We all know many things about sports and performance apparel market from our daily life. When we talk about sports apparel you can think well-known brands like Nike, Adidas, Puma, etc. However, performance apparel is all about performance products. Of course, Nike & Adidas have also performance products too, but brands like Under Armour positions itselves as a performance apparel brand from their clothing to shoes products. Performance apparel is a sub-segment of sports apparel market. In this article we will review sports apparel market and it’s sub-segment performance apparel.
Since we know the distinction, talking about market size and 5 year CAGR expectations of global sports apparel market. Eofy 2018, sports apparel market size calculated as $167.7 B. For 2026, expected CAGR is %5.1. This is important because sports apparel market is performing much better than the clothing market. Specially, after important increase in disposable income in China & India for the past 10 years, their investment apparel significantly increased. Today, Asia-Pasific countries are creating the %7 of the total market. North America & Asia-Pasicif countries are creating %60 of the total market size.
When we talk about retail industry, price wars and high number of rivals are coming to our article by default. As highly competitive retail industry, sports apparel market has a highly powerful consumer. Switching cost is low between the similar segments and naturally it force brands to battle in pricing strategies. Basically, it is easy to enter industry, but production or wholesale costs are bit higher when we talk about performance apparel. But it’s all about industry dynamics. What about consumer side?
Do you know a brand which copy the high fashion designs and sell those designs for an affordable price? Yes, you know the name. May be your tailor is duplicating high fashion dresses for you. Those examples are not showing counterfeit products. Redesign? May be… Netflix is shooting the scandinavian TV series in USA with the same scenario and character names and they call it “Replay”. However as far as we know, those “redesign” brands are not paying any fee to original high fashion brands. But the counterfeit products can be anywhere. Specially, when the disposable income is start to decrease in a region, counterfeit products tend to show increasing trend.
Image is showing some counterfeit product examples from Thailand. Looks pretty bad, but doesn’t have to be. Region to region, producer to producer, quality of counterfeit market is increasing too like the example photo from Kuala Lumpur. Commercial brands are have to fight with counterfeit stores in many regions especially in low disposable income areas. Here is the sad thing, if your brand create a global awareness in a very short time; probably you won’t able to meet the global demand in more than 50 countries. So this is the second reason to sell a counterfeit product. After the increase in technological capabilities in textile producer countries (like Thailand, Turkey, Taiwan, etc.), reselling those products without any distributor agreement lost its attractiveness. Supreme is very good example for this scenario. You can position it as a life-style brand, however we are positioning Supreme as an “athleisure brand”.
In North America, Asia-Pasific and Center Europe; we are facing with a new trend: Athleisure Apparel. Basically in every developed economies and many emerging economies, consumers are choosing comfort in their daily life. That is why many sports and also performance apparel & shoees brands are adding leaisure products to their portfolio.
Comfortable tights, sneakers, sports bras and very independent look. This is the blueprints of athleisure style. But what it is mean for sports apparel? First, as we mentioned in the previous paragraph, brands need to adapt this trend. Because it won’t go away. Today, some brands are producing only athleisure products. In the shoe side, brands like Fila & Vans are increasing their market share thanks to this trend. 20 years ago, sports apparel brand start to produce “business shirts ” as a diversification strategy. Today, it is no longer good strategy (also it wasn’t in the past). However Nike meet that demand with AirMax shoes, Adidas put high level fashion design to its’ hoodies. From now on, we will see more fashionable sports and performance apparel products. You will see more people with athleisure clothes in your street. Like in the counterfleit products, who is behind it? Globalization. And after COVID19, we are all know that globalization is sometimes a bitch.
Niche or Commercial?
May be it is not the right question but producing only a protective gloves or producing bunch of more products does not matter for the market penetration. Because it is all about region & channel performance. Today, commercial brands like Nike and Adidas are fighting in every region for a market leadership. In Netherlands, these two brands are creating %20 of the total market size; in Russia they have the %15. For any new market dynamic, big commercial brands are ready to answer. In such a traditional retail industry, it is meaningless to enter to a fight with a niche or commercial product portfolio. It’s all about a healthy go-to-market strategy with solid channel plan. After that, it is all about marketing strategy. Successful marketing strategy have to be flexible and channel independent.
In 2019, Nike created a “Stranger Things” collection. It is a great collaboration example. When we look at the past 10 years, with this move, Nike took the market leadership in Russia for the first time. Flexible marketing strategy is the strategy which is open to any type of collaboration.
Successful go-to-market and marketing strategy should take the new age market dynamics into an account. In sports apparel market, store sales is the leader channel category. E-commerce is increasing its’ market share globally which is not surprising. However leisure and personal good stores performance is also increasing. Finding the right partner in different regions is so important. In Russia and Eastern Europe, Sports Master Group is the market leader. In UK, leisure stores like JD Sports are increasing their market share.