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Junior Activity Sector Fragments as Entrants Offer Niche Experiences

The profitability of the mainland's children's sports and activity sector, together with the perceived lack of competition, has seen many companies look to make their own mark through a variety of new and novel experiential offerings.

Photo: On the way up: Rope climbing proves a hit with young mainlanders.
On the way up: Rope climbing proves a hit with young mainlanders.
Photo: On the way up: Rope climbing proves a hit with young mainlanders.
On the way up: Rope climbing proves a hit with young mainlanders.

Children's leisure and sports parks now represent a thriving sector across the mainland, typically attracting high visitor numbers and frequently being booked to capacity during school holidays. With many such facilities already proving highly profitable, though, the market looks to be fragmenting, with a number of new entrants to the sector keen to deliver niche offerings in order to win their share of this burgeoning business.

Overall, the junior sports market has enjoyed truly explosive growth on the mainland, largely thanks to new attitudes to helping children reach their full potential. Coupled with the rising demand for new experiences and challenges, this has seen a number of related businesses prosper across the sector.

Unsurprisingly, demand is particularly high during school holidays, with activities such as rock climbing and skiing proving an irresistible lure for many young mainlanders. Despite charging daily fees as high as Rmb1,000, many such activity sessions are regularly said to be fully booked during periods of peak demand.

Junior Outward-bound Sports Centres

In many of the mainland's first tier cities, children's gyms are already well established, with the phenomenon set to spread throughout the country. One of the most well-known companies in the sector had 150 gyms across 50 cities as of the end of 2015. This represented 50% growth over the previous year, with overall membership passing the 400,000 mark.

A number of sports and activities are proving particularly popular with the younger demographic, most notably bungee-jumping and trampolining, as well as scaling both rope ladder and spider towers. Fees vary somewhat, tending to be charged individually or offered on a discount basis for block bookings or long-term subscriptions. On average, a day pass costs around Rmb100, with 20-40% discounts available to enrolled members.

Most commonly, such facilities are to be found in the larger shopping malls, with a minimum six metres of ceiling clearance required in order to install the required equipment. Increasingly, it is common for such venues to be customised in order to super-serve a particular group or activity.

The smallest children's gyms tend to occupy some 30 to 40 square metres of floor space, giving them a capacity of 30 participants at a time. The larger gyms offer between 100-150 square metres of floor space, allowing them to provide a wider range of activities.

Photo: In demand: Junior sporting gear.
In demand: Junior sporting gear.
Photo: In demand: Junior sporting gear.
In demand: Junior sporting gear.

Most such outlets tend to be directly operated by the brand-owners rather than run on a franchise basis. This has largely been down to an unwillingness on the part of many companies to entrust their reputations – particularly with regards to safety – to third parties.

One large commercial centre in the west of Beijing is now home to four different children's gyms, with all of them seemingly operating to capacity. Overall, it is the more dynamic activities that are proving the most popular, with queues of up to 30 minutes for an indoor bungee jump that lasted less than five minutes.

Explaining the appeal of such centres, the mother of one four-year-old boy said: "These kind of activities are a real test of our kids' bravery. We have been here seven to eight times now, often coming when it is particularly smoggy outside. This place provides a real outlet for children, while also building their sporting skills."

At present, it is understood that many shopping centres are offering relatively low rents to operators of kid-friendly businesses. This is largely to ensure they can appeal to the whole family, while also providing a boost to their retail elements through the parental obligation to visit such sites.

Targetting Communities and Providing Adventures

For many operators, children's activity parks represent a relatively undeveloped sector, with the lack of competition seen as offering a real opportunity. In the case of one theme park operator, it made its first forays into the sector in a number of tier three cities. Initially, it worked to establish a good relationship with a number of the local communities as a way of boosting the uptake of places at its activity centre. Its strategy has proved a success, with children of all ages now making use the company's ecological-activity facilities.

The operators of these ecological amusement parks have sought to capitalise on the connections between their venues and the local natural environment. Creatively designed and furnished with a range of eco-friendly installations, the use of electrical and mechanical equipment is kept to a minimum.

In terms of exercise, the gyms encourage children to develop their physiques and coordination through such activities as running and climbing, with all of this conducted against a grass, sand or forest backdrop. This environment also gives children the opportunity to observe and interact with the animals, plants and natural phenomena around them.

Photo: Kid-friendly sporting equipment.
Kid-friendly sporting equipment.
Photo: Kid-friendly sporting equipment.
Kid-friendly sporting equipment.
Photo: A specialist junior sports supermarket.
A specialist junior sports supermarket.
Photo: A specialist junior sports supermarket.
A specialist junior sports supermarket.

In the larger cities, such as Beijing, land prices tend to be high, with the most viable opportunities for establishing large-scale children's sports centres lying well outside the central districts. In a Beijing suburb, some 50 km from the city centre, one operator has established a travel training base. Complete with a survival island experience, the centre focusses on delivering experiential education to attendees. In line with this, the centre's facilities include climbing ladders, downhill runs, shooting, ascending chains and wire walking.

It also offers a number of specialised activities aiming at boosting teenagers' ability to handle emergency situations. These include flues escape, over-the-wall getaways, bridge-construction, river-crossing and making rope ladders.

The centre currently charges Rmb240 for a child's daily pass. It also offers longer training courses, including summer camps. Typically, an eight-day, seven-night programme costs around Rmb1,100. A number of specially-themed activities are also held to coincide with several annual events, including the Children's Festival and the Dragon Boat Festival.

Such large-scale venues also have the advantage of offering a range of parent-child interactive activities. Apart from their competitive element, these programmes are also designed to be fun, entertaining and suitable for participants of all ages. As well as developing a child's physical and mental strengths, these session are also seen as conducive to nurturing parent-child relationships.

Winter Specialities

As urban sporting communities continue to grow, attracting ever younger participants, children's leisure activities have become notably more specialised. In a sector such as rock climbing, for instance, a number of professional climbing gyms in Beijing now offer activities specifically targetted at teenagers. Typically located near mid-to-high-end residential communities, many such gyms hire bilingual coaches for their courses, with these facilities often sought after by middle-class families and the expat community. Entrance to such establishments does not come cheap, with even the mass-market rock climbing gyms charging around Rmb300-400 per person.

These costs, however, do not deter participants. According to one coach at the Capital Gymnasium, an indoor rock-climbing centre in Beijing, the venue is always fully booked during the winter holidays. On a weekday, its clients tend to be adults, with children and teenagers more frequently seen at the weekends and during holiday periods.

Taking a view of the way the market is developing, the coach said: "The overall standard of children's rock climbing has been rising rapidly. We are now planning to conduct a natural rock climbing training session in the south during the winter holidays."

Photo: Wall to wall: Climbing demand.
Wall to wall: Climbing demand.
Photo: Wall to wall: Climbing demand.
Wall to wall: Climbing demand.
Photo: Shoot to thrill: Highly-targetted fun.
Shoot to thrill: Highly-targetted fun.
Photo: Shoot to thrill: Highly-targetted fun.
Shoot to thrill: Highly-targetted fun.

In addition to rock climbing, skiing has also proved particularly popular with schoolchildren. In Beijing, both the Bird's Nest Ski Resort and the Yuyang International Ski Resort, are now actively promoting their children's skiing festivals and winter skiing camps.

One district of Beijing – Pinggu to the east of the city – enjoys a particular advantage when it comes to skiing. Set very close to a number of resorts specialising in the sport, students from the district's 29 primary schools receive an average of 15 hours of ski training every term. Inevitably, this has proved a huge boost to the popularity of the sport in the area.

Many of the local resorts now run three and five-day winter camp skiing courses, with the average daily fee said to be around Rmb1,000. The courses available include snowboarding, as well as elementary, intermediate and advanced skiing classes. So popular are the elementary and intermediate courses that they are said to sell out almost as soon as they are announced.

Other popular winter sports activities for children include fencing, taekwondo and basketball. Among these, fencing is proving a particular success, with an increasing number of mainland schools now offering courses in the subject. In the Zhejiang province alone, 30 primary and secondary schools now offer fencing classes. It is a similar story in Beijing, with fencing competitions regularly held for both primary and secondary school students.

Chu Wen, Special Correspondent, Beijing

Content provided by Picture: HKTDC Research
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