Expanding Your Sportswear Brand Globally: Key Strategies and Tips

• Understanding Global Market Dynamics: The Need For Global Expansion
• The Right Entry Mode For Your International Expansion
• Winning Strategies For Global Expansion
• It’s a Global Village

Market dynamics are particularly important for sportswear brands, as the global market size is projected to grow from $412.82 billion in 2022 to $748.79 billion by 2031. And the forces shaping the market dictate the direction a brand needs to follow. Let’s take a look at the trends and drivers of global expansion.

Emerging Markets

Traditionally, North America and Europe have been the key players in the sportswear market, fueled by strong government investments and a passionate consumer base. In fact, North America leads the sportswear market with a share of 45% in global revenues. 

But now, it’s the previously overlooked markets like Asia-Pacific, the Middle East, Africa, and Latin America where the real growth is happening. A rising middle class, a youthful population, increasing disposable incomes, and greater government support for sports are driving demand. The Asia-Pacific (APAC) region is expected to grow at a solid 8.6% CAGR, making it impossible for brands to ignore.

Meanwhile, the LAMEA region (Latin America, Middle East, and Africa)—with standout countries like Brazil, Saudi Arabia, the UAE, and South Africa—is also showing promising growth. Although the current boom is concentrated in just a few countries, this is expected to expand, offering brands an exciting opportunity for the future.

Geographical Diversification

Geographic diversification offers a reliable shield against the vagaries of the market. In times of economic downturn, having a presence in international markets can protect a company’s bottom line. This is possible because the negative growth in one market can be offset by improved performance in another. It is therefore a strategic response to adapt to minimise risk and achieve operational flexibility.

First Mover Advantage

Expanding your business into an untapped market gives you a natural advantage over the competition. Being the first to introduce a product instantly boosts brand recognition and awareness. First movers also benefit from early access to key resources like talent, technology, and prime locations. Take Nike, for example—they've been in China since 1981 and have firmly cemented their brand in the minds of consumers. By 2023, they held the largest share (17.9%) of the Chinese athletic apparel market.

Product Diversification

Product diversification can be both a cause and effect of expanding globally. As a cause, it gives companies a reason to explore untapped markets to test new product lines. They can introduce new products and unique products to overcome saturation in the home market and efficiently utilise manufacturing resources.

Product diversification can also be an effect of entering a new market. Brands like Puma adapt their products to regional preferences as a strategy to succeed in overseas markets. A case in point is Puma’s range of cricket-specific apparel to cater to the Indian demographic.

When expanding internationally, businesses typically adopt one of three strategic pathways, each differing in its degree of centralization and focus. A multidomestic strategy emphasises adapting to local markets, allowing brands to tailor their products and operations to specific regions. For instance, Puma's “China-for-China” strategy involves designing collections based on Chinese preferences and adjusting its distribution and store experience to suit the local market. In contrast, a global strategy is more centralised, prioritising efficiency over localization. This approach often sees less adaptation to local needs, which can lead to challenges, as seen with Decathlon's struggles in China due to its insufficient localization. A transnational strategy, on the other hand, seeks a middle ground, blending efficiency with some degree of localization. Adidas exemplifies this approach by maintaining a globally integrated marketing and supply chain system while still curating regional nuances.

So, which one should you select for your brand? Entry mode selection is a crucial aspect that requires a thorough analysis of internal and external factors.  The decision will depend on the social, political, environmental, and economic conditions in the target market and the risk appetite of your brand. Broadly speaking there are two modes of international entry:

1) Non-equity modes like exports, licensing, and franchising rely on contractual arrangements and do not involve any equity investment. Such methods are preferable for countries where the resource advantage is high, the market is uncertain, or you are testing a new product.

Example: American Sportswear brand, Under Armour, has recently entered Brazil by signing an agreement with Brazil-based Vulcabras, for exclusive distribution and licensing of its products in the country.

2) Equity modes of entry, like joint ventures and Foreign Direct Investments involve direct investments by the company. Such modes are high-risk but also offer greater market control to the company. As such they are utilised best in markets where companies have high commitment.

Example: Adidas entered the Indian market in 1996 by setting up a 100% subsidiary and eventually entering into a JV with Magnum International and holding 80% equity.

There is no singular approach to business success in international markets. Rather it is a culmination of tactics applied in the right scenario and at the opportune time. Below are a few strategies to navigate the complex waters of foreign shores.

1. Adaptation

Adapting your product to the local flavor is crucial when entering a foreign market. How well your product responds to and understands the consumer's preferences will determine your brand’s success. In fact, highly successful brands are moving towards hyper-localization to overcome the intense competition. Nike practices this strategy in all new markets that it enters. In China, for example, it caters to the Chinese taste by incorporating red and gold colors that reflect traditional Chinese design elements. It has also set up a creative studio, Icon Shanghai, specifically with the intent of translating its global messaging to content that resonates locally.

This strategy of localization is not limited to the product but extends to brand communication as well. The entire marketing and advertising mix must be designed to build an emotional connection with the customer. This is exactly how Puma operates. To maintain strong local relevance, Puma puts immense focus on sports, brand ambassadors, and communication in each market. Some examples of this strategy are Puma’s presence on locally popular chat platforms like Weibo and WeChat in China, partnering with Virat Kohli for the cricket-crazy Indian market, and launching football-focused collections in Brazil.

2. Cross-Partnerships

Collaborations and cross-partnerships can help brands gain unique insights and local perspectives. This creativity can be leveraged to adapt better to market conditions and respond more quickly in a crisis. Cross-industry collaborations also offer new revenue streams and a more agile business model. Take the Decathlon Partnership Program, for example, which has helped the brand penetrate deeper into the cultures of new markets. Any organisation with sports or a healthy lifestyle as its focus can partner with Decathlon. By offering community space, introducing new games, hosting events, and more, Decathlon is able to leverage its existing customer base to expand its reach.

3. Market research

Most companies stop market research once the business is established in a country. However, this process needs to be ongoing. Markets and consumers are constantly evolving, and to stay in sync, brands must do the same. This is especially true in foreign markets where a brand is still establishing its presence. Local players often have a deeper understanding of the market, giving them a natural advantage. Ongoing research can help offset this to some extent. By continually studying the market, you can uncover new opportunities and gain a comprehensive understanding of the competition. Both factors help your brand improve its offerings and stay ahead. Brands like Adidas conduct extensive market research to deepen their understanding of the consumer. These insights are then used to design more effective market and product strategies. As Joseph Godsey, Global Head of Digital Brand Commerce at Adidas, says: “As an organisation, we openly talk about the importance of taking risks and the important role innovation plays in everyday work. We’re better at both when we’re using data and insights.”

4. Competitive Pricing

Of all the elements in the international marketing mix, price is the most relevant in emerging markets. Consumers in developing nations tend to be extremely price-sensitive and value-conscious. These markets are highly competitive, with numerous international and local players vying to acquire and retain customers. Therefore, your pricing strategy must be carefully evaluated and implemented. The key is to reflect your product’s value while staying within the customer's budget. Many brands offer both budget-friendly and high-end options to cater to emerging markets.

Consider Columbia Sportswear’s value-based pricing strategy. The brand’s pricing is based on a careful assessment of the product’s features, perceived value, and benefits. However, they also charge premium prices for products that include special features, such as their omni-heat reflective technology for improved insulation.

5. Ecommerce and Digital Expansion

Global ecommerce is currently at an estimated 5.8 trillion U.S. dollars and is further expected to grow by 9.49% in the 2024-2029 period. The digital world is the easiest way to take your products to new markets and establish a presence. Regardless of the region, the most important aspect of online sales today is a strong website and social media presence. Take a page out of Puma’s ecommerce strategy to understand the power of online sales. Puma leverages cloud data, analytics, and AI solutions to enhance the online retail experience. The brand has partnered with several tech companies to improve various aspects of its digital presence, including its mobile app. Additionally, Puma actively collaborates with celebrities and social media influencers to promote both existing and new collections. The result has been a sharp increase in sales and a deeper understanding of consumer needs.

Canadian theorist Marshall McLuhan believed that technology would transform the world into a global village, where everything is interconnected. This concept extends to businesses as well. As the demand for fitness and sports grows worldwide, the time is ripe for sportswear brands to expand and explore new markets.