.71 trillion yuan to 2.95 trillion yuan, with an average annual growth rate of 14.6 percent. These figures reflect the rapid development and market potential of China's sports industry, and also show the sports service industry and sporting goods manufacturing industry as the two pillars of the sports industry. With the improvement of national fitness awareness and the growth of sports consumption, it is expected that the sports industry will continue to maintain a good momentum of development.

Previously, sports consumption primarily involved the purchase of sports goods like equipment, apparel, and footwear. However, recent trends indicate a shift towards a broader range of sports services, including fitness and wellness services, digital and virtual sports services, etc. Fitness technology has unlocked new workout possibilities for consumers and revenue streams for innovative companies along the value chain.

For China, since 2022, the economic income of sports events has been further highlighted. For example, large-scale events such as the Winter Olympics, World University Games, and the Asian Games have given a significant boost to accommodation, catering and retail consumption. The achievements of the event-driven economy featuring the Winter Olympics as a bright spot for growth are also impressive. Encouraged by the Winter Olympics Games 2022, China's ice and snow tourism or consumption number reached 224 million people during the 2018 to 2019 ice and snow season, and the scale of output value reached 800 billion yuan.

The diversification of sports consumption unveils a massive potential that remains to be fully tapped. This potential can be harnessed through enhanced infrastructure including development of sports facilities, stadiums, and wellness centers, innovation in services, virtual reality (VR) experiences, and customized fitness programs, among others. Policy support from government initiatives also promotes physical activity and investment in sports education.

Sports consumption is increasingly recognized as a crucial driver of economic growth. It contributes to job creation, ranging from professional athletes to service providers. Major sports events attract international tourists, boosting local economies. Moreover, investment in fitness and wellness reduces healthcare costs and enhances productivity.

According to expert forecasts, China's sports industry is ushering in a new golden decade. By 2035, the sports industry is expected to become a pillar industry of the national economy, and its added value is expected to reach about 5 percent of the GNP. The improvement in the quality of life has significantly broadened the scope of sports consumption. This trend highlights the enormous potential for growth in the sports services sector, which can serve as a new engine for economic development. By fostering innovation, investing in infrastructure, and supporting policy measures, the full potential of sports consumption can be realized, driving sustained economic growth.