Industry Insights | "Summer Economy" Superimposed on the "Post-Winter Olympics Economy," China's Skiing Industry Continues to Heat Up

Overall, the Chinese skiing industry has tremendous development potential. Firstly, from the demand side, compared to countries such as Europe, America, and Japan, which have more developed skiing industries and higher participation rates, the penetration rate of skiing among China's total population is still very low, at less than 1%, far below Switzerland's 34% and Norway's 22%. There is also a significant gap compared to Japan's 10% and America's 8%, indicating that China still has great potential for developing its skiing population.

Secondly, the disposable income per capita of our residents has been continuously increasing, providing an increasingly solid economic foundation for the public to participate in leisure and entertainment activities such as skiing.

Thirdly, China's skiing industry resources are becoming increasingly abundant. Currently, there are about 700 operating ski resorts, and the number of indoor ski resorts that operate throughout the year has also been growing rapidly in recent years, exceeding 40, which can fully support the rapid development of China's skiing industry. In addition, with the improvement in the capabilities of skiing industry enterprises, the development and operational efficiency of ski resorts are expected to significantly improve, thereby further enhancing the capacity of indoor and outdoor ski resorts to receive tourists. Therefore, we believe that China's skiing industry is a 'long slope with thick snow' track.

One of the important reasons why China's skiing industry is receiving so much attention at present is that it is still in the golden development phase of the Winter Olympics cycle.

The Winter Olympics have a significant driving effect on the development of the skiing industry. Taking the United States and Japan as examples, the 1960 Winter Olympics were held in Squaw Valley, California, USA, marking the first time in history that an Olympic event was broadcast live on television. This greatly stimulated public interest in ice and snow sports, leading to a golden period for skiing development in the US. The public's participation in skiing continued to increase, with the number of skiers rising from 1.7 million in 1960 to over 50 million in 1978, a growth rate of nearly 30 times. Before the 1972 Sapporo Winter Olympics in Japan, the skiing population was about 1 million people, with an average annual growth rate of about 4%. After the Winter Olympics, the growth of the skiing population accelerated significantly, reaching 8 million people by 1992.

Since the successful bid for the 2015 Winter Olympics, during the Olympic preparation period, skiing facilities in China have been continuously improved, and industrial enterprises have grown rapidly. By the successful hosting of the Beijing Winter Olympics in 2022, it greatly stimulated the enthusiasm of the entire nation for ice and snow sports, encouraged the public to actively participate in skiing, and initiated an accelerated expansion of the skiing industry. In the post-Winter Olympics era, China's skiing industry will experience high-speed growth.

The Beijing Winter Olympics have greatly increased the public's attention to skiing and their enthusiasm for participating in skiing activities. A group of sports stars in skiing events have also emerged on the Olympic stage. The commercial value of skiing stars reflects, from one perspective, the significant acceleration of the commercialization process of the skiing industry. Take Eileen Gu as an example; in 2022, she was shortlisted for the SportsPro list of athletes with the highest market value globally, ranking 29th, marking the first time a skiing athlete has made it onto the list.

We can see that not only brands related to skiing, such as Anta, Burton, Oakley, but also many fast-moving consumer goods and luxury brands have chosen to collaborate with skiing stars like Eileen Guo and Su Yiming for marketing purposes, enhancing their promotional effectiveness. As a gold medalist in the freestyle skiing giant slalom and halfpipe at the Beijing Winter Olympics, Eileen Guo has secured over 30 endorsement deals; Su Yiming, the gold medalist in men's freestyle skiing giant slalom, has also become a partner with many fast-moving consumer brands.

These brands, in addition to valuing the young image of skiers who are sunny, healthy, energetic, and represent the spirit of adventure, also see the increasing purchasing power of the growing group of skier enthusiasts behind them. Moreover, the success of skiers will inspire more young people to engage in professional skiing, driving the overall improvement of skiing in China and continuously perfecting systems such as competitions and training.

As early as the beginning of Beijing's application for hosting the Winter Olympics, China proposed to 'engage three hundred million people in ice and snow sports.' This guiding spirit is not only a solemn commitment made during Beijing's application but also a beacon for the sustainable development of China's ice and snow industry.

Over the past few years, the goal of 'driving three hundred million people to participate in ice and snow sports' has effectively promoted the popularization and development of ice and snow sports nationwide. By strengthening infrastructure construction, improving skiing technical training, and promoting the development of ice and snow tourism, awareness and interest among the public in participating in ice and snow activities have increased. In 2022, the number of skiers in China reached approximately 12 million, with about 22 million person-times of skiing activity.

Driven by multiple factors such as the successful hosting of the Beijing Winter Olympics, further improvement in economic levels, and policy support, China's skiing industry will enter a 'fast lane'. The number of skiers is expected to further increase to 35 million by 2027, with skiing visits reaching 90 million. Both the penetration rate of the skiing population and their participation intensity will be further enhanced.

In 2022, the market scale of China's skiing industry was approximately 43 billion yuan. The skiing industry as a whole includes several major sub-markets: ski resort operations, skiing equipment, skiing training, and skiing events. Among them, ski resort operations are the largest sub-market, accounting for about 60% in 2022.

Overall, China's skiing industry started relatively late and is still in the stage of cultivation and development. It has tremendous development potential and broad commercial prospects. With the opportunity of the successful hosting of the Winter Olympics, China's skiing industry is gradually aligning with international standards, optimizing business concepts and technologies, and fully leveraging the industrial promotion value brought about by the Winter Olympics.

It is expected that China's skiing industry will enter a period of rapid growth in the next few years and reach a scale of about 220 billion by 2027. In the forecast period, all sub-markets such as ski resort operations, ski equipment and gear, ski education and training, and ski events are expected to achieve an average annual compound growth rate exceeding 30%, with the average annual compound growth rate for the ski equipment and ski event markets expected to reach 40%.

Different from the skiing markets in Europe, America, Japan, and other regions, China's skiing industry is gradually forming a distinctive development path that involves the coordinated development of outdoor and indoor ski resorts.The main reasons for this differentiated path are as follows: On one hand, although the income levels of Chinese residents continue to rise, there is still a significant gap compared to developed countries. Therefore, when choosing leisure and entertainment activities, domestic consumers tend to prefer more economical options. For example, in terms of travel, considering factors such as expenses and vacation lengths, short-distance trips have become a more popular choice among domestic consumers. On the other hand, within the group of domestic snow enthusiasts, the proportion of consumers from southern regions continues to increase. Due to geographical reasons, southern regions lack high-quality outdoor snowfield resources and usually require long-distance travel to experience skiing.

Against this backdrop, indoor ski resorts in China have developed rapidly in recent years, forming a distinctive development path that combines outdoor and indoor skiing. Compared to outdoor ski resorts, indoor ski resorts possess multiple advantages.

Firstly, indoor snowfields are not limited by seasons and can operate throughout the year.Indoor ski resorts operate throughout the year without seasonal restrictions through artificial snowmaking and cooling systems. This provides operators with a significant advantage in terms of business stability and can meet consumers' demand to experience skiing at any time.

The second point is that indoor ski resorts are not limited by geography.Most of China's ski resorts are still concentrated in the cold northern regions, but the southern regions have the most dense distribution of skiers, leading to a mismatch between certain consumer groups and consumption locations. Indoor ski resorts, however, are not limited by natural conditions and can be freely built according to local ski consumption needs and affordability. This can directly match the demand for skiing among the southern regions with stronger consumer capabilities.

The third point is that indoor skiing is cheaper. Due to significantly lower construction costs compared to outdoor ski resorts, the ticket prices for indoor skiing are significantly lower than those for outdoor resorts.Additionally, since outdoor snowfields are usually located in remote areas, consumers also have to pay extra for flights, accommodation, and other expenses, resulting in a higher consumption threshold.The comprehensive consumption of indoor ski resorts can significantly lower the threshold for skiing consumption.It aligns with the characteristics of most Chinese skiing consumers, who are beginner enthusiasts and family travelers, and are relatively sensitive to prices.

Finally, the indoor ski resort retains the authentic skiing experience to the greatest extent possible while eliminating external environmental influences.Compared to models like dry snow and ski simulators that simulate real scenarios, indoor ski resorts can fully provide the experience of skiing on real snow.