A growing awareness of health and wellness is driving Asia Pacific consumers to adopt a more active lifestyle, which in turn is spurring growth in sales of related sporting goods and apparel, along with fitness studios.
Governments are playing a key role in fostering a more active lifestyle, with authorities encouraging greater public participation in sport and physical exercise at a national level.
This is partly being driven by the scale of the challenge posed by Asia’s aging population. For example, authorities in China have embarked upon a large scale construction of public fitness facilities, whilst in Japan, the government is setting up training camps in towns and cities across the country ahead of the 2020 Tokyo Olympics in the hope of promoting sporting exchanges and culture between locals and athletes.
Rise of Activewear
Higher rates of participation in sports and fitness across Asia Pacific are driving strong demand for suitable apparel across the region. Consumers’ increasing demand for products that are both practical and fashionable has spurred the development of athleisure, an entirely new category of clothing, which includes items such as yoga pants, jeggings and sweatshirts.
The growing popularity of athleisure has helped drive solid growth in sporting goods sales in Asia Pacific, whilst non-sporting goods retailers are also capitalizing on the activewear boom by launching their own range of sports-inspired clothing or dedicated product lines.
Intense competition within this category, along with the growing influence of millennial consumers, has prompted traditional sporting goods and activewear retailers to explore new product development and marketing strategies, such as collaborating with established designers or hiring high profile celebrities to enlarge their customer base.
New In-store Experience
Once merely places to purchase products, many activewear and sporting goods stores are being repositioned as locations where consumers can trial and learn about the full range of goods on offer. Many flagship stores and dedicated shops for specific product lines now come equipped with running tracks, basketball courts and exercise areas for customers to use.
For example, ASICS’ flagship store in Tokyo can accommodate yoga and Pilates sessions, where in-store brand ambassadors are on hand to provide product information and feedback with help from technology including sensors and motion analysis. Elsewhere, a major US activewear brand opened a basketball themed store in Beijing in early 2017, which provides consumers with real-time feedback on their performance at the in-store half-size basketball court.
This has resulted in stronger demand for large retail spaces able to accommodate expanded product lines and services under one roof. In major retail markets such as China, Japan, Hong Kong and Singapore, activewear and sporting goods retailers have replaced fast fashion brands as the main demand driver of flagship stores.
Growth of Fitness Studios
Another retail category to benefit from increased participation in physical exercise is the fitness industry. Chain operators offering a wide variety of activities have displayed solid expansionary demand across the region, with a distinct preference for spaces greater than 20,000 sq. ft.
While demand has traditionally been led by large occupiers, recent years have seen the growth of boutique fitness studios. These operators tend to offer smaller and more personalized classes; flexible membership terms; and specialize in one or small number of fields. This enables them to operate with fewer full-time staff and allows for greater flexibility in their space requirements, which can be as low as 1,000 sq. ft.
Additionally, landlords are embracing the health and wellness trend as part of an overall focus on positioning shopping centers as community hubs. Apart from gyms, recent years have seen malls introduce sports-related playgrounds such as bouldering facilities, trampoline parks and archery clubs. Similar offerings targeted at children are also increasingly popular.
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Growing awareness of the importance of physical exercise, government initiatives, and rising incomes will support the further growth of sports-related retail in the coming years. CBRE expects to see further expansion by activewear retailers and fitness studios in Asia Pacific and the emergence of new players. In particular, specialized brands and operators will be ideally positioned to capitalize on strong demand for consumption and lifestyle upgrading in emerging Asia.
Based in Hong Kong, Liz Hung is Associate Director of Research for CBRE Asia Pacific, and leads the production of CBRE research reports covering the retail sector. Since joining the team, Liz has been working closely with local research members in operating the Asia Pacific research platform, including fundamental research on different property sectors. Her role includes analyzing regional and global trends within the retail market and supporting the APAC cross-border retail team in growing their business.