In addition, local presence gives an advantage when it comes to bidding and procurement as this information is mainly available only in Finnish and some projects fly under the radar with local companies with good connections learning of and winning the projects.
Finland
Germany
According to the VDS (German federation of sports retailers), sales from sports retailers in Germany grew from around 7.752 billion euros in event year 2018 (Winter Olympics and FIFA World Cup) to almost 8 billion euros in non-event year 2019 (+3.5%). In the individual product groups in German sports retail, the multisport/fitness segment grew 6.5 %, running 5.5%, winter sports, 5%, and team sports 2%. The outdoor sporting goods segment, which accounts for over a quarter of all retail sales, reached a stable 1.5 % growth rate. The service and rent division achieved sales growth of 4%, and racket sports improved 8%. Sales declines were evident in the bathing and beach segment (10%), fun wheel (scooters, boards) (2%), and sport-style (sports-inspired lifestyle collections) (10%).
The Covid-19 pandemic is causing a reorganization of many industry sectors, and it remains to be seen what lasting influence it will have on the sporting goods industry. Sports activities remain a mega trend in Germany, thus offering excellent opportunities for U.S. sports products manufacturers.
Market Entry and Barriers
The German sporting goods market continues to be dominated by specialty retail stores. A 2018 study by Deloitte showed that the majority of active Germans still prefer to shop in brick and mortar retail stores (60%) where personal consultation is provided and fit and functionality can be tested on site. Conversely, almost 40% of active Germans buy sports-related goods primarily online. Nevertheless, specialty retail stores have encountered a lot of competition-induced turbulence in recent years, resulting in a dramatic fall in the number of these kinds of institutions. Once littered with small and medium-sized enterprises, Germany’s inner cities are now the domain of one or two large retail stores. This trend has resulted in a standardization of products, as most large chains carry similar goods. Distribution patterns have also undergone significant changes with the growth and prosperity of online shops. Like any other industry, the sporting goods market must adapt with this new form of competition which does not only allow the consumer to order goods online, but also directly compares prices.
The Covid-19 crisis was a tremendous boost for the sports retail industry in terms of digital transformation and forced many retailers to quickly update their online presence. According to an analysis of online data by Bazaarvoice, online demand for sporting goods rose by 86% in March 2020 and to 220% in April 2020 compared to the same months in the previous year. This demonstrates the need of the consumers to keep fit within their own four walls during the pandemic.
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