We read about a new term recently – Sports Participation Rate. It is defined as % of population participating in some form of sports. Look at the paragraph below.
Source: Campus Activewear DRHP
Look at the data
Australia & New Zealand – 75%
USA – 51%
China – 32%
India – 6%
India is at 6%! Not sure if the numbers are completely reliable/correct, or what the exact calculation methodology is, but the difference in scale is clear.
There could be various reasons for this – lower income, less job security, culturally a lack of interest towards sports and fitness, etc. This is clearly changing, but the scale is still massively small. No wonder we see the scale difference in Olympic medals.
But how does this impact finance or business? One of the fastest growing segments in the footwear industry is the sports and athletic footwear. However, its scale is still very small. Look at this data below. Again the source is Campus Activewear DRHP.
Sports Footwear Market in India
The total market size of sports footwear in India is USD 1.5 billion as of FY20. This means about Rs 12000 crore. Assuming an average price per pair of Rs 2000-3000, we are looking at a market volume of anywhere between 4 crore to 6 crore pair of sports footwear. 3-4% of the population buying sports footwear once a year. This number cannot remain here if you consider a decade or two in future. Ofcourse, other factors need to improve. Income levels have to go up, sports infra has to improve, sports has to give more security in terms of a career option. But this market seems like it has only one way to go. What do you think? Could this be a sector to bet on?
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That’s it from us this week. Next week onwards, we will be reaching out to you on Fridays, instead of the usual Saturday. Till then, keep learning.