Australian compression and high-performance sportswear brand 2XU has formed a JV with Chinese fashion retailer GXG as part of an Asia expansion plan.
This will give it access to more than 1 billion Chinese consumers, and 2XU plans to add special apparel lines for the market. China’s gym and fitness industry has been growing at an annualised rate of 11.8 per cent since 2011 and generated nearly US$4.6 billion in revenue last year.
Under the JV, 2XU plans to open up to 50 retail stores throughout mainland China in the next three years as well as its online and wholesale business.
CEO Paul Higgins says the move is significant for the business, which launched in Melbourne 12 years ago. It first entered Asia in 2008 with a wholesale presence in Hong Kong and Singapore, and is now in 13 markets across Asia Pacific. It plans to increase its stores from 22 to 50 in the next 12 months, and to 100 in the next three years.
Growth in the sportswear market in China has been driven by an upswing in sports participation rates. About 2.8 million runners last year took part in events, according to the Chinese Athletic Association – double the number in 2015. However, the number of gym attendees across 70 major cities has grown by up to 5 million every year since 2011.
Already 2XU has been generating 51 per cent year-on-year growth in Asia Pacific in the past 12 months. The brand is available in Mainland China via concept stores in seven major cities, and has retail and wholesale channels in Hong Kong, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan, the Philippines and Vietnam.
Under the new JV, 2XU Performance Centres will start opening in major Chinese cities from early next year.