Imagine a consumer base roughly the size of the adult population of the United States. According to Bernstein, this is equivalent to the size of China’s “high-end” consumer population – and it is a “huge” opportunity for high-end sportswear by foreign companies. Analyst Aneesha Sherman and a team wrote in a report Tuesday: “Given its strong earnings potential, the Premium segment is much more immune to near-term unemployment headwinds and concerns. macro is affecting average and low-end consumers”. By US standards, it doesn’t take much to be considered premium in China. Bernstein’s analysis includes two categories: the top 93 million consumers earn an average of $95,000 in gross annual income, and another 170 million consumers earn an average of $26,000. That’s a total of 263 million people. The report says this market segment accounts for about a fifth of China’s 1.4 billion people – and its size is expected to grow more than twice as fast as the mainstream market. About 258 million people in the United States are 18 years of age or older, according to the US Census Bureau. Income and cost of living vary widely in China. But many still earn relatively little. In the first quarter, the official median disposable income of city dwellers equated to $1,739. The Bernstein report said the population of middle-class consumers is expected to grow more slowly. For international companies in this segment, analysts point out that there is stiff competition from rising Chinese brands. Plays Two of the top players in the country, Li Ning and Anta Sports, are listed in Hong Kong. Li Ning said its revenue, mainly from footwear and apparel, grew 14.3% in 2022 to 25.8 billion yuan ($3.61 billion) – despite the pandemic. Similarly, Anta Sports said its Anta brand revenue grew 15.5% in 2022 to 27.72 billion yuan. Anta also announced on Wednesday that Kyrie Irving will become creative director of the company’s basketball line – with plans to launch branded shoes in the first quarter of 2024. Miao Kun, 30, works in the field of sports media in Beijing, said that since then After the pandemic ended, more people in China are more interested in going out to play sports. He agrees that in China, sportswear brands have similarities with local impressions of car brand ratings. Adidas and Nike, he said, are like Benz, BMW, the most premium, while other brands are like Audi or Toyota. That creates distinct market segments – by price. For Nike and Adidas, even their lowest prices are double those of local rivals, Bernstein analysts said. They note that a pair of Nike sneakers can start as low as $50 in China, while a pair from Anta is only $25. “The growth potential of China Premium is a key factor in our Outperform ratings for Nike and Adidas, both of which have close to 20% exposure to China,” the report said. Analysts have a $134 price target for Nike, up more than 20% from Thursday’s closing price. They expect U.S.-traded shares of Adidas to be up nearly 15 percent from Thursday’s near $112.32 per share. Bernstein has a 190 euro price target for Adidas’ shares in Germany. And Hoka — the Deckers-owned luxury shoe brand that posted $1.4 billion in net sales in the 12 months ended March — is eyeing an expansion in China with a few stores selling physical retail in major cities and the presence of e-commerce. Management said on an earnings call in May that Hoka was “getting solid success” in China and acknowledged the company could “accelerate faster”. However, focusing only on the high-end growth segment can overlook the fact that many Chinese consumers still live in smaller cities. Less developed areas, outside of big cities like Shanghai or Chengdu, account for about 1.2 billion people and 17 trillion yuan in consumer spending. That’s according to data shared by a local businessman and cited by Beijing-based BigOne Lab, an alternative data company whose backers include S&P Global. BigOne’s analysis indicates that the less developed market is where e-commerce site Pinduoduo and emerging coffee chain Cotti Coffee are entering, alongside major Chinese cities. — Michael Bloom of CNBC contributed to this report.