Thanks to some strong growth by some local Chinese brands, the global market for athletic footwear managed to hold its decline to just 0.1 percent in 2009, according to a an annual survey by Sporting Goods Intelligence in the U.S. The Chinese performance was nearly enough to overcome the drops suffered in the developed markets of Western Europe, in Eastern Europe and the U.S., where recession-induced cuts in retail inventories led to significant cutbacks in retailers’ and distributors’ orders.
We estimate the total market value at $33,049 million. Most of it is at wholesale, although some major brands, including Nike, Adidas and Puma, have extensive retail networks that account for 15 percent of sales or more. Also, sales in developing markets such as China are often made through mono-brand stores, so they are actually retail figures. Public company figures, such as those of the Nike group, are from the trailing 12 months ended closest to Dec. 31, 2009.
The fact that the market held up as well as it did during a tumultuous year indicates that the category remains healthy overall – generally healthier than sports apparel, which is more fashion-oriented and than sports equipment, where consumers have postponed purchases of big-ticket items. The global sports equipment market registered a 9.6 percent decline, as shown by another SGI survey that we plan to publish in the next issue.
In the athletic footwear sector, the European market fell some 8 percent to $9,550 million in dollar terms, dragged down in part by a strong dip in Russia and other Eastern European countries, but the drop was partly due to a 5.3 percent devaluation of the euro against the dollar. The U.S. market fell by about 5 percent to $12,097 million, but the market in the Asia-Pacific region managed a 4 percent improvement to $7,626 million. The other emerging countries, mainly in Latin America, had a faster growth rate of 27 percent, rising to $3,776 million. The growth in Latin America and in China essentially offset the decline in Europe and in the U.S.
The Chinese market rose much less swiftly than in 2008, when it was strongly influenced by the Olympic Games in Beijing. The Chinese brands suffered last year from a slower global economy and from the previous over-expansion of the market, which kept retailers whittling down inventories throughout the year. However, the most serious overbuilding was in the major cities, where the international brands were strongest. In the smaller cities, where the local brands predominate, there was a much healthier market for brands such as Li Ning and Anta.
The U.S. market still represented last year 36.6 percent of the global total but that was down from 37.6 percent the prior year. Europe’s share of the market fell to 28.9 percent from 31.3 percent. Instead, Asia-Pacific’s share increased to represent 23.1 percent of the total, up from 22.1 percent, while other emerging markets took up the remaining 11.4 percent, up from 9.0 percent prior.
Needless to say, the Nike group of brands continued to dominate the global market with a 38.1 percent share, up from 36.1 percent the prior year, thanks largely to the steady boom at Converse.The Adidas group, heavily exposed in Russia and taking more heat in China than most, remained in second place but saw its share slide to 18.9 percent from 20.6 percent.
Asics, with a 10.5 percent growth rate compared with a 12 percent decline at Puma, took over the third spot globally. Skechers and New Balance held their positions and rounded out the list of companies with sales of $1 billion or better.
The top growth rates in the study were achieved by the three major Chinese brands. Li Ning was up by 22 percent and two smaller but faster growing Chinese brands, Anta and Peak, had growth rates of 34 percent and 38 percent, respectively. The smallest Chinese brand on the chart, Erke, saw its footwear sales fall by 39 percent, but it has started to rebound more recently (see story on this company further down in this issue).
While 2009 was undoubtedly the most challenging year in memory, it did see the introduction of the toning category, a development that is setting up a number of companies in good shape for 2010 as SGI Europe has already reported. Skechers, Reebok, Avia and several others are participating heavily and seeing strong gains. Importantly, it has appealed mostly to women, many of whom left the athletic category on the fashion side with the demise of classics and are now returning. The year also marked a resurgence in performance running.
This annual study of the global athletic footwear market is based largely on public figures, though management input was utilized for private companies. The data is reported on a corporate basis as many companies operate multiple brands. All sales are converted to U.S. dollars at the average rate for the calendar year, so the stronger dollar against the euro and yen affected the values on the chart.
The figures given in the chart on page 5 of this issue for Lotto include those of Etonic and are restated from those already published in the American edition of SGI.