Key Takeaways
- The sporting goods industry faces a softer growth outlook of 6% annually (2024-2029), down from 7% in previous years, creating a dual focus on revenue growth and productivity improvements.
- Physical inactivity represents an untapped market of 1.8 billion people globally, with 31% of adults considered inactive—projected to reach 35% by 2030.
- Challenger brands have captured 3 percentage points of market share from major incumbents (Nike and Adidas) between 2019-2024 through sharper positioning and innovation.
- Active lifestyles are increasingly becoming central to consumer identities, with 51% of active consumers considering fitness essential to their identity.
- The resurgence of in-person fitness and live events is creating new opportunities at the intersection of sports, retail, and entertainment, with the global ticketing market expected to reach $150 billion by 2030.
FULL REPORT FROM McKinsey & Company
The Sporting Goods Industry in Transition
The sporting goods industry stands at a critical inflection point. After navigating the pandemic, supply chain disruptions, and shifting consumer behaviors, companies now face the challenge of balancing growth ambitions with operational efficiency in an increasingly competitive landscape.
According to the recently released “Sporting Goods 2025” report by McKinsey & Company and the World Federation of the Sporting Goods Industry (WFSGI), the sector’s growth rate is projected to moderate to 6% annually from 2024 to 2029, down from the 7% annual growth achieved between 2021 and 2024. This adjustment reflects broader economic uncertainties and evolving consumer preferences that are reshaping the competitive dynamics of the industry.
What’s particularly striking is that this transition isn’t occurring evenly. As WFSGI CEO Emma Zwiebler notes, “The sporting goods industry has persevered through economic volatility, geopolitical tensions, and evolving consumer behavior.” These forces are compelling executives to simultaneously focus on revenue growth and productivity improvements—a balancing act that only 3 in 10 sporting goods companies have successfully managed since 2018.
The Widening Activity Gap and Untapped Market Potential
Perhaps the most significant challenge and opportunity facing the sporting goods industry is the paradoxical trend in physical activity levels. Despite growing awareness of fitness benefits, global inactivity has jumped from 26% in 2010 to 31% in 2022, with projections suggesting this could reach 35% by 2030.
This trend represents both an existential threat and an enormous untapped market opportunity. The report calculates that approximately 1.8 billion people worldwide—equivalent to twice India’s adult population—currently don’t meet WHO’s recommended activity levels. Successfully converting even a fraction of this inactive population could drive substantial industry growth.
Several leading brands are already pioneering approaches to address this challenge:
- Product Innovation: Companies like Adidas (with its Stay in Play product line) and Nike (with its modest wear collection) are developing specialized products that remove barriers to activity for underserved demographics.
- Awareness Campaigns: New Balance’s “Run Your Way” and ASICS’s “Desk Break” initiatives aim to change perceptions about physical activity and make it more accessible and appealing.
- Youth Engagement: Shimano’s school bicycle club collaborations and Pentland’s Speedo Swim United initiative focus on creating early positive experiences with physical activity to foster lifelong habits.
For sporting goods executives, the ability to develop strategies that effectively convert inactive consumers into active ones may determine their long-term success in the market.
The Evolution of Active Identity
While physical inactivity represents one end of the spectrum, the report also identifies a growing cohort of “super active” consumers at the other end. For these individuals, physical activity has transitioned from a casual interest to a defining element of personal identity.
The survey data is revealing:
- 54% of active consumers prioritize exercise
- 51% regard fitness and an active lifestyle as essential to their identity
- 59% work out at least three times weekly
- One in four exercises nearly every day
This shift extends well beyond the decade-long athleisure trend, representing a more profound transformation in how consumers define themselves. As TRX CEO Jack Daly observes in the report, “Health, wellness, and fitness have become deeply ingrained in the culture—not only in the US but also across Europe and Asia, and it is emerging in the Middle East as well.”
For brands, this evolution presents significant opportunities to develop deeper emotional connections with consumers. Understanding that physical activity is no longer just about function but about identity allows companies to create products and experiences that resonate on a more profound level.
Market Share Upheaval: Challenger Brands Gaining Ground
One of the most striking findings in the report concerns the shifting competitive landscape. Between 2019 and 2024, large incumbents—namely Nike and Adidas—ceded approximately three percentage points of market share to challenger brands.
Several factors have contributed to this market share reshuffling:
Sharper Value Propositions
While large incumbents have traditionally cast wide nets across multiple sports, challenger brands have found success by focusing on specific segments and overlooked demographics. Companies like On, Hoka, and Arc’teryx have built sharply defined value propositions that connect with particular consumer niches.
Visible Innovation
Challenger brands have prioritized eye-catching features that resonate with consumers and define their products. Hoka’s oversized midsoles and On’s distinctive CloudTec soles serve as visual signifiers of innovation that capture consumer attention.
Cultural Marketing
Brands like Alo Yoga and New Balance have leveraged celebrity endorsements and cultural ties, while others like Gymshark and Vuori have built authenticity through grassroots marketing and community building.
Strategic Distribution
When major incumbents pivoted toward direct-to-consumer channels, challenger brands stepped into the wholesale vacuum, partnering with specialist retailers to gain credibility and expand their footprint.
This dynamic raises strategic questions for both established players and emerging brands. For incumbents, the challenge lies in refreshing their value propositions while maintaining scale. For challengers, the question becomes how to preserve the attributes that fueled their success as they pursue further growth.
The Convergence of Sports, Entertainment, and Retail
The final major trend identified in the report is the resurgence of in-person experiences and the blurring boundaries between sports, entertainment, and retail. After the isolation of the pandemic, consumers are seeking community and live experiences with unprecedented enthusiasm.
The McKinsey Sporting Goods Report Consumer Survey found that 81% of respondents attended in-person fitness classes in the past year—nearly two and a half times the number who used online fitness classes. This preference for in-person activities extends beyond fitness to spectator sports and entertainment events.
According to McKinsey estimates, the global ticketing market for live events surpassed $100 billion in 2023 and could reach $150 billion by 2030. This surge is driving several key developments:
Retail Spaces as Community Hubs
Sporting goods brands are transforming their retail locations into experiential venues that host events and foster community connections. Adidas reports that 50% of its customers feel more loyal to the brand because of its community-driven and hyperlocal events.
Mixed-Use Sports Facilities
New stadiums are increasingly designed as multipurpose complexes that blend live sports, entertainment, and retail. These venues generate year-round revenue and create vibrant community hubs.
New Sports Formats
Innovations like the Kings League in Spain and Baller League in Germany combine traditional sports with new entertainment-focused formats, attracting new audiences and providing fresh sponsorship opportunities.
For sporting goods companies, this trend creates opportunities to engage with consumers in more immersive and meaningful ways, strengthening brand loyalty while reaching new market segments.
Strategic Imperatives for Industry Leaders
Based on the report’s findings, sporting goods executives should consider several strategic imperatives as they navigate the evolving landscape:
Balance Growth and Productivity
With only 30% of sporting goods companies delivering both revenue growth and margin expansion since 2018, companies must pursue a dual agenda that addresses both top and bottom lines.
Target Untapped Markets
Converting physically inactive segments represents the industry’s single largest growth opportunity. Companies should develop strategies that remove barriers to activity and create accessible entry points for sedentary consumers.
Deepen Emotional Connections
For active consumers, brands need to go beyond functional benefits to connect with their sense of identity. Creating products and experiences that resonate emotionally is essential for building lasting loyalty.
Reassess Competitive Positioning
Both incumbents and challengers need to objectively evaluate their market positions. Large players must refresh their value propositions, while emerging brands must determine how to scale without losing their distinctive appeal.
Blend Physical and Digital Experiences
The resurgence of in-person fitness and events doesn’t eliminate the role of digital. The most successful companies will integrate both dimensions to create seamless, engaging consumer journeys.
Looking Ahead: Turning Uncertainty into Opportunity
The sporting goods industry faces significant challenges in the coming years—from economic uncertainties and changing consumer behaviors to rising inactivity levels and competitive disruption. However, these challenges also present substantial opportunities for companies willing to adapt and innovate.
As Decathlon’s global chief customer officer Celine Del Genes notes in the report, “Looking ahead to 2025, the industry will focus on driving top-line and bottom-line growth, as focusing just on one of the two will not be enough.”
The companies that succeed will be those that can effectively balance growth ambitions with operational discipline, connect with consumers on a deeper level, and turn the uncertainty of the current environment into competitive advantage.
By focusing on untapped markets, strengthening emotional connections with consumers, and creating innovative experiences that bridge physical and digital worlds, sporting goods companies can not only navigate the current challenges but emerge stronger and more resilient in the years ahead.
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Via: McKinsey & Company
