Report on Sport and Leisure Product Market in

Bangladesh
The sports business means many different things to different people. This
is a truly global industry, and sports stir up deep passion within spectators
and players alike in countries around the world. To one person, sports are a
venue for gambling; to another, they are a mode of personal recreation and
fitness, be it skiing, cycling, running or playing tennis. To business people,
sports provide a lucrative and continually growing marketplace worthy of
immense investments. To athletes, sports may lead to high levels of personal
achievement, and to professionals, sports can bring fame and fortune. To
facilities developers and local governments, sports are a way to build
revenue from tourists and local fans. Sports are deeply ingrained in
education, from elementary through university levels. Perhaps we cannot
state with confidence that sports enrich the lives of all of us, but they
certainly entertain a huge swath of the worlds population. In addition to
economic impact, the largest single effect that sports create is that of
gripping entertainment: hundreds of millions of fans around the globe follow
sports daily, whether via radio, television, printed publications, online or in
person, as spectators or participants.
Sports are big business. A reasonable estimate of the total Bangladesh
sports market would be $40 to $43.5million yearly. However, the sports
industry is so complex, including ticket sales, licensed products, sports video
games, and collectibles, sporting goods, sports-related advertising,
endorsement income, stadium naming fees and facilities income, that its
difficult to put an all-encompassing figure on annual revenue. When
researching numbers in the sports industry, be prepared for apparent
contradictions.
When the astonishing variety of sports-related sectors are considered, a
significant portion of the workforce in developed nations such as the U.S.,
U.K., Australia and Japan rely on the sports industry for their
livelihoods. Meanwhile, the data showed that 5,200 Bangladeshi works in
fitness centers, 9,700 work in stadiums, 300 works in bowling centers and
3,300 work at country clubs or golf courses. In total, approximately 10,000
million Bangladeshiworks
directly
in amusement and recreation
sectors. Another 1,000 works in the wholesale trade of sporting goods, and
7,800 works in retail sporting goods stores.

While it may not seem like it to the casual observer, the sports sector is
constantly evolving in terms of personal tastes, popular games and
technologies. In fact, the personality and popularity of a top athlete can have
a tremendous impact on the current popularity of a particular sport.
Research from the Sporting Goods Association indicates that tastes in
individual sports, exercise and recreation are continually evolving in
Bangladesh. A sports participation study showed cricket and football to be
the fastest growing sports activity in the Bangladesh among
consumers. Cricket increased 26.6% over 2010, followed by Football at
11.5%, Golf at 9.4%, and aerobic exercise at 8.9% and running/jogging at
8.9%. It should be noted that none of these fast-growing activities require
expensive equipment.
A recent report said that exercise walking is the most popular sports
activity in Bangladesh, with 3.1 million people participating. Exercising with
equipment follows as a distant second, then swimming, then other indoor
sports, then aerobic exercising, bicycle riding and other outdoor sports.
Tennis continues to grow, up 7.0% in 2010. The fact that tennis is among
the least costly sports in which one can participate, combined with the fact
one can usually get to a tennis court and could easily push tennis to greater
popularity in todays tepid economy and high gas prices.
Meanwhile, the number of people playing golf in Bangladesh has been
dropping over the long term, although audiences for televised golf events
remain very large. Then theres the fact that large audiences have been
watching high-stakes poker tournaments on television recently. Moreover,
thanks to the Internet, fantasy sports teams and online betting on sports
events are soaring.
Amateur participation in the team sports of volleyball and rugby is
extremely high. Reports show 33% growth in core participants in volleyball
during 2010.
One of the strongest, long-term growth trends in all of the recreation
business is in fitness-related activities. In the Bangladesh alone, health clubs
boasted 0.12 million members in 2011, representing a 2.4% increase.
Another 2 to 3thousand Bangladeshi use exercise machines in their homes.

Evolving technologies and fashions have an immense impact on sales of

sporting goods within specific sectors. Sporting goods makers are constantly
trying to create reasons for consumers to buy new equipment. Golf ball and
club makers adopt new technologies with great success. Nanotechnology,
with the ability to provide components with tremendous strength at very low
weight, is being featured in new equipment to a growing degree, including
tennis rackets. Likewise, carbon fibers are increasingly seen in the
construction of upper-end equipment, including fine bicycles.
Meanwhile, media used to deliver sports and sports related information
are evolving quickly. Sports coverage is one of the most widely viewed
categories online. At the same time, digital TV recording devices (DVRs) are
enabling fans to watch events according to their own schedules. The rapid
emergence of sports news and events video delivered via state-of-the-art
mobile screens is having a major impact. Watch for continued rapid change
throughout the sports industry, as consumers tastes and manufacturers
product lines evolve.
The global recession had a significant effect on sports and recreation in
2008 and 2009. Professional teams encountered difficulty selling tickets, and
revenues for manufacturers of sports and recreation equipment
dropped. Gambling revenues plummeted. Consumers in South Asia are still
keenly interested in their favorite sports and recreation, but many are
reducing their discretionary purchases, and they are cutting back on luxury,
leisure and entertainment purchases in particular. Since ticket prices for
professional sports have become extremely expensive, sales have been
affected. Some stadiums suffered revenue declines, and many have closed
The biggest opportunities in the sports industry today lie in providing
exciting, high-value opportunities for sports fans, such as high-tech
recreational gear at reasonable prices; spectator sports ticket packages that
represent good value; exercise/fitness services and programs that will appeal
to aging baby boomers; and equipment and apparel that represents high
value and exciting design. Consumers still want to play, but they want to do
so at a reasonable cost.

After suffering from a decline in expenditure during 2008 and 2009, at the
height of the recession, Key Note has estimated that the Sports Equipment
market has seen incremental increases in consumer expenditure resulting in
a market value of $10.5 million in 2011. This is primarily down to the slow

recovery that has taken place within the economy since the financial
downturn, coupled with heightened focus on sport in the run up to the BPL
(Bangladesh Premier League). Despite this resurgence, between 2007 and
2011 consumer expenditure fell by 9.9% over the 5-year review period
covered in this report update.
Participation levels in competitive sports have fallen slightly in recent years,
due to the emerging trend towards pure fitness, or rather individual
sporting activities. These activities include jogging, hiking and swimming,
and are becoming popular due to increasing concerns among the population
about living a healthier lifestyle, coupled with the fact that they often require
little or no investment in sporting goods.
Cricket has remained the largest sector of the market, principally due to the
high demand of cricket equipment, such as Bats, Balls and Bags. Consumer
expenditure in this area reached $18.5million in 2011, and was followed in
value terms by home fitness equipment which had a value of 11.5million in
the same year. Despite this, golf equipment saw a decrease in consumer
expenditure of 16.5% between 2007 and 2011, while home fitness
equipment witnessed an increase of 8.3%, closing the gap between the two
sectors slightly. Most sectors experienced a drop in consumer expenditure
over the same 5-year period, with the exception of fishing equipment and
balls for team sports, which now sit at the same level as in 2007. The most
significant drop in spending came within the watersports sector, which
experienced a 57.1% decrease in expenditure between 2007 and 2011.
The market is still largely reliant on imported sporting goods, with the
Peoples Republic of China (PRC) remaining the largest import market in
2011. Despite this, imports have reduced slightly in recent years while
exports have increased.

Sports Goods Industry has grown in Bangladesh territory since the colonial
era although its modernization took place only in the late 1990s. During the
Pakistan period, there was no Sports Shoes manufacturing firm producing on
a mass scale in East Bengal. However, traditional cottage type Sports Goods
industry with limited production facilities existed in a skeleton form in the
district towns at this time. Various types of Sports Goods were imported,
mainly from Calcutta. Many new smallSports Product manufacturing units
have been established recently.

The number of production units established in the country now represents 8.

Three of the units are, however, small and medium in size, and 5 of them are
relatively large and have mechanized and semi-mechanized production
technology.
The annual production capacities, combining all of the industries are about
46 million pieces of different category. Whereas, the production capacity of
ESL itself exceeds 6 million, of this more than 75% are produced by
mechanized and semi-mechanized units. The equipment produced annually
finds their way mainly into the export market. The industry provides direct
employment to about 10,000 people. Nearly 50% of them are engaged in
mechanized and semi-mechanized units and are classified, on the basis of
employees, as large, medium, and small. Women workers are predominant
(55%-60%) in the mechanized sector. About 80% of all manufacturing units
are located in Chittagong. Production of small units is processed manually on
the average.
Marketing of sports goods manufacturing and Exports are organized through
sales to foreign regional wholesalers and through them, to foreign retail
traders and consumers.
Bangladesh has gradually been converted from a sports goods importing
country to a sports goods exporting one. The annual export of sports items
has increased from Tk 289.6 million in 1996 to Taka 522.71 million in 2003.
The real development, however, has taken place since 1999, when exports
exceeded the Taka 2 billion mark. Exports of sports goods grew by 350% to
700% between 1997-98 and 1999-2000. The list of export markets of sports
goods from Bangladesh includes Japan, the volume leader with a market
share of 71%, followed by UK (2.21%), Belgium (18.36%), Korea Rep.
(1.26%), Italy (1.82%), Germany (0.69%) and USA (0.13%).

Export, Import and Balance of Trade of Bangladesh

By analyzing the current Export, Import and Balance of Trade statistics of
Bangladesh, the real scenario of Economic growth will be visualized clearly,
which has shown the overall impact of our Investment Climate, but if there is
a sound Investment Climate existed in our country, then the picture will be
different. The following graph represents the current Export, Import and
Balance of Trade statistics of Bangladesh.

Yearly Exports of Sports Goods

Year-Wise Exports of Sports Goods from Bangladesh (IN TOTAL)

Investment Scenario and Sports Goods Industry

According to a recent study of the World Bank, we have had few obstacles of
the Bangladeshi Sports Goods Industries. A sector like Sports Item Industry
might face the obstacles from the formation of the Company to reach the
product up to the consumers.
As most of the Sports Products Industries owners and as well as workers are
Bangladeshi so these Industries face same constrains and obstacles like
other existing industries. Prior to any kind of attempt to further Investment,
in this sector it is a pre-requisite, to enhance and also to oblige the predetermined procedures of the Investment regulations, of any sort towards
general Investment. Bangladesh has to face huge financial loss in future
unless and until problems are solved by the Government and other
regulatory bodies.

Problem Analysis and Searching Solutions

Status of Sports Goods Industry

This sector had to overcome enormous difficulties in the face of tough

international competition especially against China without any local
infrastructural support. The entrepreneurs set up these projects considering
the relative advantages of countrys cheap labor, when Taiwan and Korea
were the major producers of Sports Goods and China was almost absent in
the International market. Our Bangladeshi companies trying with their most
sincerity and to the best of their capabilities, to run their factories profitable.

But the actual picture is totally different; the exports of this sector are
completely knocked down. Four out of eight factories are completely closed
and rest factories are limping and are on the verge of closure. The
completely closed factories are; Meenhar Sport Ltd., Desma Industries Ltd.,
Impact Industries Ltd, and Continental Ltd. For this reason, a large amount of

Investment will go abortive. The main problems for this ineffective

Investment Climate for Sports Goods Industries are as follows.

Loan Liability
The loan liabilities of all the factories have mounted beyond their repayment
capabilities. According to present banking laws the banks are bound to file
case against the defaulters in the courts of bankruptcy. If banks take proper
action, repayment of banks loan will be uncertain, the country will be
deprived of foreign exchange, thousands of poor workers working in this
sector and their sister concerns will lose employment and the Investment of
450 crore (approx.) will turn into unproductive asset in this sector. Further
the ongoing other business of the same entrepreneurs will suffer huge loss or
bankruptcy.

Government Subsidy
Absence of Government Subsidy to the Sports sector, Manufactures and
Exporters are failed to bring balance in their high production cost leading to
closure of factories.

Money Devaluation
The recent economic crisis in Southeast Asia and massive currency
devaluation by the countries in the region put Bangladeshi entrepreneurs in
a difficult situation in the world export market and the competitors of
Bangladeshi exporters can sell their products at lower prices because of
higher currency devaluation in their countries.

Conflict between EPZ and out of EPZ factories

Out of eight, five Sports Goods industries are situated in EPZ and rest of
them are out of EPZ. One can believe that the factories which are in EPZ
enjoy various government facility, the answer is no, the facilities availed by
enterprises in EPZ are almost same as other with bond facilities outside EPZ.
There are no significant extra facilities to EPZ enterprises rather the EPZ
enterprises are subject to the following additional costs/ drawbacks:
Minimum wages for worker is fixed by EPZ in US$ and increases with the
devaluation which is not applicable outside EPZ.

CONCLUDING REMARKS

Unlike in neighboring and competitive countries of China, Indonesia, Vietnam

and Thailand, where the Sports Goods Industry saw varying degrees of
success over the last decade, the Sports Products Industry in Bangladesh
seems to have been stagnant in a seriously inefficient manner.

Sports shoes is a potential product for earning more foreign currency, but
these industries are now counting their date of closing. Solution needed very
early, so once again I would like to draw the attention of Government as well
as concerned authorities that, they should pay deep attention in a highly
potential industry like ESL for the betterment of the country. Otherwise the
total Investment in this sector will be smashed and thus the Investment
Climate, investing in Sport Goods Industry will be blocked.

Now a days Bangladesh has come to a much better Investment environment,

Foreign Direct Investment Boards (FDI), as well as Board of Investment (BOI),
and other business bodies of Bangladesh are much aware in the field of
Investment and promotion of Bangladesh Business status. In the upcoming
days, the over-all engagement Export & Import duties of the Business bodies

and authorities are becoming much more co-operative, together with the
Government towards a better developed business Investment Environment.

Key Note has forecast a 9.5% increase in consumer expenditure on sports

equipment over the next 5 years, with much of this driven by the 2012
Olympics and the investment in sporting activities and facilities that this is
likely to generate. Other sporting events, such as Euro 2012 in Poland and
the Ukraine and the 2014 Commonwealth Games in Glasgow, are likely to
further drive consumer interest in sport and thus sports equipment.