The budget outdoor wear seller and IPO candidate is growing fast, but comes with red flags in the form of high inventories and long turnover times

image credit: Author

Key Takeaways:

• GoNature has filed for a Hong Kong IPO, boasting a 2.8 billion yuan valuation and investors including Tencent, Qiming and Lee Kai-Fu's Sinovision
• The outdoor apparel maker will have to prove that it can sustain its sprint despite weak R&D spending, no manufacturing of its own, and a heavy reliance on key influencers

The avid outdoor person doesn't give up easily, often trying several times before scaling a peak, catching a prize fish or completing a racecourse. The same could be said of GoNature Outdoor Sports Group Co. Ltd., which last week applied a third time for a Hong Kong IPO, aiming to impress investors with its strong growth fueled by booming interest in the outdoors among young Chinese millennials and Gen Z-ers.

Previously known as Pelliot Outdoor Sports Group, GoNature's latest prospectus shows a physically fit company both in terms of revenue and profits.

Between 2023 and 2025, its revenue tripled from 908 million yuan ($134 million) to 2.79 billion yuan, averaging annual growth of 75%. Its net profit more than doubled over that time from 152 million yuan to 356 million yuan, as its gross margin rose from 58.2% to 63.7%. The listing boasts heavy hitters CICC and Citic Securities as joint sponsors, signaling it could be relatively large, perhaps raising up to $100 million.

The IPO would make GoNature the first of China's domestic outdoor wear retailers to tap offshore capital markets, though it's not the only one from that category aiming for that distinction. Rival Beneunder has also applied for Hong Kong IPO, it has yet to complete its listing.

GoNature's pre-IPO investor list is quite impressive, including Tencent, Qiming Ventures and Lee Kai-Fu's Sinovision – backers usually more associated with tech companies. Tencent invested 300 million yuan in GoNature's latest funding in March 2025, while Qiming put in 150 million yuan and Lee's SDF LB invested 70 million yuan at that time. That funding valued the company at 2.8 billion yuan.

GoNature uses a direct-to-consumer business model, getting almost 70% its sales online. It also has a small but growing network of retail stores, representing 18.1% of sales, with distributors and wholesale buyers accounting for the remaining 12.3%.

What makes GoNature unusual is its all-in commitment to building its brand through intense marketing. The company's sales and marketing team of 570 accounts for more than half of its workforce of 1,074. By comparison, its R&D and design team has a staff of just 50.

The company has partnered with film and TV celebrities for the last decade, but its breakthrough hire was actor and singer Cheng Yi, known for his roles in Chinese history dramas. Cheng became its global brand ambassador in October 2024. Within just 14 hours of the announcement, GoNature's online sites had 1 billion views and 200 million interactions, and generated sales worth over 60 million yuan in gross merchandise value (GMV), according to the company.

GoNature uses a similar approach as that by international brands, which typically contract out manufacturing and achieve high margins by selling at premium prices leveraging a brand's image. By comparison, most domestic Chinese apparel brands have their roots in contract manufacturing for others, and have struggled to establish their own independent brands. That makes GoNature a relative rarity on China's outdoor apparel scene with its focus on brand building and outsourcing of its manufacturing and logistics.

Brand management transition

The company got its start in 2006 as a supply chain manager for other brands, and made the jump into the higher-margin branded business in 2012 with the launch of its own Pelliot products, named for early 20th century archeologist and adventurer Paul Pelliot. It continues to use the Pelliot brand, of Boxihe in Chinese, but changed the company name to GoNature in January this year.

GoNature describes itself as an asset-light company, with payments to its 155 contract manufacturers accounting for 36.3% of revenue in 2025. That percentage has been coming down, from more than 40% in the previous two years. But the cost of finished goods has risen from 12.3% of total cost of sales to 41.7% in 2025, as suppliers charge more for their products.

GoNature was relatively small as recently as 2022, when its annual sales were about 300 million yuan. But things began to take off as it started moving upscale, transforming from a business selling mainly modestly priced windbreakers to competing with high-end outdoor apparel manufacturers like the Arc'teryx, part of Amer Sports (AS.US), which is owned by Chinese sportswear maker Anta (2020.HK).

GoNature is currently seen as a budget version of Arc'teryx, building a reputation on its weatherproof hardshell jackets that have become popular since 2023. Arc'teryx has been enormously successful in China, notorious for its hardshell jackets that sell for $1,000 each and have become must-haves for China's urban outdoor enthusiasts.

While GoNature has kept manufacturing costs roughly at the same proportion of sales, the same isn't true for its sales and distribution expenses. Those expenses ballooned from 277 million yuan in 2023 to just over 1 billion yuan in 2025, rising from 30.5% of revenue to 37.9% over that time. That's just one of several warning signs that GoNature may be having difficulty managing costs with its recent rapid expansion.

The company's inventory ballooned from 238 million yuan in 2023 to 870 million yuan in 2025, and jumped another 40% from that to 1.2 billion yuan by March this year. More worrying, inventory turnover days increased from 189 in 2023 to 264 days in 2025, meaning that goods are currently sitting in GoNature's warehouses for up to nine months before being sold.

The company's R&D expenses are also meager, at just 74 million yuan in 2025, equal to 3% of revenue. That seems quite small for a company that aspires to be known for its cutting-edge products using advanced fabrics and lightweight design.

GoNature is also facing an increasingly competitive field. Its outdoor jackets are priced between 400 yuan to 1,000 yuan, or around $60 to $150, lower than competitors like Arc'teryx and North Face, a subsidiary of V.F. Corp. (VFC.US). But its prices are well above those of local market leader Camel, whose products range from 300 yuan to 700 yuan.

The competition is also likely to further intensify as international brands like Decathlon and Descente expand into lower-tier markets, and as domestic sportswear brands like Xtep (1368.HK) and Li Ning (2331.HK) explore the outdoor wear market. All those companies are chasing a Chinese market of 400 million people who participated in outdoor sports as of April last year, with the figuring growing 13.5% annually, according to the China Outdoor Sports Industry Development Report.

That could make GoNature's timing just right if it succeeds on its third IPO attempt, which would hit the market as China's outdoor sports continues to race ahead.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.