Chinese luxury market shifts to 'athleisure'
The tastes of China's elite consumers is shifting from visibly branded goods towards high-quality athletic clothing, known as "athleisure". The trend, which emphasises wellness and a healthy lifestyle, has been very popular in the US and its adoption in China is now seen as a big opportunity for US companies. Adidas has announced it intends to open a further 3,000 stores in China over the next five years (an increase from 9,000 stores), following an 18% rise in sales there last year. The expansion of US companies in the region has edged out Chinese sportswear firms.

Customers sit in an Adidas store with a protest sign, in support of a strike by workers of Yue Yuen Industrial Holdings, pasted on its shop window during International Labour Day in Hong Kong May 1, 2014. REUTERS/Siu Chiu

China's luxury market is in transition.

In 2015, Chinese shoppers accounted for almost half of the global luxury market. But recently, luxury goods have become less accessible to the growing Chinese middle class, in part because of last year's anti-extravagance campaign led by president Xi Jinping.

Meanwhile, the tastes of the elite have shifted away from visibly branded goods in favor of quality, newness, and lifestyle.

So what are Chinese consumers spending their money on instead? Sportswear — high-quality athletic clothes, mirroring the "athleisure" trend that has taken the US by storm, with an emphasis on wellness and a healthy lifestyle. Now it's taking over China, and it has presented a huge opportunity that US companies have been profiting from.

A recent report from Macquarie Research gives a specific example — VF Corp, an apparel company that has brands in categories like sportswear and outdoor sports, has grown its Asian market from $20 million to $1.2 billion in the past decade, including over $600 million in China alone:

Company data, Macquarie Capital

The entire Chinese sportswear market has been growing quickly in the past few years, eating into the luxury-goods market that exploded years earlier. Reuters reported earlier this year that "GPS sport watches, compression leggings, and hydration packs are the new must-haves for wealthy Chinese, pumping up the multibillion-dollar sportswear industry at a time when China's elite are reining in spending on more traditional luxury brands."

Euromonitor International, a market research firm, reported that the sportswear market in China grew to $25.3 billion in 2015, and is expected to grow to $43.1 billion by 2020, surpassing the luxury-goods market.

And US companies have been moving fast to take advantage of the growing demand for athletic apparel and goods. Adidas announced it's planning to open 3,000 more stores in China in the next five years, expanding from 9,000 to 12,000, after its 2015 sales in the region increased 18%.

According to Reuters, Under Armour expects its sales in China to increase 25 percent per year until 2018, and Lululemon claims its first Hong Kong store is on track to make $8 million in sales in 2016.

As US companies become bigger, they're edging out Chinese sportswear sellers. The South China Morning Post reported in May that some domestic Chinese companies were seeing profit growth slow down. The main drivers of the sportswear boom — including the promotion of sports ahead of the 2022 Winter Olympics in Beijing and the potential boost from the end of China's one-child policy — have disproportionately strengthened international athleticwear companies, leaving Chinese companies to decelerate.