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Posted: 2017-11-02 23:19:31

2XU-China-store-setupAustralian compression and high-performance sportswear brand 2XU has formed a joint venture with Chinese fashion retailer GXG as part of an Asian 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.

Newly active Chinese consumers have driven the predicted market volume of sportswear in the world’s most populous nation to ¥280.8 billion (AUD$41 billion) by 2020. The projected growth is mirrored by 2XU’s already-strong results in the Asian region, generating 51 per cent year-on-year growth in the past 12 months.

The agreement with GXG, one of China’s leading retail businesses with more than 2000 stores in market, will see dedicated 2XU Performance Centres open in major Chinese cities from early next year.

2XU China general manager Vivian Li said the Chinese sportswear market presents significant development opportunities.

The sports brand has 26 retail and outlet stores in Australia and is present in more than 70 overseas markets via 34 retail stores and more than 4000 wholesale doors.

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