Recently launched sporting goods brands struggle to replace Western suppliers of sporting goods and athletic apparel but face numerous challenges in their quest, several market players revealed during the Sports Business Congress, a major sporting goods manufacturers conference held in Moscow on Sept. 26-27.
Russian sporting goods are four times cheaper than products of foreign brands, Roman Chebunin, Marketing Director with the Russian sporting goods manufacturer Aucrux, outlined during the event. To some extent, such a difference stems from logistics hurdles that foreign manufacturers face in delivering their products to Russian customers, he said.
Like its Russian competitors, Aucrux primarily sells its sporting goods through marketplaces, Chebunin revealed. He added that brick-and-mortar sporting goods stores charge a high percentage of sales. The company is considering a plan to manufacture sporting goods under the Russian sporting goods chains’ brands, as this business offers better margins.
However, the key challenge Russian sporting goods manufacturers have to face is a lack of high-quality raw materials – above all, fabrics.
The raw material shortage was also recognized by Eugeny Spiryakov, General Director of Spire, a Russian athletic apparel firm. He explained that the company would gladly localize production capacities within the country, but it needs large stocks of special fabrics and rubber, which is impossible to find in Russia. In this light, the company relies on a production factory in Pakistan, Spiryakov said.
Some other sporting goods manufacturers complain about a lack of support from the state, even though top government officials repeatedly call for import-replacement in the sector.
“Unfortunately, the Russian Football Union has absolutely no interest in our products,” Alexey Tarasenko, general director of Trek, a football boots manufacturer. He explained that the company took part in the declared import-replacement push and kicked off the production of boots that successfully passed all the trials. “Apparently, they [Russian officials] intend to use only well-known foreign analogues.”
In addition, Russian sporting goods manufacturers suffer from the general labor shortage in the Russian economy. For instance, Trek was forced to move its production to Uzbekistan due to a lack of working hands in Russia.
In the coming years, Russian sporting goods manufacturers are pinning their hopes on the development of mass sports in the country. Under the government plan, by 2030, at least 70 percent of Russian citizens should be engaging in various sports. This significant increase in sports participation is expected to drive the demand for sporting goods, including those of Russian origin, painting a promising picture for the future of the Russian market.
