Many people see marathons as a weekend interest, a form of weekly exercise, or even a competitive sport perhaps, but in the eyes of Chang Chun, marathons – especially in China – are a multi–milliondollar business opportunity.
Chang Chun is the co-founder and CEO of Runnar, a game-changing sports-industry focused software as a service (SaaS) catering to marathons and other competitive sports racing events. As a semi-professional athlete, sport has been an integral part of Chang’s life. As an undergraduate student at Beijing Sports University he studied the intricacies of sports management, or lack thereof at the time. Working in various industry related roles, including as a facilities management assistant at the2008 Beijing Olympic Games, fuelled his love and passion for the industry. But he felt there was something lacking in the China market.
An emerging industry
The 2008 Beijing Olympics was perhaps the first time the world took note of Beijing and modern China. The Chinese lion was just rousing from its long slumber, stretching its legs as it prepared to take the world by storm. Likewise, the sports administration practices there at the time still mirrored the soviet style of government–led sports programs: while they produced select top athletes, there was almost no focus on health and lifestyle-oriented programmes for the masses – it was all about chasing Olympic medals. On top of that, there was also the unspoken knowledge of systemic corruption, along with the stereotype of unemployed retired athletes scraping by on the fringes of society. Sports management still had a very long way to go.
With several years of work experience under his belt and a bachelor’s degree in sports management, Chang knew he needed even more exposure to the outside world. He had already seen the success of much smaller countries, and it didn’t come down to genetics and/or government programmes alone – holistically healthier nations produced better athletes. He may not have been able to articulate it at the time, but Chang knew there was an opportunity in the Chinese market, but he needed more knowledge and experience. Chang decided to venture to the United States of America, where he knew he could learn a lot more about the administration of sports at Springfield College in Massachusetts – the birthplace of Basketball, the progenitor of Volleyball, and home to thousands of athletic achievements. Concurrently, he would work as an events manager at Disney’s ESPN Wide World of Sports, the largest sports complex in the world, personally involving himself in the institution’s hosting of more than 230 events each year, which attracted close to 400k athletes every year.
His time at Disney served as an important learning experience that would teach him two very important things. Firstly, Chang discovered the growing importance of the internet and technologyinfrastructure in the sports industry. The future development of sports would benefit hugely from the co-development of specialised technology. And secondly, he learnt about the power of combining Sports together with Tourism. It was a step away from the Chinese approach to sports management. In America, there was a focus on community, and through this, the shared experience of sport among athletes, families and friends. While the socio-cultural aspects were self-evident, Chang’s new understanding of the American system revealed a new commercial aspect to thedevelopment model for Chinese sports management – one that was largely independent fromgovernment funded programmes, and was not only commercially viable, but was also whollysustainable.
It was a life experience that would round out his vision for things to come.
“After that experience, I found it very hard for me to fully maximise my value in the US. I saw that sport was, and still is undervalued in China.” Said Chang. “I decided to go back to China. My driving force was a desire for sports to be more valuable to Chinese people’s daily lives. For Sports to become a tool and platform for people to live happier to healthier lives.”
Returning to China in 2013, Chang notes there were only 35 marathon events. It was a gamble to be sure, but having experienced the euphoria of the Beijing Olympics, and being part of the risingChinese middle class, he knew there was a growing appetite. Chang could sense that change was imminent. When Chang returned to China, he focused on the concentrated demands of a core group of committed marathon enthusiasts. At the time, local participants were more interested in overseas events than local events, unsurprising given the limited number of professionally organised events. But it was difficult for local Chinese, many who could not communicate in English, to even find these overseas events, let alone enter and to pay for their race fees.
Runnar was borne out of these pain points for competitors, but before long, it was evident that Chang’s own background, experience and skillset in event management gave the company a distinct edge – it could serve both ends of the market. They created a SaaS that was capable of serving the entire competitive racing ecosystem.
At the participants’ end, Runnar’s WeChat mini programs centralises all events onto one site, so that competitors are better able to identify, locate and enter races. They can register in any of the races directly through Runnar’s website or mini programs. Thereafter, participants can buy equipment from Runnar’s specialty ecommerce store located on the same site. But the flow cycle doesn’t end at moment of purchase. The nature of racing requires each competitor to be physically present at therace destination, during which, Runnar provides online support, services and content through their mini programs to provide participants with smooth experience, including such as transportationcontent, push notifications with information relating to weather, race gear and clothing suggestions.
At the event organizers’ end, Runnar’s B2B offerings are based on their cloud ERP system, RunnarCloud. Chang understood that race organizers are generally athletes themselves, more interested in the racing, competition and logistics, rather than the technical marketing and software backend. Runner acts as a web developer for race events, something which is typically time and resource demanding, and expensive too (on average 200k RMB per month, with no certainty of meeting their needs).
“Our business partners use Runnar Cloud, an Integrated sports event management system that can setup a unique website in 10 minutes at one-twentieth of the price. It is a huge boost for clients in terms of marketing, but also integrates our big data analytics systems.” Says Chang.
Marathons attract large numbers of entrants and good participation rates. Runnar uses big data to connect data such as previous race results and previous running tracks, to maximise operational efficiency of their clients’ events. They pull source data from two sources: registered participants’ details, and public running results from the China Athletic Association. To date, the application of that data to events have been a breakthrough for clients.
“In that past, when our business partners organised races, they would have to guess when and where to place water stations. It was a guess at best because there are runners of various pacing. Oftentimes, there would be nothing left for the slower runners, who had paid the same race fees but received none of the benefits or race support. It was just a bad user experience.” Says Chang. “Butour AI algorithm predicts everybody’s pace; it also predicts how many runners will pass each stop at a given time. For example, big data can tell organizers there will likely be 500 runners coming through ‘Water Station A’ in the next half hour, and another 300 the half hour after.”
Runnar also provides hardware, ID checking devices and goody bag management systems for race organisers. The cumulative effect is reduced costs and increased operational efficiencies for clients, while maximising their marketing value. On the back of these elements, Runnar has grown exponentially, but Chang attributes a great deal of its success to its humble beginnings in a small 4-table room at Ucommune in Beijing.
“In September 2015, we signed on with Ucommune. After we moved in, I seemed as though everything accelerated. Ucommune brought a lot of high-quality support and services, including such things as legal, accounting, and advertising. At that time there were many community and political leaders visiting too, and that helped us to build up governmental opportunities.”
The company has now extended beyond marathons to include events in fields as diverse as trail racing, and kayaking events. Currently, there are multiple races for more than 25 different sports throughout the year and there are plans for much more.
“I have become an even stronger believer in the value of sports having seen it in the US.” Says Chang. “But when I look at our generation in China and our kids in China, they are not fully enjoying the value of sports.”
This too, played a big part in Chang’s motivation to start his business in China. With the mission of improving the wellbeing of people, Runnar aims to facilitate the Chinese sports industry to serve the people in China. The idea of sports has dramatically transformed with the rising incomes. People now have disposable incomes and are moving from being mere spectators to active participants.
“When I was at Beijing Sports College, people would think that I was not smart enough to be at another college. But after 40 years of economic growth, people are finally beginning to understand the importance health.” Says Chang. “People are telling themselves ‘I need to get healthy, I gottastop drinking’. Their mentality is changing.”
And he is right. Sport is still relatively undervalued in China, but things are changing. In 2016, the China National Tourism Administration and the General Administration of Sport of China launched a series of measures to encourage cities to combine sports tourism with public recreation, andincreased the construction of public facilities for sports tourism. It was in the hope of achieving “Five 100” objectives by 2020: “100 sports tourism destinations with significant influence”; “100 national level sports tourism demonstration bases”; “100 sports tourism boutique events”; “100 sports tourism boutique routes”; and, “100 sports tourism enterprises with great awareness and high market competitiveness”.
By 2018, there were 1,583 marathon events, compared to the 35 when Chang return home from the United States in 2013. The upside is huge too. Along with this change is the idea of sports tourism. According to Chang, there were 216 people per one million people in China who ran a Marathon, last year. Compared to Japan, there were 2,760 people for every million. And in the U.S. there were 1,528 marathoners for every million. If these numbers are correct, a huge growth opportunity is waiting in China.
“Sport provides valuable personal growing experiences and teaches kids how to face challenges and overcome failure. They learn how to collaborate with others and to take personal success to a greater level.” Says Chang. “We are in a golden era in China for sports tourism.”
Along with its events focused software business units, Runnar is building an offline business too, it has been approached by a number of big name property developers and local governments and has plans to build at least five sports and wellness resorts in China in the next five years; in Beijing, the Yangtze Delta region (Shanghai and Nanjing), the Greater Bay Area (Guangzhou, Zhuhai and Hong Kong) and Chengdu, as well as their existing resort in Sanya, Hainan.
Changing the Game of the Future
Runnar has so far accumulated more than 500 event companies in China, more than 700,000 users,as well as a growing list of registered customers buying equipment, and booking tours. And because they are the only sports events organiser to serve both the businesses and consumers, they have four distinct advantages:
1. With each race, they increase their user database, which in turn feeds into their AI platform. This allows them to enable their business clients, effectively creating a positive feedback loop.
2. Innovative research and development in their proprietary AI software technology has seenRunnar forge ahead of the competition.
3. A focus on the development of intellectual property – especially trademarks, event IPs andexclusive partnerships puts Runnar in a dominant position in the nascent participatory sports event space in China. Currently Runnar is the only Chinese company to partner with Thailand’sThanyapura Health & Sports Resort, the leading sports resort brand in the world.
4. Cross border partners – hoteliers, sports, real estate – and an internationalised team withpeople from Japan, UK, and the US means Runnar has acquired and built their experience and knowledge of the booming international sports tourism market (All team members are required to run a marathon within the first 6 months of joining the company, unless you have a doctor’s certificate!)
“Putting your foot on the ground to start a business is a different game. As a company you must develop your own advantages and core competencies to survive. After the past seven years, we are still doing that. Currently we are taking the company to the next level.” Says Chang.
For the Game Changers of the Future
Runnar is affecting change in the sports events industry at a pace and rate of change that is befitting of the Chinese market. But it’s never smooth sailing. Chang knows the importance of having bigaudacious goals, but he insists the best step forward is to first find the smallest and narrowest entry point to keep the competition out. Chang advises to fully utilise the resources you have around you.
Secondly, as a game-changing entrepreneur Chang says the biggest risk of failure comes from losing self–confidence. “Finding ways to build up self–confidence is key. We have to sacrifice salaries, family, vacations, many things. You will always have different challenges, so it is imperative that youmaintain a strong sense of self-confidence. Otherwise you will be easily beaten up and to quit.” Says Chang. “I recommend participating in sports – it will help build your self–confidence and energy.”