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(Last updated: 22 May 2008)
Trends and opportunities
The market
The sports industry in the USA is a large and highly competitive industry. Australia has developed a reputation as a sporting nation, therefore it’s no surprise that Australian companies have consistently achieved success in exporting in a variety of sporting sectors including marine, training, stadium seating and sports flooring.
The Australia-United States Free Trade Agreement (AUSFTA) has helped to raise the profile of trade relations between the two countries, and to enable Australian companies, including sports related companies, to compete more freely in the US market. This agreement has established the framework for the expansion of two-way trade between Australia and the USA, which totalled US$32.1 billion in 2004.
Also, the 2000 Sydney Olympic Games helped boost the profile of Australia's sports capabilities and has assisted Australian exporters to build on the already strong base of success that Australian companies have achieved in sports and recreation exports to the USA.
Trends in the US sports industry include:
- Private labelling of sports apparel and equipment is becoming more prevalent. This puts manufacturers in the position of competing with some of their customers.
- Increasingly manufacturers are sourcing products from independent factories in low cost production countries. Hence some manufacturers are becoming suppliers rather than manufacturers.
- Retailers of sporting goods are required to have both a physical and Internet presence. In the sporting goods sector 85 per cent of manufacturers and 75 per cent of retailers indicate they search the Internet for suppliers, distributors and sales representatives. More than 90 per cent of manufacturers and 80 per cent of retailers currently have a website - with over 40 per cent of manufacturers and over 70 per cent of retailers using their sites to sell direct.
- In fact, one of the characteristics of the US sporting goods market, is that many retailers will not purchase products from suppliers by any other method. E-commerce is their sole means for conducting business with their suppliers. Australian exporters in this sector should consider the benefits of a website that reflects the quality of their product and the key competitive features of their company.
- The growing Hispanic population is expected to contribute to the growth of sports, such as baseball and soccer.
- Concerns about obesity in children is helping to promote the importance of physical fitness in schools. Increasing attention is being given to the value of a healthy lifestyle, which incorporates exercise. These factors are expected to be growth influencers over the next few years.
Opportunities
The areas of greatest opportunity are:
Sports facilities
Opportunities exist in several market segments including college and professional sports. There are over 600 colleges within the three levels of the National College Athletics Association system, as well as major professional leagues in a variety of sports. All of these provide infrastructure and related services opportunities. Australian companies have had success in a range of sports infrastructure and services activities including stadia seating, playing surfaces, venue waste management and ticketing.
Sports related goods and services
The sporting goods market in the USA is the most competitive in the world. While there is major potential for Australian companies, it requires distinctive and innovative products, coupled with strong capital resources and management commitment. According to the Sporting Goods Manufacturer's Association, the total value of declared sporting goods imports into the US reached just over US$10.4 billion in 2004, an increase of 7.5 per cent from 2003.
The US Monthly Retail Trade Survey reported sales in sporting goods stores of US$2.3 billion (preliminary) for October 2004, up 9.3 per cent from the US$1.95 billion in October 2003. According to estimates by SGMA International (the association of the US sports product industry) manufacturer's shipments of total sporting goods in the US rose four per cent in 2004 to US$52.1 billion. It was the largest percentage gain the industry has achieved since 1997, when wholesale sales rose 5.2 per cent.
Sports training and technologies
Australia was host to teams from a range of sports and countries for pre-Olympic training in the lead up to the 2000 Sydney Olympic Games. This increased exposure to Australia as an off-season training venue, flowed through into continued business. Facilities from several states are benefiting from this business. Exposure has continued because of the ‘Survivor 2’ reality television series.
Australian companies have also experienced success in exporting training software and other innovative sports training products to the USA.
Recreational marine
The US recreational marine market is immense. Recreational boats at all levels and prices are popular. The market is highly competitive, with Australian exports estimated at around 2.4 per cent of the overall market. In 2004, Australia accounted for approximately 5.8 per cent of the US$805.7 million worth of imports of pleasure boats with inboard motors, 2.1 per cent of the US$114.3 million of non-motorised pleasure boat imports, and 2.5 per cent of the US$25.2 million worth of outboard motor pleasure boat imports.
Strong capital resources and management commitment are required, combined with the ability and capability to modify design and finish to meet market expectations.
Racetrack infrastructure and services
This sector can be difficult to enter and generally requires building of alliances with local providers. Over the past four years, Australian companies have exhibited successfully at the major US racing exhibition, the Arizona Symposium on Racing. Export successes have included both infrastructure and services. |