Guohai Securities released a research report that the outdoor industry is expected to enter a new round of upward period, to welcome the "new golden decade", the short-term catalyst of the epidemic. It is conservatively estimated that under the camping participation rate of 13%, the market space of the camping industry is expected to exceed 50 billion, of which the market segments of sleeping bags, tents and inflatable mattresses are expected to become the top three. It is suggested that we should pay attention to the vigorous development of the outdoor industry, pay attention to the improvement of the penetration rate of minority sports in China, and maintain the "recommended" rating. Suggested attention: Zhejiang Nature (605080.SH), Spring Wind Power (603129.SH), Li Ning Co. Ltd. (02331), Xtep International (01368), Mugao Di (603908.SH), Xtep International (01368), etc.
The main points of Guohai Securities are as follows:
China's outdoor industry is expected to enter a new round of rising period, ushering in a "new golden decade", the epidemic has become a short-term catalyst for outdoor sports enthusiasm.
From a global point of view, the development of China's outdoor industry is relatively backward. According to the outdoor products market report, from 2000 to 2012, China's outdoor industry has entered a period of rapid development. The core outdoor market has a compound annual growth rate of 56.8%. The size of the core outdoor market reached 13.24 billion yuan in 2013. From 2020 to 2019, China's outdoor industry has entered a period of stable development. Under the catalysis of the epidemic, outdoor sports such as camping, skiing, Frisbee and so on have become a new trend of sports. Minority sports have gradually entered the public view and become a new way to socialize, and new growth points have emerged in the outdoor industry. According to the development experience of the United States and Japan and the development cycle of outdoor history in China, this "outdoor hot" business cycle is expected to usher in a new golden decade.
The plight of the epidemic triggered the camping craze, and tourism plus social sharing promoted the camping craze to last.
With the continuous expansion of the camping market, the types of camping have gradually become diversified, from traditional camping to exquisite camping, convenient camping and so on. Exquisite camping under the epidemic has become a "replacement" for tourism, which not only meets the needs of people to leave the city, is more in line with the living habits of the epidemic, but also meets people's needs for social sharing, attracting a large number of post-90s women and consumer groups in first-tier cities. it is estimated that it will cost about 1000 to 2000 yuan to experience an exquisite camping. According to Ai Media Consulting, the core market size of camping reached 74.77 billion yuan in 2021, driving the market size to 381.23 billion yuan. According to enterprise survey data, the number of camping-related enterprises increased by 227.5% in 2020, achieving the fastest growth rate in nearly a decade. Outdoor brands such as Mugaodi and Zhejiang Nature also benefited from this camping trend, with revenue growth eye-catching.
Following the first "camping fever", outdoor camping in Japan began to pick up gradually, and SnowPeak's income increased significantly in the context of "exquisite camping".
After World War II, the per capita GDP of Japan has increased rapidly, and all kinds of outdoor sports in Japan have sprung up one by one, from ball games and skiing to extreme sports, as well as the first round of "camping fever" in the second half of the 20th century. Various forms of outdoor sports have been diversified, and various product brands have emerged as the times require. According to China Business report, the penetration rate of camping in Japan in 2021 is more than 10%. As a high-end Japanese outdoor sports brand, its gross profit margin has remained around 55% in the past two years, according to SnowPeak's official website. Under the influence of the second round of camping boom in 2021, sales revenue has increased significantly, with net profit up 125% year on year. Its main source of income is Japan, and its revenue in the UK increased by 684% in 2020 compared with the same period last year. The company is dominated by wholesale channels, with outdoor business accounting for the largest proportion.
The overall development of outdoor in the United States: economic development, policy promotion, infrastructure improvement are the three major driving factors of outdoor prosperity.
It can be roughly divided into three periods. Before 1970, outdoor activities were promoted by the improvement of economy, transportation and vacation system after World War II. From 1960 to 1970, government policies and financial support promoted the development of outdoor industry, and the demand for outdoor activities increased rapidly. forms are diversified, and after 1960, it has entered a period of deepening growth with the expansion of activity penetration and frequency. Generally speaking, American outdoor sports rely on the infrastructure established for a long time, such as the national park system, the national trail system, the interstate highway system, and the economic foundation of high per capita GDP, which reflects the characteristics of high crowd penetration, high frequency of activities and large market scale for a long time.
The development trend of camping in the United States is synchronized with the historical development of the outdoor industry, with the help of economic development and social improvement after World War II, driven by government policies and infrastructure investment.
According to the u.s. department of agriculture's forestry service and the American outdoor industry association, individual camping participation rose from 10% in 1960 to a peak of 29% in 1995 and has been stable at around 15% for a long time since 2007. Although the scale of American camping consumers is generally stable in the past 15 years, there is still a significant increase in the average price of personal consumption. According to Statista,2008-2020, the per capita camping equipment consumption CAGR:4.29%, of American camping groups has promoted the total growth of the American camping equipment market. At the same time, the COVID-19 epidemic also catalyzed a large number of new camping consumer groups.
China's outdoor market has three driving conditions for long-term development:
At present, the per capita GDP of China has reached more than US $10, 000; the national policy pays attention to the overall promotion of the sports industry (such as the 13th five-year Plan for the Development of Sports Industry), especially the favorable policies for the development of minority sports (such as the Development Plan of Mountain Outdoor Sports Industry); the expansion and improvement trend of outdoor sports infrastructure, including the increase of urban green space, the number of outdoor parks, camping camps and ski resorts. From the historical experience of the United States and Japan, the Chinese market already has the mature conditions for the popular expansion of outdoor sports. With reference to the penetration rate of the outdoor market in the United States and Japan, the future outdoor track in China will show an increase in total volume, a gradual dispersion of segments, a preference for strong social interaction, weak confrontation, low threshold and female-friendly sports, and gradually replace traditional social venues such as cinemas and gyms. Among them, the penetration rate of China's camping industry still has about 10% room for further penetration. It is conservatively estimated that under the camping participation rate of 13%, the market space of China's camping industry is expected to exceed 50 billion, of which the market segments of sleeping bags, tents and inflatable mattresses are expected to become the top three.
In the future, the upsurge of outdoor camping will further radiate to minority sports such as Frisbee, fishing, cycling, and flag rugby, and the permeability of each subdivided track is expected to increase to about 10%, becoming a new growth point in the market for outdoor supplies and sports shoes and clothing, and related industrial chains will benefit. This kind of minority sports has the attributes of strong social interaction, low threshold and low cost. according to Taobao data, a Frisbee movement costs about 230-850 yuan, which broke out after it was spread by social media such as Little Red Book. The State Administration of Sports issued a notice on holding the 2022-2023 Chinese Frisbee League on July 7, 2022, which is scheduled to start in the second half of 2022. The Frisbee industry may enter the mature mode of events + training services + equipment, and has become a lower-cost sports alternative for young people than gyms. According to media consulting, the current core industry scale of Frisbee is estimated to be 76 million. It is expected that the scale of the core industry of Frisbee will continue to grow at a high speed in 2022, which will lead to the growth of the market of sporting goods such as yoga clothes and sports shoes. Flag rugby is also a new wave of industry craze, with stronger sports compatibility, better for beginners and women, higher room for advancement, and higher stickiness for sports users.
Compared with other minority sports, fishing has a mature and complete industrial chain, a large number of related comprehensive enterprises and comprehensive business.
There are many fishing brands in China, and the fishing industry has maintained a certain popularity for a long time: according to enterprise survey data, the registration of fishing gear-related enterprises in China has continued to grow in the past decade, with a growth rate of more than 15%. Among them, 96% of the fishing gear-related enterprises have registered capital of less than 5 million, which are small and medium-sized enterprises. Huajing Intelligence Network shows that the population of fishing consumers is getting younger, and the ways of experience and types of fishing gear are diversified. Although middle-aged people are still the main consumers of fishing, the proportion of young people is gradually increasing, with 23% of people under the age of 24. The population of fishing enthusiasts is getting younger.
Under the background of the upgrading of bicycle consumption, the second round of domestic "cycling fever" is on the rise, and the supply end of bicycle transmission is insufficient.
In March and April of 2022, the sales of cycling products on various e-commerce platforms in China exploded, and the average price of products increased significantly. According to Wind data, sales of cycling equipment increased by 10% in the first quarter of 2022 compared with the same period last year. Domestic well-known bicycle brands include Giant, Merida, Sidson and so on. At present, domestic bicycle transmissions are in short supply and mainly rely on imported products. According to the Chinese Entrepreneur, Japanese company Mano occupies most of the market share (70%-80%). Shimano's sales of bicycle parts increased by 49% in 2021 compared with the same period last year, the highest in nearly five years. Exquisite craftsmanship, patent rights and a wide range of practical scenes are the main reasons for its leading sales. Under the epidemic, China has become the second largest market of Brompton brand in the world. Folding, hand-crafted and customized make the brand very popular with consumers.
Risk Tips:The economic downward consumer demand is lower than the expected risk; the risk of closure of offline stores and outdoor camping sites in the epidemic situation; the intensification of market competition and the risk of pattern deterioration; consumer preferences are difficult to predict and products are less than expected risks; outdoor and camping consumer preferences and industry prosperity are difficult to predict risks; overseas markets and brands are not completely comparable to domestic markets and brands. The calculation results in the report may have some deviation from the reality, which is for reference only.