In the long run, it will still outperform within the apparel market, albeit at a much softer rate, with a 2022 to 2027 forecast CAGR of 6.0%. Its popularity will continue to be driven by the comfort and versatility of sportswear styles, as well as the athleisure and streetwear trends, and APAC will achieve the stronger growth in the forecast period.
Before the pandemic, in 2019, sportswear accounted for 18.3% of total apparel spend. By 2022, its share had grown to 22.0%, as consumers’ desire for comfortable clothing and prioritisation of their health and fitness were boosted by the pandemic. While sportswear brands initially remained resilient amid macroeconomic challenges, aided by the segment’s versatility as consumers prioritise value for money, many are now beginning to experience a slowdown in sales, with Nike’s group revenue growing by just 2.0% in its Q1 to the end of August 2023 compared to 4.8% in the prior Q4, and Puma declining by 1.8% in its Q3 to the end of September 2023 versus growth of 5.9% in Q2. As a result, the sportswear market is only expected to grow by 4.4% in 2023, which will mainly be driven by higher prices, with volumes declining in several regions. As inflation subsides, sportswear spend will pick up again, with an expected rise of 18.8% between 2024 and 2027, though this will only slightly outperform the total apparel market, which will grow 15.0%, meaning sportswear brands will have to work much harder to encourage consumers to spend.
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Performance in 2023 will be very mixed across regions depending on the macroeconomic impacts, with Western Europe and North America being the hardest hit, with sales only increasing by 0.4% and 2.3% respectively, while Asia will significantly outperform, with growth of 9.5%. Asia is also forecast to see the largest increase out to 2027, with a 2022 to 2027 CAGR of 9.3%, aided by its growing economies and middle-class populations, but also because sportswear is less established, giving it more scope to grow. Eastern Europe will be the second fastest growing region with a CAGR of 8.8%, followed by Latin America at 6.1%. Western Europe and North America will achieve the softest CAGR’s, both at 4.1%, as they are the most established sportswear regions, but also due to the inflationary impacts.
Between 2019 and 2022, clothing experienced the greatest category growth within the sportswear market, with its share rising from 52.4% to 54.1%, driven by the popularity of comfortable items like leggings and joggers among consumers working and spending more time at home. Throughout the forecast period though, footwear is expected to see the strongest growth, with a 2022 to 2027 CAGR of 6.2%, compared with 5.9% for clothing and 5.5% for accessories. Footwear’s outperformance will partly come from its resilience in 2023, with sales growing 7.3%, compared to 2.5% and 1.2% for clothing and accessories respectively, as consumers invest in more multifunctional and durable items amid inflationary pressures, but will also come from ongoing demand for the latest trainer styles, as well as a preference for the top branded names and a reluctance to trade down. Within clothing, womenswear is anticipated to have the highest forecast growth, at 6.6%, as females become more involved in different sports, and brands increasingly focus on women in sport within their ranges and campaigns. There is also more scope for new entrants and an expanded presence from fashion players in women’s sports clothing, as males tend to be more brand loyal.
Nike and Adidas will continue to dominate the sportswear market for the foreseeable future, with sales much higher than their next closest rival, Puma. However, Adidas is expected to keep losing market share, hindered by the loss of Yeezy last year, and less inspiring and exciting products than its competitors. The market leaders are facing greater competition from running brands like ASICS, HOKA and particularly On Running, which saw sales rise by 70.4% in 2022 and a further 63.9% in H1 FY2023, with the specialisms of these players helping them to gain consumer trust. Growth within the outdoor segment is beginning to slow, after a buoyant few years during the pandemic, though it is still outperforming, with The North Face seeing revenue rise by 11.9% in the three months to July 2023, and mainstream players focusing more on this area. Smaller players are also disrupting the market, with players like Tala and AYBL continuing to expand and serve the demand for more fashionable sportswear.
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