Demand for sporting goods is falling in Russia amid price increases across the entire product range and the exodus of Western brands, according to Anna Lebsak-Kleimans, general director of Moscow-based consultancy Fashion Consulting Group. In recent years, sporting goods had fueled demand in the Russian fashion market, Lebsak-Kleimans said. “The sportswear segment, including sports clothes and athletic apparel, outperformed other apparel categories in terms of growth. The share of the sportswear segment on the market steadily increased.” She added that sportswear saw exceptional growth in sales as it became the preferred casual apparel for both men and women. The Covid-19 pandemic had further accelerated demand as Russians increasingly wore sportswear at home instead of traditional home attire during the lockdown.
Meanwhile, several companies have ceased doing business in Russia as a result of the events in Ukraine. Adidas, Puma, Under Armour and JD Sports were among the first brands to withdraw from the Russian market, and they did not remain the only ones. “In addition to sporting brands, international sports federations have left, including those of boxing, field hockey, cycling, tennis, rugby, weightlifting,” Lebsak-Kleimans said. The current crisis has led to a temporary surge in sales, likely attributable to panic buying.
“The first surge occurred at the end of February, immediately after the collapse of the rouble, as people began buying a variety of goods for the future realizing the inevitability of the upcoming price hike. The second peak of the surge was recorded in the first half of March when a number of leading brands announced the suspension of work and a possible exit from the market. Starting on March 20, the effect of buying in advance ended and demand was declining,” said Lebsak-Kleimans. The effect of advance purchases was mainly observed in the mid-range and premium segments, and to a lesser extent in the mass segment. In the mass segment, people invested the available funds mainly in essential goods.
If Western brands, many of which include world leaders in the sporting goods industry, decide to withdraw completely from the market, this will have a negative impact on Russian consumers, who would see a significant reduction in product supply. To avoid shortages in in-demand categories, buyers will have to look for affordable alternatives in the thinned-out list of available options, Lebsak-Kleimans said. However, the product range is not expected to shrink drastically, she added. The Russian Association of Sport Industry Enterprises estimates that 70 percent of the products on the market can be produced domestically if the necessary raw materials and production facilities are available. In certain categories, buyers will also look for alternative foreign suppliers among the remaining options, according to Lebsak-Kleimans, acknowledging that the quality of available goods will likely be affected. Prices in the market are expected to increase by 30 to 100 percent as logistics costs, raw materials and energy tariffs have risen sharply.
However, Decathlon’s recent decision to cease operations in Russia is seen as a major blow to the sporting goods market. “First of all, it is a chain with an excellent range of products at affordable prices, and the offer covers a wide range of different amateur sports. Compared to Sportmaster, the largest sports chain in Russia, Decathlon has a much wider gear selection. And for some sports, it was generally the only store where you could buy necessary goods at affordable prices: for example, equestrian sports,” said Lebsak-Kleimans.
Photo: Alex Zarubi on Unsplash
