With volumes and product innovation projected to drive growth this year and a minor price contribution as inflation eases, the global sportswear industry has good growth prospects, according to S&P Global Ratings.
The growing number of female athletes, the laxing of dress regulations, and the market’s ongoing expansion throughout the Asia-Pacific (APAC) area all support demand.
With a growing middle class adopting global trends like streetwear and athleisure, APAC has been the fastest growing area in recent years and is expected to continue as one of the primary development drivers over the next five years. This year’s immediate problems are related to how quickly consumer confidence bounces back.
There will be intense competition from emerging companies like OnRunning and Hoka, as well as from established brands like New Balance and Lululemon, as well as from regional brands like Anta in China.
Expanding profitability may be hampered by a rise in marketing costs to advertise new items and justify earlier price increases. With inventory levels progressively returning to normal, S&P Global anticipates a more muted promotional landscape.
The supply chain for the sportswear sector is extensive and multifaceted, with over 80% of its suppliers situated in Asia Pacific. The effective operation of the supply chain is at danger from geopolitical tensions and wars, according to S&P Global Ratings.
One of the main areas of attention is still the direct-to-consumer channel, which includes e-commerce and guarantees brand exposure and closeness to customers. Nonetheless, it stated that handling large volumes and drawing in a more varied customer base are crucial tasks for wholesale partners.
Sportswear firms’ approaches to social and environmental issues are crucial to maintaining their business licences and safeguarding their reputations as brands.
S&P Global anticipates a growing emphasis on environmentally friendly materials and sustainable products, with a focus on sportswear and footwear’s performance advantages, as core strengths.
