With more sports fans than the entire population of North America, it’s easy to see the business appeal of China.
Fanatics is taking its booming licensed sports merchandise business to China. Sources close to the deal say Fanatics expects the joint venture business alone to be over $1 billion in China. Fanatics China, launched in partnership with Asia-focused investor Hillhouse Capital, will be based in Shanghai.
“The interest overall in the country around European football, and American sports, is growing,” Zohar Ravid, Fanatics’ head of international corporate development, told Reuters.
The increasingly sports-obsessed country of 1.4 billion presents a massive opportunity:
- China has an estimated 500 million NBA fans.
- At least 104 million people in the country had at least one fitness app in 2019, and the sportswear market was projected to reach $48 billion in 2020.
- Nike’s 2020 Q3 revenue in China increased 24% to $2.3 billion.
Rumors are buzzing that Fanatics could go public soon. It was valued at $6.2 billion, up 38% from its previous valuation, on a $350 million Series E funding round last August. Major League Baseball and the NFL invested a total of $150 million in the company in 2017.
“While an IPO is clearly an available path to us, there is no update on any timeline,” said a Fanatics spokesperson. “Our focus remains on building a great global company and strengthening our vertical commerce business model.”
Hillhouse, a 50% partner in Fanatics China, intends to foster connections with e-commerce giants like Tencent and Alibaba.
“The local expertise is really, really why we’re relying on Hillhouse,” said Ravid.