NPD for FESI European Sport Market Estimate

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European Sport Market Size Estimate
TOYS Release 2011
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In Euros / Sixth edition of a survey initiated in 2005
Based on consumer tracking (where available),
statistical projections and our industry expertise
Figures are sell-out (retail VAT included), not wholesale

Copyright. The NPD Group, Inc. All Rights Reserved. This presentation is Proprietary and Confidential and 1
may not be disclosed in any manner, in whole or in part, to any third party without the express written consent of NPD.

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Results 2010

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Proprietary and Confidential

Global Sport Market Size Estimate,
Year 2010, Billion Euros

226 Billion Euros
+4%

Trend 10/09

3

European Sport Market Size Estimate,
Year 2010, Billion Euros

66 Billion Euros
+2%

Trend 10/09

4

Market sizes and Evolution rates by area in Scandinavia,
Central & Eastern Europe and Western Europe

Main Markets in Billion Euros
Year 2010

Trends 10/09

+2% +7%
+1%

Western Central and
Scandinavia*
Europe Eastern Europe
4.8
52.7 8.7
* Norway, Sweden,
Finland, Denmark

5

How Does the European Sport Market Look Segmented
By Universe of Products?
2010 In Billion Euros and trend vs 2009

Footwear Equipment

14.5 Billion Euros 16.9 Billion Euros

+3% +2%
Bikes (and related
Apparel
accessories)
23.9 Billion Euros 10.9 Billion Euros

+2% +1%

6

In comparison with last year, we have revised upwards our
estimate for Equipment in Europe

European Market Broken Out into 4 Segments % Value 2010

Split by universe of products in % value

Footwear;
Bikes; 16%
22%

Equipment ;
26%

Apparel;
36%
7

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5 year Trends 10/05

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European Sport Market
Trends Over The Last Few Years & Forecast 2011

+4%
+1%
+2%
+4% +2% +0%
+3%
+4% Forecast
11/10
-1%
-1% Trend
Trend 10/09
07/06 Trend
Trend Trend
08/07
06/05 09/08

9

Europe: A Fragmented Market

Top 12 Markets Year 2010

Total Europe +2%
Trend 10/09
66.2 Billion Euros

In Billion Euros In %
Germany
12% 17%
7,9 France
11,4 2%
1,4 United Kingdom 2%
1,5 Italy 2%
1,2 2%
1,3 Spain 3%
1,7 Russia 3% 15%
2,2 9,6 Netherlands
4%
2,9 Sweden
Belgium 6%
4,1 Poland
13%
4,9
8,7 Greece 7%
7,3 Austria 11%
Switzerland
All others

10

Russia bounced back in 2010 while France, UK Italy and Spain
were only able to put an end to 2009 decline

Main Markets
in Billion Euros Germany
+1%
Year 2010 11.4
France
9.6 +0%

UK
+1%
8.7

Italy
+1%
7.3

Spain
+0%
4.9

Russia
4.1 +7%

11

Other countries in Europe show moderate growth to the exception of Greece
where consumption is slowing down due to the recession
Main Markets in Billion Euros
Year 2010
Netherlands Austria
2.9 +0% 1.5 +4%

Sweden Switzerland
2.2 +1% 1.4 +5%

Belgium Norway
1.7 +4% 1.0 +2%

Poland Czech Rep.
1.3 +7% 0.8 +5%

Greece Denmark
1.2 -2% 0.9 +4%
Ireland Finland
0.8 +2% 0.7 +6%

12

Other Analyses

13

What is the Average Spend per Head by country
In the European Sport market?
In Billion Euros
Year 2010 World : 33

Europe 90

Central and Western Europe and
Eastern Europe 27 Scandinavia 140

Poland 35 Germany 140 Italy 121

Russia 29 France 153 Spain 106

Czech Rep. 76 United Kingdom 141 Sweden 232

Austria 176 Netherlands 175

Belgium 160 Switzerland 185
14

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Methodology

15

Definitions

 We are trying to figure out global
consumption for Sporting goods.
 For footwear and apparel, the
intention is to represent Sport and
Sport inspired shoes and garments.
 So the scope goes beyond sport
use. It includes sport style as far as
it can be detected either by NPD or
by consumer perception.
 We have slight differences in
methodology depending upon
countries, but we are trying to keep
it comparable.

16

NPD Regional Product Mix

Common Denominator across countries is Consumer Panel information

Brazil & Russia ongoing tracker in 2011
17
17

Which Part Of The World Is Covered By
On-going Tracking?

 The NPD Group, in association with its Population
partners, has an on-going tracking service that 16%
collects sports footwear and sports apparel data
in 10 countries for the year 2010 Projected
Tracked

 These 10 countries account for 16% of the
global population and 68% of global spending
on sports footwear and sports apparel.
Sport market

 Other countries and equipment are estimated
through statistical projections and NPD’s
industry expertise.
Projected

68% Tracked

18

The Online Consumer Panel

 What is the online
consumer panel?
– Individuals are recording
online purchases of:
• Sports footwear
• Sports apparel
– Panelists are recruited to
represent country
demographics
– The data is then weighted to
represent the total population
of the country, and data is
reported quarterly.

19

Global Panel pool Size -Individuals

1 Million of
 More than

people worldwide
have given their approval to be
surveyed in our consumer panel

20

Global Panel Database Size

 Database size for the year 2009 (sport
footwear & apparel combined)

1 million
 More than

purchases worldwide
recollected over the last 2 years, in the
database, to be able to give a trend
 Per year:
– 275,000 purchases in Canada
and the U.S.
– 185,000 purchases in Europe covering
Great Britain, France, Germany, Italy,
Spain,
Netherlands, and Sweden.
– 40,000 purchases in Japan

21

Definitions - What Is In? What Is Out? By Category
INCLUDES EXCLUDES
Sport Footwear/Trainers: Any sport, active, or sport-style footwear worn
for leisure and sport clogs
outdoor shoes, after ski boots, winter boots, hunting and fishing boots non branded thongs and flip flops
Footwear sport sandals , ballerinas (partly,based on consumer perception)
Footwear swim sandals (counted in equipment)
branded thongs and flip flops, recreational workboots (partly, based on rain boots, gardening boots
consumer perception)

Sport Clothing: Any sport , sport inspired clothing or active
Apparel wear, worn for sport or leisure and any casual garment Apparel Formal wear / city wear
worn for sport.

Whatever has an engine, guns air bottle for diving, boats

Everything as soon as it is being sold within sporting goods stores Some categories for the part of the business done outside the
Inline skates and ski boots are reported in equipment sport distribution or in B to B channel (ex fitness equipment) :
Bikes are included wherever they are sold , all of them including those Travel luggage, Back to school backpacks, optics/sunglasses
Equipment used as a way of transportation Equipment some camping&hiking gear (cooler bags and insulated
E-bikes are included. containers, camping gaz, dried food, maps, Guides, GPS
hammocks&camps beds)
Fun sports and games ( Darts Boule petanque Frisbee,
boomerangs, juggling articles, kite flying Billiard Bowling)

Services Bicycles and ski maintenance, rental bicycles & ski services Services Ticketing for sport competitions

Borderline sports such as Motor sports, fishing hunting Diving Skydiving,
Paragliding are estimated as our experience shows that consumers
hardly declare them as sports
Sports For equipment we do not have a consumer tracking, only external
Sports all covered
sources; As a consequence, Data is subject to variations according to
the sources considered

Age All age groups are included
infant sizes (partly, based on consumer perception)

for footwear , apparel and bikes : whether it is sold or not in sport
distribution does not matter B to B sales excluded.
For Equipment:we cover only sales done inside the sport distribution for instance we exclude a sport retailer selling directly tennis balls
Distribution notably travel luggage,cooler bags and insulated containers, camping
Distribution to a tennis club or Fitness equipment manufacturers selling
gaz, dried food, maps, Guides, GPS hammocks&camps beds, Back to treadmills, stationary bikes or rowers to a gym club
school backpacks, sunglasses, sun skin protection-

This is up to the consumers to decide if a brand/a garment is belonging
22
Perception (and therefore declared) or not (then not declared) to the sport universe Proprietary and Confidential

Understanding for One Given Sport, How Revenue Breaks
Down Between Sport Use and Sport-inspired.

Each Sport Generates

A Market for A Market for garments and
Sport Practice shoes inspired by the sport

Footwear / Apparel / Equipment Footwear / Apparel

23

METHODOLOGY

Used for Sport

Made for Sport & not used for sport
Made for Sport & used for Sport
Cannot be read directly in the report

24

Understanding for One Given Sport, How Revenue Breaks
Down Between Sport Use and Sport-inspired.
Used for the sport
– All shoes and garments worn primarily for
sport use. Apparel used for the sport
Apparel made for the sport & not used for it
– Include made for Footwear used for the sport
• A technical T-shirt made for running and Footwear made for the sport & not used for it
used for jogging Equipment
– Can include also not made for TOTAL

• A cotton T shirt is not made for running but
may be used for jogging

Made for the sport and not used for it
Apparel used for the sport
• Inspired by the sport and mostly not
Apparel made for the sport & not used for it worn for sport use
Footwear used for the sport
• A technical T-shirt made for running,
Footwear made for the sport & not used for it found in the running shelve, but
Equipment finally worn in day to day life by the
consumer.
TOTAL
• A football shirt worn by supporters at
the stadium

25

Definitions - What Is In? What Is Out? By Sport
includes
hiking trekking nordic walking, walking for exercice, mountaineering sport
sandals, winter boots
tents, pads,sleeping bags+ Backpacks/Rucksacks +mattresses
(insulating&inflatable) + Poles/Sticks+ Drinking systems
Hiking Walking Hiking Backpacks only (other backpacks reported in multisport) + all other
camping/hiking gear sold in sport distribution (GPS, maps...)
excludes
thongs, flip flops and swim sandals (reported in swimming)
rock Climbing (reported in other outdoor sports), treadmills (reported in
fitness)
called soccer in the US
Football excludes rugby ,American football and Australian Football

includes
multi-purpose belt, reflector, running gloves, water bottle, wrist pocket,
reflective armband, MP3 Player armband, hydration belt, high visibility
Running
vest, hydration pack,
Excludes
treadmills which are counted in fitness, heart rate monitors & watches,
deodorising balls, drawstring bag counted in multisport
Rugby excludes american football reported in other sports

Alpine Skiing, Nordic skiing, ice skating Cross country skiing
Ski Boots/Binding/poles/Wear/Other Equipment/Ski helmets / Ski masks/
Snow Sports After ski /Moon boots
excluding snowboard + included sales covering services (ski rental, ski repair)
Excludes
Ice Hockey (reported in other sports), snowboard
winter boots (reported in hiking)
Are not included here sunglasses –as they can be used for a variety of
sports, they are counted in multi sports-

Snowboard 26


All kinds of bicycles whatever usage (sport or way of transportation in day
to day life)
E-bikes (electrical bikes)
Mountain bikes, BMX Road Bike/Wear/Helmet/Shoes/Other Equipment
Cycling Bicycle computers, frames and parts,accessories,care products,clothing,
gloves, panniers, Helmets
Excludes
stationary bikes counted in fitness
includes
horse riding Climbing Sailing Kayaks and canoes, Canyoning
Marine sports : Equipment for Scuba Diving/skin diving/Snorkeling
Fishing hunting and hence related shoes&garments (rainwear waxed or
Other Outdoor sports coated,...) includes hunting and fishing boots
Skydiving, paragliding
excludes
guns & ammunition sold outside sport retailers, gardening boots,

All swimwear functionnal swimwear &beach wear (SwimSuits, bathing suits,
bathing trunks, bathing shorts, bikinis, swimwear from surf brands and sun
protection tops)
equipment:Swim Cap/Swim Goggles /Other Swim Equipment including swim
Swimming sandals, Buoyancy aids, swimming trainers, buoyancy jackets
water polo balls & equipment, aqua gym, aqua fitness,
excludes
boardshorts counted in summer board sports and Equipment for Marine sports:
Scuba Diving/skin diving/Snorkeling counted in other outdoor sports

Golf Club/Ball/Bag/Shoes/Globe/Wear/Other Equipment

covers Surfing, Windsurfing, Kitesurfing, Kiteboarding, Bodyboarding,
Skateboarding, Wakeboarding
wetsuits, surfboards masts&sails, all boardshorts
note: wetsuits under equipment line
Summer Board Sports include an estimate for branded thongs and flip flops
For apparel covers a selection of brands inspired by the surf/skateboard world
exclude swimwear from surfing brands and sun protection tops counted in
swimwear
27


Racket/Ball/Shoes/Wear/Tennis Bag/String/Other Tennis Equipment
Tennis exclude any other racket sports
softball
Baseball Globe/Wear/Bat/Spike/Ball/Bag/Other Equipment

Rackets sports (Badminton, Table tennis, Squash, Paddle …)
martial arts ( kendo Judo Karate Ju jitsu Sumo)
Other sports Ice-Hockey, Inline skating Roller skating, Epées, sables, foil
American Football, Cricket,Boxing, Wrestling
volley ball, beach volley ball, handball and other ball games

Includes all gym club activities + same sports when practiced outside the gym/at
home.
aerobic fitness training work out in gym wellness yoga taichi pilates
Gymnastics, Rhythmic gymnastics,
Fitness, Work-out, Training
excludes school gym activities reported in multi sports
and Dancing For equipment, covers steppers home fitness & fitness equipment including
treadmills, cycling &running trainers, statioanry bikes free weights exercice
benches rowing machines elliptical machines exercice cycles and excludes
exercice institutionnal (we cover only exercice-consumer)

Cover all footwear "sport:fashion sneakers" and garments that cannot be related
to one sport specifically by consumers
either worn for sport use or not
headwear (caps), some tracksuits, cotton T-shirts, polos, bermudas, 3/4 pants,
socks, triathlon clothing
Sport styled, Multi-sports and
+ apparel footwear made for kids for school gym activities fall in this category as
school gym well
Equipment
include sales within sport distribution only for backpacks / Day-packs,
luggage, sunglasses/optics, sun skin protection
exclude hiking backpacks (counted in hiking)

28

We Use Gross Domestic Product in Purchasing Power Parity
(and Other Inputs) to Estimate the Other Countries.

29

Methodology: How Do We Determine Market Size for
Countries where no panel is existing?

A/ B/
We also know the gross
We measure the sports market
domestic product (GDP) per
size in 10 high income countries.
capita for these 10 countries.

C/ D/
Also We do have the GDP per For one given level of GDP per
capita for every single country in capita, we make the assumption
the world. that the following ratio is stable:

Spendings on sports

GDP

A/ B/ C/ D/ Gives us an estimate of the spending per capita on
sporting goods for every projected country.

30

Methodology: How Do We Determine Market Size for
Countries where no panel is existing?
High income High income
GDP per capita GDP per capita
> 35 000 USD 25 000- 35 000 USD
And 5 other Thresholds of GDP per capita are used:

20 000- 25 000 USD
Luxembourg Germany
Norway United Kingdom 15 000- 20 000 USD
United States Sweden
Ireland France
Iceland Italy 10 000- 15 000 USD
Denmark Taiwan
Canada Spain 5 000- 10 000 USD
Austria Japan
Qatar New Zealand 0-5 000 USD
Belgium Greece
Finland Slovenia
Australia Israel
Netherlands
United Arab Emirates
Singapore Highlighed countries are
Sweden those countries where
NPD has an on going
Belgium tracking or has a partner
Finland with on going tracking. Segmentation Of Countries by Income determine
the 7 thresholds of ratios Spending on sport / GDP
used to calculate sport market size on projected
countries.
31

Assumptions for Countries with Intermediate and Low Income

Countries with intermediate
and low income spend less
per capita on sports than
developed countries.
 Spending on sport requires
leisure time above money,
and leisure time is a feature
for rich country populations.
 The question - how much
less? - is being simulated by
NPD with the help of external
sources

32

How Does Spending on Sport Grow With Level of Income
(GDP)?

NO
Sporting Goods
Consumption

Level of
Income (GDP)

33

How Does Spending on Sport Grow With Level of Income
(GDP)?

Sporting Goods
Consumption
YES

Level of Income (GDP)

Countries combining an already significant Sport market with
a sporting good consumption growing faster than GDP: This is
where brand power is being built up for the future.

Spendings on sports
For low income countries, the ratio : is lower than for high income countries.
GDP

34

What Makes Our Data Reliable?

 Independancy from retailers and manufacturers in the data as the recollection of NPD data used
for the survey is based on consumer input ; there are many advantages behind an independent
external source; one advantage is that the research can be conducted on an on-going basis
without being dependant on the industry for data recollection.

 NPD is Measurement of the market through representative sample in each country available
and statistical projection as opposed to other methodologies based on interviews of key brands
and retailers from the industry.

 Comparable data from a time perspective : NPD is sell out not sell-in.

 We are tracking sales, not feelings or intentions to purchase.

 Comparable data from a product scope perspective: NPD used harmonized definitions of
products in its measurement which is never the case from interviews based methodology.

 Complete data : NPD tracking allows to consolidate the branded market and the non branded
market. NPD also allows to consolidate private labels and very small brands not only the majors.

 Granularity: NPD is is the unique company recollecting sporting goods data at the maximum
granularity available which is item level (one pair of shoes, one garment, one purchase) ; market
size is obtained by aggregation as opposed to “guesstimates” built up from interviews conducted
within the industry.
35

Understanding how NPD is building up their Knowledge of The
Sport Industry.

Experience
of market research
Retail / Point of sales
panel

Online consumer panel Knowledge

Meeting on an ongoing basis with
(and Learning from) Retailers
participating to the POS panel
Meeting on an ongoing basis with
(and Learning from)
Manufacturers clients

36

Methodology: Other Assumptions

Footwear Apparel Equipment Bikes

We project the split observed in tracked countries on simulated countries,
taking into account some factors that matter:

– Latitude: Less bikes, more indoor activities, more warm/expensive
apparel in northern latitudes.
– Level of income: bicycles are a form of transportation in day-to-
day life in countries where the population cannot afford a car or a
motorbike.
– Landscape: Presence of seaside, of mountains.

37

Definitions are Slightly Different Between the Countries

Definition for the United States &
Canada
 We are tracking total apparel & footwear

 Sport & sport inspired apparel (also called
Active wear in the US) is obtained through a
filter on the data not through consumer
perception

 Constructed definition based on type of
apparel, where purchased, and intended use

 The additional filters «where purchased» and
«intended use» are activated only for some
garments which are not obviously belonging to
the sport universe (casual pants, turtle
necks…)

38


Definition for Japan

 We are not tracking total apparel &
footwear. The survey is tracking
Sport and Sport inspired shoes and
garments –similar to Europe-

 NPD does not have a panel
representative of total JAPAN. We
have a panel representative of
TOKYO+ OSAKA which represent
roughly 40% of the total japanese
population.

 We are also tracking some
equipment categories in Japan

39


Definition in Europe big 5 countries
 We are not tracking total apparel & footwear.
The survey is tracking Sport and Sport inspired
shoes and garments –similar to Japan-

 In apparel, survey choices exclude some
garments that are 99% not used for sport
practice (eg: jeans, city wear).

 It is consumer perception and type of garments
suggested which finally defines the market size.
What is important, is the respondent’s
perception of the garment/shoes purchased:
Does it relate to sports (then declared) or not
(then not declared).

 It does not matter if the product has been
purchased in specialized sport distribution.

 Therefore, the sports territory is not defined by
manufacturers or retailers but by consumers.

40


Definition in Sweden
& Netherlands
 We are tracking total apparel
 Sport & sport inspired apparel is
obtained through a filter on the data
not through consumer perception
– All purchases used for sport
regardless of apparel type category
– All specific sport brand sales (closed
list) regardless of usage and apparel
type category
– All purchases coming from the sport
retailers.

41

Why Do We Use Purchasing Power Parity for GDP?

 A purchasing power parity change rate is intended to equalize the purchasing power of
different currencies. These special exchange rates are often used to compare the
standards of living of two or more countries. The adjustments are meant to give a better
picture than comparing gross domestic products (GDP) using market exchange rates.
Without a PPP exchange rate the GDP may not accurately measure differences in income
and consumption.
 Market exchange rates fluctuate widely, but many people believe that PPP exchange rates
reflect the long run equilibrium value. The distortions caused by using market rates are
accentuated because prices of non-traded goods and services are usually lower in poorer
economies. For example, a U.S. dollar exchanged and spent in China will buy much more
than a dollar spent in the United States.
 The differences between PPP and market exchange rates can be significant. For example,
GDP per capita in China is about USD 1,500, while on a PPP basis, it is about USD 6,200.
At the other extreme, Japan’s nominal GDP per capita is around USD 37,600, but its PPP
figure is only USD 31,400.

42

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NPD for FESI European Sport Market Estimate

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