Online sporting goods sales to exceed $1 billion by 2018: Report

Australia’s ageing population is just one of the factors fuelling growth in the online sporting and physical recreation goods sales industry, with revenue forecast to increase by an annualised 6.3% over the next five years.

According to an IBISWorld report, the industry has benefited enormously from the changing landscape of retail shopping.

The industry, as defined by IBISWorld, includes online stores selling goods such as bicycles, camping equipment, exercise and fitness equipment, and other sporting goods and accessories.

It does not include sporting apparel sales.

In the five years leading up to 2012-13, industry revenue is estimated to increase by an annualised 10% to total $765 million, IBISWorld said in its report. This includes a forecast 9.3% growth in revenue over 2012/13.

Meanwhile, in the five years leading up to 2017/18, industry revenue is forecast to increase by an annualised 6.3% to total a whopping $1.04 billion.

“Increased awareness of the link between obesity and lack of physical activity has made sports participation and exercise a priority for households and government alike,” the report said.

“Changing demographics and increased leisure time availability have also boded well for sales of camping and outdoor equipment.”

According to the report, Australia’s ageing population is also boosting the industry.

“Increasing average leisure time and computer literacy will see older Australians shopping online more safely and comfortably than before,” it said.

According to IBISWorld senior industry analyst Jeremy Edwards, the market is ripe with opportunity.

“There’s obviously a huge opportunity for people who are selling any sort of retail goods online, with 20% growth per annum in online retail,” Edwards told StartupSmart.

“There’s room for new players and for bricks-and-mortar retailers to come online and make sure they’re offering a physical storefront as well as an online platform.”

Edwards says online retailers shouldn’t underestimate the number of older Australians shopping online, encouraging them to ensure their websites are as user-friendly as possible.

Meanwhile, the IBISWorld report has highlighted one of the challenges facing the industry – the moderate level of concentration.

“There is only one major player in the industry; however, Super Retail Group is estimated to have 55% market share,” the report said.

“The group has very high market share due to its presence in nearly all areas of the industry. Super Retail Group owns Australia’s largest sporting goods retailer, Rebel Sport, as well as Ray’s Outdoors, BCF, Amart Allsports and Goldcross Cycles.”

However, the report said the industry is expected to become less concentrated over the next five years as more competitors enter the market.

“Online retail provides a new medium for entrants to compete on price and service,” it said.

“More participants are expected to enter the industry and Super Retail Group is likely to continue to pursue a strategy of acquisitions to attempt to maintain market share.

“Online retailers require a good reputation so that consumers will have no hesitations about making online purchases.

“Online retailers compete on price, but they still need to stock quality equipment to attract business.”

This article first appeared on StartupSmart.