IN CASE you have not heard, the sports industry is huge.
It is one of the largest revenue generators in many developed countries.
According to analysts’ reports, the sports industry in the United States alone is believed to generate around US$422bil (RM1.29tril) annually, with a whopping US$27.8bil spent on advertising.
The world’s largest professional services firm PricewaterHouseCoopers in its Changing The Game report said sports revenues worldwide should grow by about 3.7% to US$145.3bil by 2015.
The growth of the sports industry has also spurred the boom of other related market sectors, most notably the sports equipment industry.
According to the Sports Equipment: Global Industry Guide report, the global sports equipment market grew by 2.8% in 2011 to reach a value of US$64.9bil, and in 2016, it is forecast to have a value of US$72.8bil, an increase of 12.2% since 2011.
Global companies in the sports equipment division that previously focused on the North American and European markets have already started looking East to capitalise on growth in Asian markets.
One of these is SportsDirect.com.
The British retail group has over 470 stores, including SportsDirect.com, Sports World, Field & Trek, Hargreaves Sports, Gilesports and Donnay International, as well as stores in Ireland, Belgium, Holland and Slovenia.
Recently, the sports equipment giant made its way to Malaysia through a strategic partnership with the MST Group.
The expansion plan
According to its annual report submitted to the London Stock Exchange, SportDirect’s UK stores (other than Field & Trek) supply a wide range of competitively priced sports and leisure equipment, clothing, footwear and accessories under a mix of brands.
They also stock third-party brands including Adidas, Nike, Reebok and Puma.
The group also owns brands such as Dunlop, Slazenger and Lonsdale.
It was reported that a significant proportion of the revenue from the stores is derived from the sale of the group owned and licensed products, which allows the retail business to generate higher margins, while at the same time differentiating the group’s stores from its competitors, both in terms of the range of products on sale and the prices at which they are offered.
Moving forward, the group intends to continue to enhance its varied store portfolio in both the UK and overseas and plans are in place to expand their international retail operations into all 17 countries that have adopted the Euro within five years.
The group’s online revenue continues to be an area of growth and they are looking at opportunities to develop this revenue stream further.
Online retail sales currently account for 7.7% of total retail revenue and it is expected to reach 10% in the next financial year.
The local partner
Malaysia’s MST Group was founded in 1989 and quickly became a household name for everything related to golf.
Today, the group is the region’s leading golf equipment company and service provider with 56 retail outlets across Malaysia, Singapore, Thailand and Vietnam.
The company says it aims to provide the best in integrated golf services, covering: retailing, wholesaling, driving range management, golf learning centres, custom club fitting and repair services, golf travel, corporate sales, event management and sports cafés, all of which support and promote the development of golf.
More recently, MST Sports Retail Sdn Bhd, a subsidiary of the MST Group, inked a partnership with SportsDirect.com in Malaysia to set up one of the largest sports stores in the country with over 25,000 sq ft located in SS13, Subang Jaya.
“In Malaysia, there only 400,000 golfers and 50% are active. About five years ago, as part of a natural expansion process, we decided to venture into all sports,” said MST Sports Retail marketing director Paul Gibbons.
“We were looking for the right partner and we already had experience working with SportsDirect. They own 19 brands and they are the largest sports retailer in the UK without an Asian presence. So, we provided the platform for them,” he added.
Over the past 18 months since the collaboration was formalised, MST Group has opened two other stores besides its SportsDirect.com flagship outlet in Subang Jaya. The group now has a presence in Sogo Department Store, Kuala Lumpur, and 1Utama Shopping Complex, Petaling Jaya.
“We invested RM4mil to open our flagship store,” said MST Sports Retail chief executive Ng Yap.
The flagship store is separated into 12 key sports zones: The Boot Room for football; Racket Centre for badminton, squash and tennis; Team Sports for basketball, hockey, rugby, volleyball, cricket and water polo; She Runs He Runs for running; Fit Zone for fitness, cross-training, gym equipment, weights, boxing, yoga; Big Action for bicycles, in-line skates, skateboarding; Swim Club for pool, beach and water sports and activities; Field & Trek for outdoor and winter gear, hiking, trekking, camping, fishing; the Games Room for billiards, pool, table games, darts, table tennis; Men Sports Lifestyle, Women Sports Lifestyle and Kids Sports Lifestyle.
Ng and Gibbons explained that the group’s 100,000 sq ft flagship store in Subang Jaya is a one-stop centre for the entire family.
“We want the store to be a destination shopping centre for people from all walks of life,” added Gibbons.
“We offer variety with a good deal. Our customers will be spoilt for choice when they arrive here.
“Unlike some of the other major retailers who only focus on certain brands and products, we have almost everything that a sports enthusiast could want,” said Gibbons.
The company is also looking to expand SportsDirect regionally next year. However Malaysia will remain its prime focus.