Finance
Pickleball is just getting started in China
Sports club Suzhou Shishan opened the Chinese city’s first pickleball court in January 2024, according to the company.
Suzhou Shishan
BEIJING — While the U.S. pickleball craze is still going strong, China’s is only just getting started.
Online sales of pickleball paddles and related equipment in China have skyrocketed this year to an average of $1.2 million in monthly sales as of July — an increase of more than six-fold versus the year-ago period.
That’s according to data from WPIC Marketing + Technologies. The company helps foreign brands — such as Ohio-based food blender seller Vitamix and skincare brand iS Clinical from California — sell online in China and other parts of Asia.
“Pickleball’s rise in China reflects a broader shift toward active lifestyles and recreational sports participation,” said Jacob Cooke, co-founder and CEO of WPIC.
The racquet sport has been getting a lift from social media influencers and the resurgence of tennis in China, thanks in part to Chinese tennis player Zheng Qinwen winning the country’s first Olympic gold medal in tennis singles last summer, Cooke said.
Interest in tennis and pickleball in China started in 2023, accelerated in 2024 and is “still doing very well” this year, said Daniel Zipser, senior partner at McKinsey and leader of its Asia consumer and retail division. “We’re still now in the very strong acceleration growth momentum [period] for racquet sports more broadly.”
He pointed out that locals are not just increasingly picking up the sport, but also watching professional games more.
During the U.S.-based Professional Pickleball Association’s (PPA) first “Hong Kong Open” competition from Aug. 21 to Aug. 24, “there was actually a pretty big crowd that came out [to watch the] final gold medal matches,” said Patrick Yan, founder of The Brine Agency, which represents Asian pickleball players. “The entire tournament was maxed out and with a waitlist.”
Yan also noted that the Hong Kong region now has many more pickleball courts compared to only two when he visited in December and January.
The Hong Kong Open was part of the inaugural PPA Tour Asia that includes matches in Japan, Malaysia and Vietnam.
Jack Wong of Hong Kong won the men’s singles championship, while Roos van Reek of the Netherlands won in women’s singles. The PPA did not immediately respond to a request for comment on whether a “China Slam” initially set for early October was moving ahead as planned.
The PPA held its first U.S. pickleball tournament in Arizona in early 2020. The sport surged in popularity during the pandemic as communities quickly repurposed public spaces into free pickleball courts. Since then, pickleball has been the fastest-growing sport in the United States for four straight years, according to the latest Sports and Fitness Industry Association report in May.
Business angle
Pickleball’s recent growth in China has different business implications.
In contrast to U.S. suburbs, big Asian cities don’t tend to have large neighborhood spaces, Yan pointed out. “All these courts have to be built by people running businesses. They’re operating for profit…. People started seeing it could be a huge profit, all these competing businesses and startups.”
He added that the local pickleball tournament system is run by the national Chinese Tennis Association, making the sport’s development “quite systemized in comparison to other countries where it’s local organizations that have to organize and fund everything.”
Lu Bing, deputy head of the Suzhou Pickleball Association, said he learned about pickleball from an American friend in 2023. Subsequently, the local Shishan sports club that he is general manager of opened several pickleball courts, where hourly fees start at 60 yuan ($8.39). He added that many local schools are also encouraging students to play the sport by repurposing basketball courts and other facilities, he said.
Part of pickleball’s appeal in China is how easy it is for locals to learn the sport — some people still found tennis too hard after a few lessons at the sports club, he added.
Challenges and opportunities
While Lu said the club is an authorized sales partner for Joola, a U.S. pickleball brand, it’s less clear how easily other foreign brands and organizations can immediately tap into the trend.
Despite China’s large potential compared to Vietnam and Malaysia, which are Asia’s largest pickleball markets, it can be difficult for foreign businesses to navigate the Asian giant’s market due to language barriers and the unique WeChat messaging app-based ecosystem, Yan said.
“I know eventually probably some courts will go out of business and some will survive and take over the market in certain areas,” he said. “Because it’s so early into the market, a lot of people are trying to be the first mover basically.”
The surge of consumer spending on pickleball and other sports in China comes as overall retail sales have been subdued since the pandemic.
McKinsey’s Zipser said he’s “very confident” about a pickup in consumption in the second half of this year into 2026, as he thinks consumer spending is now more detached from depressed sentiment.
“The last two years the consumer was just waiting for the good old days to be back,” he said, pointing to hopes for a recovery in the property market and broad double-digit growth.
“People now have realized [that’s] not going to happen,” he said. “They’ve moved on. They’re no longer sitting there. … Life needs to go on.”
Cybersecurity and enterprise software stocks have been market dogs in 2026, with fears that AI will wipe out a wide range of companies in the enterprise space dominating the narrative. But they snapped a brutal losing streak this past week, joining in the broader market rally that saw all losses from the U.S.-Iran war regained by the Dow Jones Industrial Average and S&P 500.
Cybersecurity has been “a victim of some of the AI-related headlines,” Christian Magoon, Amplify ETFs CEO, said on this week’s “ETF Edge.”
It wasn’t just niche cybersecurity names. Take Microsoft, for example, which was recently down close to 20% for the year. Its shares surged last week by 13%.
A big driver of the pummeling in software stocks was a rotation within tech by investors to AI infrastructure and semiconductors and some other names in large-cap tech, Magoon said, and since cybersecurity stocks and ETFs are heavily weighted towards software companies, they were left behind even as those businesses continue to grow on a fundamental basis.
But Wall Street now has become more bullish with the stocks at lower levels. Brent Thill, Jefferies tech analyst, said last week that the worst may be over for software stocks. “I think that this concept that software is dead, and then Anthropic and OpenAI are going to kill the entire industry, is just over-exaggerated,” he said on CNBC’s “Money Movers” on Wednesday.
“Big Short” investor Michael Burry wrote in a Substack post on Wednesday that he is becoming bullish about software stocks after the recent selloff. “Software stocks remain interesting because of accelerated extreme declines last week arising from a reflexive positive feedback loop between falling software stocks and changes in the market for their bank debt,” he wrote.
The Global X Cybersecurity ETF (BUG), is down about 12% since the beginning of the year, with top holdings including Palo Alto Networks, Fortinet, Akamai Technologies and CrowdStrike. But BUG was up 12% last week. The First Trust NASDAQ Cybersecurity ETF (CIBR) is down 6% for the year, but up 9% in the past week.
Piper Sandler analyst Rob Owens reiterated an “overweight” rating on Palo Alto Networks which helped the stock pop 7% — it is now down roughly 6% on the year. Its peers saw similar moves, including CrowdStrike.
Performance of Global X cybersecurity ETF versus S&P 500 over past one-year period.
Magoon said expectations may have become too high in cybersecurity, and with a crowding effect among investors, solid results were not enough to to push stocks higher. But the down-and-then-back-up 2026 for the sector is also a reminder that when stocks fall sharply in a short period of time, opportunity may knock.
“Once you’re down over 10% in some of these subsectors, you start to see the contrarians start to say, ‘well, maybe I’ll take a look at this,'” Magoon said.
He said AI does add both opportunity and uncertainty to the cybersecurity equation, increasing demand but also introducing new competition. But he added, “I think the dip is good to buy in an AI-driven world,” specifically because the risks to companies may lead to more M&A in cyber names that benefits the stocks.
For now, investors may look for opportunity on the margins rather than rush back into beaten-up tech names. “I think investors are still going to remain underweight software,” Thill said.
But Magoon advises investors to at least take the reminder to keep an eye on niches in the market during pronounced downturns. “The best-performing are often the least bought and do the best over the next 12 months versus late-in-the-game piling on,” he said.
While that may have been a mindset that worked against the last investors into cybersecurity and enterprise software in mid-2025 when the negative sentiment started building, at least for now, it’s started working for the stocks in the sector again.
Meanwhile, this year’s biggest winner is also a good example of what can be an extended trade in either a bullish or bearish direction. Last year, institutional ownership of energy was at multi-year lows, Magoon said, referencing Bank of America data. “Reverse sentiment can be a great indicator,” he said.
But he cautioned that any selective buying of stocks that have dipped does have to contend with the risk that there is a potentially bigger drawdown in the market yet to come in 2026. That is because midterm election years historically have been marked by large drawdowns. “If you think it is bad right now, it could get a lot worse,” Magoon said. But he added that there’s a silver-lining in that data, too, for the patient investor. The market has posted very strong 12-month returns after midterm election drawdowns end. So, for investors with a longer-term time horizon and no need for short-term liquidity, Magoon said, “stick in there.”
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New innovation in the exchange-traded fund industry could come at a cost to investors during extreme conditions.
According to MFS Investment Management’s Jamie Harrison, ETFs involved in increasingly complex derivatives and less transparent markets may be in uncharted territory when it comes to violent downturns.
“Those would be something that you’d want to keep an eye on as volatility ramps up,” the firm’s head of ETF capital markets told CNBC’s “ETF Edge” this week. “As innovation continues to increase at a rapid pace within the ETF wrapper, [it’s] definitely something that we advise our clients to be really front-footed about… Lack of transparency could absolutely be an issue if we’re going to start seeing some deep sell-offs.”
His firm has been around since 1924 and is known for inventing the open-end mutual fund. Last year, ETF.com named MFS Investment Management as the best new ETF issuer.
“It’s important to do due diligence on the portfolio,” he said. “Having a firm that has deep partnerships, deep bench of subject matter experts that plays with the A-team in terms of the Street and liquidity providers available [are] super important.”
Liquidity as the real issue?
Harrison suggested the real issue is liquidity, particularly during a steep sell-off.
“We’ve all seen the news and the headlines around potential private credit ETFs. That picture becomes much more murky,” he added. “It’s up to advisors, to investors [and] to clients to really dig in and look under the hood and engage with their issuers.”
He noted investors will have to ask some tough questions.
“What does this look like in a 20% drawdown? How does this liquidity facility work? Am I going to be able to get in? Am I going to be able to get out? And if I’m able to get out, am I able to get out at a price that’s tight to NAV [net asset value], and what’s the infrastructure at your shop in terms of managing that consideration for me,” said Harrison.
Amplify ETFs’ Christian Magoon is also concerned about these newer ETF strategies could weather a monster drawdown. He listed private credit as a red flag.
“If your ETF owns private credit, I think it’s worth taking a look at, kind of what the standards are around liquidity and how that ETF is trading, because that should be a bit of a mismatch between the trading pace of ETFs and the underlying asset,” the firm’s CEO said in the same interview.
Magoon also highlighted potential issues surrounding equity-linked notes. The notes provide fixed income security while offering potentially higher returns linked to stocks or equity indexes.
“Those could potentially be in stress due to redemptions and the underlying credit risk. That’s another kind of unique derivative,” Magoon said. “I would very closely look at any ETF that has equity-linked notes should we get into a major drawdown or there be a contagion in private credit or something related to the banking system.”
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