Many articles that are good at “romance” like to start with “this era”. Indeed, this era is full of variables and opportunities.
Take marathon as an example, a fitness sport that seems to have spawned an industry with a direct scale of tens of billions and a derivative scale of hundreds of billions in a snap of the fingers. Even this data is still growing, which is amazing. Let’s deconstruct this huge business opportunity and let 21st Century Business Herald reporters explain the stories and logic behind it.
Based on the return visit information, the 21st Century Business Herald reporter learned that most running start-up companies face various problems such as low profit margins and unclear profit direction. Some entrepreneurs said frankly about their trump card, “Now everyone is not making money or not making much, and we are betting on a future. It may take three to five years for this industry to start releasing dividends. Now it’s up to us to see who can survive.”
The sports market is huge, the new consumption of the middle class is rising, and the number of runners is rapidly rising… These are all persuasive labels on PPT. The running entrepreneurship market seems to be beautiful.
However, reporters from the 21st Century Business Herald visited a group of running startups and found that some active companies have disappeared, while others are constantly adjusting their main businesses and their ideas are gradually becoming clearer.
Let a hundred flowers bloom
“Any small market entry point, such as running socks, is a big opportunity if it is done well. There is no such company in China now.” Yang Yuan (pseudonym), the head of a start-up company that started out as an event operator, told the 21st Century Business Herald reporter.
He said that currently no one in China has really made a lot of money from running business alone. But it is still optimistic about the overall market prospects.
The running industry chain covers a wide range of areas. The marathon consumption ecosystem includes shoes and apparel, competition registration, smart hardware, software, social networking, tourism, finance, transportation, food, accommodation, big data, event broadcasting, etc.
Take Li Ning, a shoe and apparel company as an example. Li Ning is no longer just selling shoes and apparel. It also creates independent IP road running events and cooperates with Internet companies to build an ecosystem. The most popular thing in the capital market is running software entrepreneurship, and the concept of Internet + sports has attracted a lot of attention. Among the running software, Gudong, Yuepaoquan, Leli, etc. have attracted more attention.
Zhang Yue is a senior runner in Beijing. In 2016, he and his partners launched a running software, which became a hot topic in the software market. He told the 21st Century Business Herald reporter that there are too few softwares that truly teach beginners to run scientifically. Their positioning is to allow beginners to run scientifically and reduce injuries.
Shanghai’s Cai Yinge is a senior cross-country player. In 2016, he and his friends quit their jobs to start a business and launched a cross-country running route development software to locate Dianping in running routes.
A research report on running apps from the Aurora Data Research Institute stated that running fitness apps appeared in China in 2012 and entered a blowout period in 2014. After experiencing the investment boom in sports projects in 2014, the investment cooling down in 2015, and the capital winter in 2016, running and fitness apps on the market have each shown their talents in segmented fields to meet the various needs of sports enthusiasts.
Continuous transformation and exploration
As capital becomes more rational, many running startups faltered in 2016. At the same time, competition among major running software has also become fierce, and profits are still expected.
A reporter from the 21st Century Business Herald learned that e-commerce + advertising are the initial development ideas of many apps, and their development directions are constantly being adjusted. Some companies insist not to do social networking, while others strengthen In order to promote the socialization and gamification of operations, some companies are trying to launch fitness live broadcasts. Among them, Yue Pao Quan and Gudong have also focused on promoting a series of online marathons.
Gudong officially claims to be “the world’s leading sports social platform and sports big data platform”. The data will bring great imagination to the “Internet + sports” industry and even cross-border development.
Wang Lei (pseudonym), a senior entrepreneur in the running field, also said that he has visited many running startups in the United States. Running companies have developed to a certain stage and have basically stabilized. There will be no growth in ten years. It’s too much growth, and China’s running population is expanding rapidly, so there are opportunities. However, some domestic running app companies are valued at hundreds of millions of dollars, which is a bit high compared to some large companies in the United States.
Yang Zhilong, a partner of Zheshang Venture Capital, told the 21st Century Business Herald reporter that he has seen many sports startup companies that are small in scale and highly replicable. If they are not the best in the industry, they will easily disappear.
”The running population base is huge, but it is difficult to monetize it. For example, the live broadcast of marathon events is destined to not attract as much attention as other swimming and basketball competitive events, which also means that sponsorship fees cannot be high.” Yang Zhilong pointed out.
Equipment companies, event operation companies, and running travel companies are also making various attempts. A reporter from the 21st Century Business Herald found out that many running self-media are currently selling their own products, but the sales volume is unknown.
In early 2016, a reporter from the 21st Century Business Herald interviewed a company that was engaged in social e-commerce for sports equipment. It claimed to have raised tens of millions of dollars and had hundreds of WeChat group communities.��The company had disappeared by the end of 2016.
Where to run in 2017
The only constant is change, which is especially obvious in the immature running market entrepreneurship.
Xiong Jinlei is the founder of a running tourism startup. His idea is to continue to expand into new areas on the basis of stabilizing the largest domestic market share in running tourism entrepreneurship, focusing on running medical care, including running detection, Treatment etc.
Xiong Jinlei told the 21st Century Business Herald reporter that in groups where senior runners gather, posts discussing the prevention of injuries and treatment of injuries through exercise appear most frequently. In any sport, as the number of participants expands rapidly, various injuries are bound to occur. As the running age increases, it is normal for everyone to have major and minor injuries, which require scientific physical examination and treatment.
Another area he is optimistic about is running sports insurance, which is also a direction that his company is exploring. For insurance in some subdivided areas, they can try to cooperate with related industry chains. At present, many domestic financial institutions have launched running insurance products.
Yang Yuan, the founder of the company who has been engaged in event operations for many years, believes that if small-scale event operation companies rely solely on event operations to make profits, they will basically not survive well at this stage. Event operation requires time and reputation. The Boston Marathon, which has the longest history, was almost unable to continue due to losses, not to mention that many domestic events were only held for the first time.
Yang Yuan told the 21st Century Business Herald reporter that his company has basically achieved small profits by relying on event operations. The event brand has already formed a reputation in the industry, and future profits can be expected. In 2017, they will focus on another area, and the specific business will be kept confidential for the time being.
He believes that running events requires a lot of manpower and material resources, as well as communication costs. It takes several months to run an event, and it also requires professional event directors and experienced executives. He pointed out that there is still a huge market of runners in third-, fourth- and fifth-tier cities that needs to be tapped.
From the equipment market, although foreign sports brands basically cover the core domestic running population, there are still plenty of opportunities for some domestic companies and startups. “If there is a company in China that can really help runners solve the problems of socks, water bottles or bags, and it is cheaper than abroad, it will definitely live a good life.” Yang Yuan said.
