On the upswing
Updated: 2011-12-02 09:08
By Wang Ying (China Daily)
Scott Hull, Nike Golf's Greater China general manager, says the brand wants to be the leader in the Chinese market. [Provided to China Daily]
Nike Golf approaches China with intention of becoming the No 1 brand
After revising its development strategy in June, Nike Golf looks to become the No 1 golf brand in China, a senior executive from the company says.
Nike Golf, the brand under sports and apparel maker Nike Inc, entered China in November 2005 by selling products to Hong Kong-based distributors, who were responsible for everything from importing and marketing to sales. According to its Greater China general manager, Scott Hull, Nike Golf moved its oversight in-house in June.
"We see a radical change in our business model here. We're taking full advantage of the tremendous opportunities in China as business grows, and Nike wants to be the leader here in the coming years," says Hull, a 49-year-old Canadian native who was raised in the United States.
As a leader in the market, a company should take at least 20 percent market share, Hull says. "We have about 10 percent of the market share right now if you look at all the categories. And we want to be No 1."
Nike Golf, which sells head-to-toe golf gear at Nike's 300 retail stores in China, has set aggressive targets on revenue and marketing, Hull says, declining to give specific figures. But he says some of the targets have already been met.
According to Nike Golf's forecast, China's golf market will be the fastest growing market in the world in the next five to 10 years, Hull, who now stays in Shanghai, says.
Liu Yongmao, founder of China's largest golf retailer 100 Golf, said in August that the domestic golf market's total sales exceeded 3 billion yuan ($472.8 million, 354.1 million euros) in 2010, and is expecting a growth rate of 15 percent annually.
The optimism of Nike Golf is partly fostered by the growing popularity of the sport among Chinese people.
"If you went to a Chinese driving range four or five years ago, half of the people there were foreigners, such as Koreans, Japanese or Europeans. But if you go to a driving range today, 80 to 90 percent of them are from the Chinese mainland," Hull says. "We have played many different courses around China, and are consistently impressed by the design and the conditions of the courses."
And as the number of golfers grows, so does their knowledge about the equipment. Hulls says more athletes seek authentic equipment because they know a good set of clubs will help their performances. "That's a major change from five years ago," he says.
Since specific equipment is needed for playing golf and the golf population is increasing, there is now a growing demand for golf equipment and clothing.
Currently, China's golf equipment market is dominated by foreign brands such as Callaway, Titleist, TaylorMade, Nike, Mizuno, Bridgestone and Honma. On average, a set of golf clubs costs about 15,000 yuan.
The golf apparel market in China has a much higher percentage of the golf market than in the West.
"In the US, for example, apparel is about one-third of the total golf market; in China, the apparel revenue contributes about 50 percent to the entire golf industry," Hull says.
Experts explain that the difference means a large amount of China's golfing population doesn't play the game very often. But Nike sees great potential here because as more Chinese people become wealthy, they are expected to spend more on leisure and exercise.
Golf has long been labeled as an elite sport in China, but Hull says Nike wants to popularize golf among a broader base and make it less exclusive and more inclusive.
Industry insiders estimate that the number of golfers in China is up to about 5 million. But compared with China's 1.3 billion plus population, that's still a small portion.
"We would like more people to be able to play golf, and we will do everything we can to increase access to the game," he says. "Nike is very involved in the grass-roots market, where we do very well. And it's also something we think can help make a difference here to help grow the golf market."
Although Nike is not the first brand to scope out the opportunities in China's golf market, such as California-based Callaway, its ambitious plans could make it the top golf brand in China.
Hull has worked for Nike for eight years and says he has a thorough understanding about the golf market in Asia. He says the needs of Asian golfers are different from the West.
Chinese golfers prefer lighter and more flexible clubs and there are more beginners here. The apparel design in Asia uses more colorful designs, and the size, cutting, sleeve length and width of the pants are also quite different.
In China, about 50 percent of amateur golfers are novices with less than one year of experience, a much higher percentage than the one-third in the US, according to Nike's research.
Hull says many new Chinese golfers play the sport because their friends do, and they just want to be with their friends.
"That is very different from the West, where people learn from their dads, or other family members," he says.
Hull first learned how to swing a club at the age of 6 or 7 from his father. His handicap at one point was 4, but he wasn't able to improve because did not spend enough time practicing. A lower handicap indicates a stronger golfer.
Looking forward, Hull says apart from grass-roots golf promotion, professional golfers could boost local markets by, say, winning a major championship.
Hull says China's junior golf program has experienced a major change in the past five years in almost every measure. The kids who are playing golf now are 13 or 14, and they will likely continue playing.
These teenagers are very talented, he says, and by many standard are competitive among world-class junior golfers.
"They will be able to play at a very elite level for a very long time. So we think there will be a lot of great Chinese golf players in the next 10 years or so," he says.
Hull says the Chinese people need a golfer like Li Na, who became the first Chinese athlete to win a major tennis title. By doing so, she encouraged youths across China to pick up rackets. When that happens in the golf world, the sport will explode.