The end of China’s three-year COVID-19 lockdown policy has paved the way for the recovery of the country’s Sports and Esports industries.
Adding to this momentum, the upcoming 19th Asian Games hosted in Hangzhou in September 2023 present a remarkable opportunity for further growth and development in these sectors.
In this article, AST will provide you with an overview of China’s sports and esports industry, highlighting their current state of development, as well as the opportunities and challenges they currently face. We will also delve into insights from industry experts regarding the promotion of urban sports in China, exploring the reasons why the Hangzhou Asian Games might be a pivotal catalyst for future advancements, and how it aims to boost ongoing fan engagement, as well as further augmenting the industry’s ecosystem.
Over the past decade, China’s sports industry has achieved remarkable growth, with both its overall market size and added value demonstrating rapid upward trends. From 2012 to 2021, the total scale of China’s sports industry surged from 952.6 billion yuan to 3.118 trillion yuan, registering a CAGR of 14.1%. The added value of the sports industry soared from 313.6 billion yuan to 1.224 trillion yuan(43.2 billion USD to 168.6 billion USD), with a CAGR of 16.3%.
China’s sports industry is segmented into three major categories:
Sports services being the largest sector in the industry. According to data from the National Bureau of Statistics of China, in 2021, the total output value of China’s sports services reached 1.659 trillion-yuan(228.5 billion USD), accounting for 53.2% of the industry.
Approximately 440 million people in China engage in regular physical exercise or sports activities, underscoring the immense market potential for the growth of the sports industry. The Chinese government has also unveiled the strategy of “Healthy China 2030” and “14th Five-Year Plan”, aiming for the sports industry to exceed a total scale of 5 trillion yuan(688.6 billion USD) by 2025. A series of policies have been introduced to encourage broader public participation in sports activities, further expanding the base of active sports participants, and driving the flourishing advancement of the sports industry.
For the first time after years of consistent growth, China’s esports industry witnessed a decline. In 2022, the size of China’s esports market was approximately 157.9 billion yuan(21.8 billion USD), a year-on-year decrease of 5.6%. Of this, the mobile esports segment, which constituted the largest portion, stood at 81.9 billion yuan(11.3 billion USD), marking a 7.3% decline compared to the previous year.
Firstly, the COVID-19 lockdown policies halted esports events and offline activities in China, leading to insufficient market growth momentum. Secondly, concerns about gaming addiction and its negative impacts on minors prompted the Chinese government to launch a comprehensive crackdown on the gaming industry for several months. Major industry giants, such as Tencent and NetEase suffered significant revenue losses and reductions in market value; resulting in the loss of a portion of domestic gaming users.
Esports user base in 2022 was approximately 488 million, showing a slight year-on-year decrease of 0.33%. Among them, male users accounted for 56.40% and female users accounted for 43.60%. In terms of age groups, users that are under 25 years represent the core demographic of the esports market.
Since 2023, the esports industry has seen noticeable improvements, with the sector clearly regaining its growth momentum. At China Digital Entertainment Congress (CDEC) held in Shanghai, CGICGC announced that in the first half of the year, domestic game sales revenue reached 144.26 billion yuan(19.9 billion USD), the total revenue of esports industry is 75.99 billion yuan(10.5 billion USD), and the number of video game players soared to a record-breaking 668 million.
Urban sports, primarily street dance, skateboarding and frisbee, have gained increasing recognition in China in recent years.
According to the “China Street Dance Industry Development Report”, currently over 10 million people in China choose to learn street dance annually, with over 200,000 participants in various street dance grading examinations, 32 provincial street dance alliances, nearly 3 million professional trainers and close to 10,000 street dance training institutions.
Skateboarding has seen a surge with over 6 million new participants, bringing the total number of participants to over 20 million. The rapid growth in mass participation has also accelerated the establishment of businesses within the industry, more than 40,000 companies focusing on urban sports have been founded in China.
Compared to traditional competitive sports, urban sports have a lower entry barrier, are more recreational, and possess a pronounced social aspect, which are more favored by the younger demographic. According to surveys from ANALYSYS.COM, the 18-24 age group constitutes the largest number of participants in urban sports, with 65% of them preferring to engage in such activities with friends.
AST had the great privilege of interviewing Mounir Biba; 13x Breaking World Champion 🥇 & Head Coach of the Chinese National Breaking Team to dive deeper into the rise of urban sports in the country. He has recently worked alongside Tony Estanguet, the president of Paris 2024, to have the sport successfully added to the Olympic programme.
Mounir shared valuable insights on the current state and future of these sports in China. According to him, Urban sports are rapidly growing in China. While it may be challenging for China to catch up to well established countries in traditional sports Urban sports present an opportunity for China to excel and establish itself as a major nation in these new areas.
Breakdancing has experienced significant development in China over the past decade. The number of break dancers and dance studios has been steadily increasing, making it one of the most popular sports among the youth. Although breakdancing is often associated with the younger generation, Mounir emphasized that it appeals to people of all ages. Its inclusivity, the importance of music, and the creative and unpredictable nature of competitions set breakdancing apart from traditional sports and other urban sports.
The inclusion of breakdancing in major events like Hangzhou 2023 and Paris 2024 Olympics plays a crucial role in the sport’s growth in China and beyond. The Olympic Games provide an opportunity for increased media coverage, corporate interest, and international exposure. The Chinese scene, although lacking international experience initially, has made significant progress, thanks to the efforts of the Chinese Dance Sport Federation (CDSF) and the national team members.
Looking ahead, Mounir believes that the urban sports market is just beginning to blossom and expects it to explode after 2024. The interest and demand for breakdancing, as seen in the Youth Olympic Games in Buenos Aires in 2018, indicate its potential for success. However, the sport will face challenges in meeting the growing demand for learning and organizing events. The community needs to be prepared to handle the increasing interest and educate individuals to adapt and contribute to the sport’s continued growth.
To read the full interview with Mounir, click here.
At the time of publishing, we are now less than ten days away from Asia’s biggest sports event; the 19th Asian Games. Hangzhou, capital of East China’s Zhejiang Province will be hosting a whopping 45 participating countries from September 23 to October 8. will be the third Asian multi-sport event held in China, after the 1990 Beijing Asian Games and the 2010 Guangzhou Asian Games. Hangzhou 2023 is set to be the biggest-ever, having broken historical records in three main aspects:
In terms of media broadcasting, China Central Television (CCTV) holds the exclusive all-media broadcasting rights for the mainland China region of the Asian Games. Additionally, China Mobile and TikTok China have acquired the rights of online streaming broadcasting.
As the largest comprehensive sports event in the Asia-Pacific region, the Hangzhou Asian Games will further fuel the resurgence and growth of China’s esports industry. Seven games in total, including League of Legends, Dota 2, Honor of Kings, and FIFA Online, will be officially included as competitive events for the first time. The expected total live audience will surpass 70,000. The expected market scale is about to reach 171.9 billion yuan(23.7 billion USD), with 511 million users at the end of 2023.
The Hangzhou Asian Games presents a significant opportunity to empower the Chinese Urban sports industry. With the government’s focus on promoting sports participation and the rising popularity of urban sports among the youth, the Games can serve as a catalyst for further growth and development. Through cultural exchange, infrastructure development, professional training, media exposure, and enhanced fan engagement, the Games aim to create a lasting impact on the industry’s ecosystem. By leveraging technology, integrating esports, and hosting cultural festivals, the Games will attract a wider audience and position urban sports as a vibrant and thriving sector in China’s sports and Esports landscape.
After the Hangzhou Asian Games, multiple sports venues will be transformed into comprehensive community sports centers for the public, not only aiming to increase the ratio of reuse efficiency of venues but also providing robust support for the broader adoption of urban sports and fitness activities among the general population, thus further driving the trend of nationwide sports participation.
As a prominent consulting firm specializing in sports, esports, health, and well-being, Asia Sports Tech has been contributing to China’s dynamic landscape for many years. We believe that by capitalizing on the convergence of sports and esports and the rise of new technologies, investors and brands can position themselves for long-term success in the hugely important China market. Innovative business models, strategic partnerships, and targeted investment in infrastructure and training will be the key drivers.
If you want to learn more about the Chinese market and get involved in supporting its growth, reach out to AST today!
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