Brands continue to drive global sportswear market
The world market for total active sportswear and athletic footwear in 2003 amounted to US$145 billion, meaning that US$23 was spent on behalf of every man, woman and child in the world. However, what sets sportswear chains apart from retailers of other clothing categories, is that they are primarily selling brands, as opposed to own-label merchandise.
Of all of the areas of the international clothing market, the active sportswear and athletic footwear sectors are amongst those most heavily relying on brands and image. Consumer choice is often connected to an admired sportsperson who wears the brand, and the general image linked to a particular line of clothing.
According to a new report published by just-style.com, while the majority of clothing types see a balance between retailers' own-branded merchandise, manufacturers' brands, and unbranded products, more than 75 per cent of the active sportswear market is dominated by branded items and almost 80 per cent of athletic footwear is sold under brand names.
The report, 'Global market review of active sportswear and athletic footwear - forecasts to 2010,' notes that specialist retailers do exist in the field, such as the US chains Foot Locker and Sports Authority and UK companies Blacks Leisure and JD Sports. There are also outdoor pursuits specialists including the Brigham Ellis, and Field and Trek companies in the UK.
However, what sets sportswear chains apart from retailers of other clothing categories, is that they are primarily selling brands, as opposed to own-label merchandise - a key indication of the importance of customer loyalty and branding within the sportswear and sports footwear sectors.
While ever-growing number one player Nike holds a 15 per cent portion of the market and 20 per cent of the branded market, Adidas claims a 9 per cent share of the market and 13 per cent portion of the branded market, and Reebok has 5 per cent of the market and 7 per cent of the branded market.
The three brands as a whole claimed 29 per cent of the total market for sportswear and 40 per cent of the branded market in 2003.
Below the three top names in the market are a multitude of brands - some of the best known being brands such as Puma and Head - which continuously strive to be 'the best of the rest.'
Commercially, much of Nike, Reebok and Adidas' success can be attributed to their long-standing connections with sports stars by individual and club sponsorships. Football, in particular, stands out as one of the singular most important factors to Nike and Adidas' success.
However, also vital is the publicity and prestige attached to the sponsorship of individual sports stars, and especially those of an 'international superstar' quality, such as the ubiquitous David Beckham.
The importance of picking the right celebrity is perhaps a lesson that Nike has yet to learn, with a string of embarrassments over sponsored stars' poor form or drug scandals leading to the branding 'the curse of Nike.'
However, with the world's ongoing obsession with the cult of celebrity, and while the US$17 billion deals keep rolling in, Nike has yet to suffer a serious loss of face.
Although Adidas is big on equipment sales, as well as football, the brand is about a lot more than elite sports, targeting athletes at every level as well as the trendier crowd.
Reebok, having seen its market share slip to just 33 per cent of what it was in the early 1990s, has been turning its focus to event sponsorship to boost its performance message - a tactic that Adidas is more than adept at. However, the brand, although clearly determined to catch up with the achievements of its elders and return to the success of the 80s and 90s, has yet to recapture the glory of its golden years.
Affluent countries lead purchases
In line with most of the clothing market in general, the purchase of active sportswear is weighted heavily toward more affluent countries.
For example, while North America contains 5 per cent of the world's population and boasts 23 per cent of the total consumption of active sportswear, Latin America, which has a population of 9 per cent, accounts for only 6 per cent of consumption.
However, both Latin America and Asia's growing enthusiasm for western-produced sportswear is reason to believe that the active sportswear and athletic footwear markets will, by 2010, outperform the clothing market as a whole.
Key growth area
Sportswear is seen as a key growth area for clothing and footwear over the next five years for reasons including growing international interest in sports, the tendency for people to stay loyal to their 'favourite' sports brands, and an increasing younger population.
just-style predicts that, by 2010, US$23.70 of active sportswear and athletic footwear will be bought for every person in the world, compared with US$22.70 in 2003.
After consulting the key sportswear brands as to which events over the next five years they expect to push up growth in the market, just-style pinpointed the football world cup in 2006, the football European cup in 2008 and the Olympics in 2008 as being the most important.
In terms of product development, innovation within the sportswear sector seems to be more about following than about leading. For example, when a key producer such as Nike comes up with a cutting-edge design or fabric, so the second-rate manufacturers will follow suit with attempts at innovation.
Within the active footwear market, innovation often concentrates on cushioning and new methods to control the amount of cushioning needed by the athlete.
However, with the recent launch of the first computerised trainers by Adidas - Adidas-1 - which claim to adjust their cushioning by measuring any changes in compression every time the wearer's foot hits the ground, the door has perhaps been opened for a new generation of active footwear.
Adidas, certainly, boasts that the Adidas-1 shoes are just the first in a long line of design revolutions, with a future development claimed to be a shoe that connects wirelessly to monitors to allow the athlete to analyse his or her performance or speed.
With the exception of 'thinking' trainers, the active sports apparel realm is perhaps more genuine in its developments than the active footwear sector, with many innovations drawn from space age science.
Fabric improvements, in particular, are a constant source of interest and research, with every Olympic games spawning innovations in the breathability, waterproofing, sweat control, and stretch ability, of materials.
The 2008 Olympics in China is likely to exacerbate the fierce interest in sports brands around the world and throw up yet more innovations, and in the developing world especially, where Nike and Adidas conjure up images of the rich and the glamorous.
As Asian economies grow more affluent, they will become better equipped to copy their western idols by purchasing sportswear products made by their favourite brand.
For more information on just-style's report 'Global market review of active sportswear and athletic footwear - forecasts to 2010,' click here
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