China’s active wear market is powering forward, buoyed by robust growth fueled by heightened awareness of health and wellbeing in the aftermath of the coronavirus (COVID‑19) pandemic, and backed by Beijing’s national fitness plan to promote leisure and exercise.

As sport soars in popularity, athleisure wear has become a key fashion choice for Generation Z (those born between the late 1990s and early 2010s), as a functional, versatile and attractive commodity.

China’s sportwear sector reflects the growing appeal of athleisure wear, as deal values surge. Deal volume in 2023 is more than the total deal volume of the past five years combined, according to Mergermarket data.

Further evidence of the trend is the recent acquisition of a 75.13% stake in Mayiya Clothing, owner of Maia Active, a Chinese version of Lululemon, by Chinese sportswear maker Anta Sports Products [HKG:2020].

While the deal valuation has not been disclosed, the median EBITDA multiple for deals in Greater China’s sporting and athletic goods manufacturing sector currently stands at 17.72x, according to Mergermarket data.

The transaction is also good news for investors in the consumer sector, who now have an alternative exit route of selling to strategics instead of traditional IPOs. Given the currently dour IPO market environment, consumer brands are less likely to apply for a listing in the face of sluggish consumer demand in China.

Unlike financial investors, who focus on growing the gross merchant value of consumer brands, strategic players consider a target’s brand positioning and consumer base, and whether these could complement their own business.

Maia Active’s previous investors include Belle International, Sequoia Capital China and CMC Capital. The company has a competitive advantage over global competitor Lululemon in the local Chinese female market because of its Asian fitting, offering apparel with a smaller bust and hip-to-waist. Maia Active also adopts a local social commerce strategy, and enjoys strong brand recognition among female consumers.

Rise of the ‘SHE economy’

The acquisition of Maia Active helps Anta capture more female consumers and complement its own women’s business segment. Anta says it plans to continue unleashing the potential of the female market, according to the company’s interim results announcement this year.

The term ‘SHE economy’ reflects the trend that more and more businesses are approaching their consumers and developing products from a female perspective.

Deal volume in female product and service providers in 2022 was at its highest level since 2014 at USD 4.3bn. However, the deal count was only 37.5% the level of 2021 because one-quarter of China’s population was in lockdown last year.

The median multiple for deals in China’s women and infant products sector stands at 12.15x EBITDA, according to Mergermarket data.

The ‘SHE economy’ phenomenon is driven by surging consumption demands and the buying muscle of Chinese women based on their growing earning power.

The share of female board members in publicly traded Chinese companies rose to 14.8% in 2022 from 13.8% in 2021, according to Women on Boards: Progress Report 2021, which was released by MSCI. However, this figure is still well below the global average of 24.5%, suggesting there is greater potential to be tapped.

See the table below for some of the female products and services providers on this new service’s watchlist: