Sportswear market to sprint past recession

7 August 2009 | Source: just-style.com

The ways in which the current recession will impact consumers' interest in playing sports, working out or getting regular exercise - and of course buying the kit to take part - forms the cornerstone of a new just-style report on the active sportswear and athletic footwear market.

With uncertainty in the workplace and the overall economy at an all-time high, are consumers of sports clothing and athletic footwear still active participants in performance sports and buying what their sporting idols tell them to buy?

Do they take part in 'soft' sports, or are they simply passive 'couch potatoes' watching their sports on TV?

These are some of the questions tackled by a new just-style report: 'Global market review of active sportswear and athletic footwear - forecasts to 2016 (2009 edition)'.

Four time periods
To enable the magnitude of the effect of the economic downturn to be seen clearly, the market analysis has been split into four time periods.

In the historic growth phase from 2003-2007, the combined market grew from US$132.50bn to US$144.91bn, a rise of 9.4%.

During this time, the athletic footwear market was the powerhouse of growth, expanding almost exactly twice as much as the active sportswear sector in terms of dollar value.

In the current recession phase, the combined market is expected to fall from US$144.91bn in 2007 to US$142.13bn in 2009.

Within this total global decline, it is the developed world that has suffered first and most. The active sportswear market will stagnate, the just-style report says, while sales of athletic footwear will fall by 2.2% between 2007 and 2009.

Within that global total, and by region, there will of course be winners and losers. Hardest hit will be North America, Japan, Korea and Europe.

In the recovery phase from 2009-2012, the combined market for active sportswear and athletic footwear is forecast to move from US$142.13bn to US$153.52bn. Growth will accelerate each year, rising to 3.6% in the Olympic year of 2012.

The market for active sportswear will grow from US$53.87bn to US$57.78bn, driven by the demand for trainers. Sales of athletic footwear will also surge back to US$95.74bn in 2012, and world prices of athletic footwear will be fairly stable.

Looking ahead to the long term future phase, from 2012-2016, the combined market is expected to grow from US$153.52bn to US$163.55bn in the period after the London Olympics.

The 'rest of the world' - excluding North America, Japan, Korea and Europe - is forecast to grow its combined market by US$3.73bn, and will also be the fastest-growing region too.

Recessionary impact
In this fourth edition of just-style's report, the effect of the current economic recession means 2010 now has the biggest downwards revision of the current forecast over the previous one.

After that the active sportswear and athletic footwear markets show some recovery.

The fourth edition figure for market value in 2016 (US$163.55bn) is similar to the third edition figure for 2013 (US$164.20bn).

The credit crunch has effectively put the sportswear clock back by three years, the report concludes.

Supply chain
It is impossible to consider the sportswear supply chain without starting with China, it being the world's largest exporter of textiles and clothing.

This leadership is primarily due to China's relatively low wage costs. However, China is no longer the lowest-cost country. That dubious honour probably belongs to Bangladesh. In China the weekly wage is GBP12. In Bangladesh it is about half of that.

In the last three years, and in particular as a result of the run-up to and then the aftermath of the Beijing Olympics, China has increasingly become the subject of major sportswear brands attentions as a market.

When the Olympics started in August 2008, just-style reported that the advertising battle for the market between leading sports brands Nike and Adidas was gaining greater prominence, with both companies claiming market dominance in China.

Overall in the world, brands have 73% of the active sportswear market, and 80% of the athletic footwear market.

Adidas and Nike are believed to control 40% of the world wholesale market for active sportswear and athletic footwear, and a little over half of the branded segment.

As for the future of active sportswear and athletic footwear, after the recovery from the current recession, just-style believes that the sports clothing and footwear industries are excellent businesses to be in.

A combination of globalisation, the casualisation of clothing, and the lure of sport on TV will drive industry growth in developing countries. 

For more information on the 'Global market review of active sportswear and athletic footwear - forecasts to 2016,' click here

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