The sporting goods industry will face a multitude of challenges in 2024 – and yet the industry is cautiously optimistic about the future. At least that’s what comes from this year’s report on sporting goods industries from the World Federation of the Sporting Goods Industry (WFSGI) and the consulting firm McKinsey & Company. The report called “Sporting Goods 2024 – Time to move”, based on results from market research, consumer surveys and interviews with industry decision-makers, highlights both the past year and the opportunities and challenges for 2024.
The sporting goods industry was robust in 2023
Last year, the global economic situation negatively affected consumer behavior and led to overstocking in sporting goods warehouses. Nevertheless, the industry appears to be robust overall, with global sales growth of six percent in 2023. In the previous year, growth was only around two percent.
Latin America led the way in sales growth in 2023, with an increase of 22 percent in 2023. In Western Europe, sporting goods manufacturers recorded sales growth of eight percent, while Asia Pacific ended the year with eleven percent and the US with six percent. However, a clear shift and the biggest differences were primarily in the competitive landscape. While large brand companies, so-called global players, continue to dominate the market in Latin America with around 90 percent, local providers in China are now becoming more and more established. According to the report, local providers now have a market share of around 60 percent of the 20 largest brands.
Future opportunities and outlook for 2024
For 2024, 90 percent of the companies surveyed expect stable or improved sales and margins. Nevertheless, 81 percent see the biggest challenges in inventories, which tie up capital, and persistent inflation, which continues to slow consumption. A shortage of skilled workers and increasing regulations for sustainable production represent a challenge for 50 percent.
“The year 2024 will continue to be characterized by uncertainty, but will also offer opportunities, says Alexander Thiel, partner at McKinsey in Zurich. “As the global population continues to grow and more people pursue healthier and more active lifestyles, brands, retailers and manufacturers have growth potential despite the difficult market environment.”
According to the report, three groundbreaking trends and developments will be particularly noticeable after 2024. On the one hand, previously less popular sports such as pickleball or off-course golf are opening up new growth opportunities. Both sports activities saw a noticeable increase in demand from 2019 to 2022, with growth of 159 percent for pickleball and 57 percent for off-course golf.
On the other hand, people’s perspectives on sports are changing, which is also changing demand. People are increasingly less interested in individual products and more interested in comprehensive, health and activity-oriented solutions. Many companies therefore pursue “ecosystem strategies” that go beyond their own sales channels and product ranges. The focus here is on partnerships to improve the customer experience, leading to new value creation models such as subscriptions, lower customer acquisition costs and the possibility of cross-selling.
The increasing regulatory requirements for more sustainable production are less of a trend and more of a necessity. These require that companies implement corresponding goals in their processes and regulations. Smaller companies in particular have set ambitious sustainability goals, but to date there has been a lack of concrete measures to effectively achieve these goals.