Updated: 2011-12-02 09:08
By Yao Jing (China Daily)
Chinese golfers tend to purchase their golf equipment from brand name stores. TaylorMade is one of the best-selling brands. [Provided to China Daily]
International golf brands counting on more wealthy Chinese to grow sport
Every two years, Feng Wenjie buys a new set of golf clubs. This year, he chose a set of TaylorMade R11 for around 18,000 yuan ($2,827, 2,119 euros).
The 34-year-old Internet entrepreneur typically picks foreign brands because he says they are more reliable. This is exactly the type of customer international golf gear makers are looking for: wealthy Chinese.
Xie Yufeng, editorial director of Golf Digest China, a joint publication of China's most popular sports newspaper Titan Sports and the US-based magazine Golf Digest, says international brands TaylorMade, Callaway and Titleist are the most competitive brands right nowwith sales grow by 20-30 percent every year.
California-based Callaway Golf Co established its Chinese division in 2008 and now has more than 100 distribution outlets around the country.
"Our turnover is more than 100 million yuan in China every year, and we are aiming at high-end consumers," says Ma Weiyi, marketing assistant at Callaway Golf China.
The best-seller for Callaway in China is its Legacy series, designed and developed for sale in Asia. A set of irons costs 22,280 yuan.
Dunlop Sport, the British sports equipment company, authorized Shenzhen-based Jamost Sporting Goods Ltd as its Chinese general agent in the same year as Callaway.
"Although Dunlop's golf products were seen in China even before 2000, they were managed by various agents. We now have 18 direct sales stores in seven provincial regions to cater to the increasing demand," says Jia Yan, sales manager with the company's North China area.
Titleist, a brand under Acushnet Co and owned by Fila Korea Ltd, is known for the quality of its balls and irons. It's trying to expand its presence by selling golf clubs, especially wedges and putters.
"As there are different habits and preferences in the Chinese and Western markets, Titleist has set up a special unit for the Chinese market," says Agnes Tsang, marketing executive of Acushnet Hong Kong Ltd. The special unit focuses on everything from designing to marketing in China.
She says Titleist has met its estimated targets and expected growth rate for the market over the past years, without elaborating.
"We see the Chinese golf industry growing rapidly, especially with the inclusion of golf as an event at the 2016 Olympics," she says. "We will continue our efforts in the region, such as ball testing events, with an emphasis on club fitting, and continue to educate and support key professionals in the industry."
With a population of 1.3 billion, the penetration rate of the sport is expected to grow.
The domestic golf market's total sales reached 3 billion yuan in 2010, a year-on-year growth rate of 15 percent, according to Xie's estimates.
The total number of golfers in China is equivalent to just 10 percent of the US market, and account for less than 5 percent globally, according to Dunlop's Jia.
"We think there is a potential for more Chinese golfers in such a largely populated country. Years of economic growth are swelling the ranks of the middle class, so we are targeting the novices."
The Japanese company Mizuno was the first international brand to enter the market in China in 1994.
"At that time, the golf equipment market was almost zero and people knew little about golf. This set the stage for Mizuno's foothold in the market," says Zhang Tao, golf marketing director with Mizuno China Co Ltd.
As of November, Mizuno had approximately 200 stores and distributors in China.
"Golf has a short history in China. The equipment market for the sport is still staggering. Competing for market share is a challenge for each brand in the immature market," Zhang says.
The first golf course in China opened in 1984, whereas in the West it has a history that dates back to the 15th century.
Zhang says although Europe, United States and Japan still account for the bulk of its sales, China has been growing steadily over the years.
The expansion of international equipment makers also means there is an opportunity for local retail chains as well.
In addition to the role of a leading retailer for various brands, Beijing-based 100 Golf is working exclusively with the PGA Tour, an organizer of professional golf tours. In this strategic partnership, they plan to open 180 PGA Tour shops in key cities and golf clubs around the country.
The alliance complements the tour's move to increase its footprint in Asia. The PGA Tour co-sponsored two major events in November, the World Golf Championships in Shanghai and the Mission Hills World Cup on Hainan Island.
But, most notably, it's trying to capitalize on the promise of China's golf market.
The five PGA Tour shops open now are mainly selling accessories, not golf gear. The first store was launched in 2010 in Xi'an, Shaanxi province.
"At present, our Beijing store brings in about 5 million yuan every year. Next year, the stores will expand to Shanghai, Tianjin and Chongqing," says Liu Yongmao, chairman of 100 Golf.
He says his company's sales reached 50 million yuan in the first 11 months, 10 times higher than 2006, when the company started.
TaylorMade and Titleist are the best-selling brands in Liu's company, with annual sales figures of 10 million yuan each.
OK Golf, another retailer based in Beijing, witnessed its sales volume rise from 1 million yuan in 2005 to more than 30 million yuan in 2010.
Pang Zhihai, founder of OK Golf, says they are selling products from more than 10 high- and middle-end golf equipment brands and they have almost 50,000 registered members.
He says renowned golf equipment brands such as Callaway, TaylorMade and Titleist are top sellers. Their clients are mainly men between the ages of 30 and 50 with an annual income of more than 200,000 yuan.
However, golf gear giants are also facing some problems, including how to persuade their clients to buy the expensive, imported goods.
Jia says Dunlop is losing many potential clients because golf gear is labeled as luxury goods in China, and their prices are much higher as long as they are imported into China.
Many Chinese golfers "tend to buy their equipment in foreign countries," Jia says.
In addition, Chinese golfers tend to purchase brands, instead of paying attention to the best product that will help their game. Jia says Dunlop will try to better explain their products and make people have a real understanding of golf gear.
Mizuno, the Japanese brand, says it will pay more attention to the combination of golf clubs and the best fit for each athlete's body type, which help golfers' games. And Callaway will have more tailor-made products and highlight its after-sale service in the Chinese market.
When it comes to the future of the golf equipment industry, Xie at Golf Digest China says he believes there will be more name brand stores and fewer multibrand retailers. More golf equipment stores are expected to open at golf courses where after-sale services will be emphasized.
"Most retailers sell the same brands and the same products, so many don't have core competitiveness. The market will finally consolidate and only a few large retailers will survive," Liu with 100 Golf says.