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TRENDS & INSIGHTSIndustry analysis
Trend in the Sports Activities Industry (Year 2023)
Trend in the Sports Activities Industry
According to the 11th amendment of Standard Industrial Classification which was promulgated by the Directorate General of Budget, Accounting and Statistics in 2021, the “sports activities industry” is “the business involving in Professional sports activities, Operation of Sports Facilities, and Other Sports Activities,” including the economic activities as following:Figure 1 Classification and categories of the sports activities
Source: Standard Industrial Classification by National Statistics
There is a wide range of businesses under the umbrella of the sports activities industry. The earlier emphasis on the industry was manufacturing sports equipment which leads to a relatively mature supply chain in Taiwan. Yet, the demand for sports activities is booming with the growing gross national income (GNI) and customers’ attention to a healthier lifestyle.
In addition, hoping to encourage people to merge sports into their lives, cultivate their lifelong habit of exercising, and raise their physical fitness, the Taiwanese government promotes policies to increase people’s interest in sports and expand the sports activities market.
The COVID-19 epidemic raised people’s attention to their health. According to a survey from the Sports Administration, the Ministry of Education in 2022, the participation rate in sports was 81.8%, and it was the first time that the regular exercising population reached 34.0% since 2014. The survey shows because of the policies, more and more people pay attention to health and are accustomed to exercising.
Statistics from the Ministry of Finance, R.O.C. show that the number of businesses in the sports activities industry has increased in the past five years. (Graph 1) From 2018 to 2022, the number increased from 2,280 to 3,916, and the average growth rate was 14.5%.
In addition, hoping to encourage people to merge sports into their lives, cultivate their lifelong habit of exercising, and raise their physical fitness, the Taiwanese government promotes policies to increase people’s interest in sports and expand the sports activities market.
The COVID-19 epidemic raised people’s attention to their health. According to a survey from the Sports Administration, the Ministry of Education in 2022, the participation rate in sports was 81.8%, and it was the first time that the regular exercising population reached 34.0% since 2014. The survey shows because of the policies, more and more people pay attention to health and are accustomed to exercising.
Statistics from the Ministry of Finance, R.O.C. show that the number of businesses in the sports activities industry has increased in the past five years. (Graph 1) From 2018 to 2022, the number increased from 2,280 to 3,916, and the average growth rate was 14.5%.
Graph 1 The number of companies in the sports activities industry from 2018 to 2022.
Observing the trend of the sports activities industry (Graph 2), its revenue was 28.65 billion TWD under the impact of the COVID-19 epidemic which decreased by 16.3 percentage points. Yet, as society recovered from the epidemic, sports venues reopened their doors, and restrictions on outdoor sports were loosened, the exercising population gradually increased. In 2022, the revenue was 36.86 billion TWD, sharply rising by 28.6% from the previous year. It was the highest number in the past five years. Although the five-year revenues were affected by the epidemic and significantly decreased in 2021, the trend was still growing.
Graph 2 The revenue generated by the Sports Activities Industry from 2018 to 2022
According to the survey of the Sports Expenditure of the People of Taiwan, customers mostly pay for course fees, entry fees, memberships, and field renting fees from 2017 to 2021, which reflects Taiwanese people’s willingness to spend money on participating in sports activities. Statistics from the Ministry of Finance also show that the number of sports venues increased from 1,716 to 2,434 between 2018 and 2022 (Graph 3). The average growth rate was 9.2%.
Graph 3 The number of the business of sports venues in Taiwan from 2018 to 2022.
The revenue generated by the booming sports venues was growing from 2018 to 2020. (Graph 4) However, to follow the epidemic prevention policies in 2021, the venues closed temporarily due to the announcement of the Nationwide Level 3 Alert. The revenue was impacted and dropped to 24.38 billion TWD. However, while the policies were gradually loosened, and sporting venues reopened, customers returned to these places. The revenue in 2022 grew to 30.66 billion TWD, which increased by 25.8%, and that was the highest number in the past few years.
Graph 4 The revenue generated by the business of sports venues from 2018 to 2022.
The Ministry of Finance statistics show that gyms and health clubs account for the most significant number of sports venues. Their number increased from 482 to 894 from 2018 to 2022, and the annual average growth rate was 16.9% (Graph 5).
Graph 5 The number of gyms and health clubs in Taiwan from 2018 to 2022.
Furthermore, with the expectation to reduce positive COVID-19 cases, the government announced guidelines for gyms, which were risky environments for customers to be exposed to the disease. Since customers reduced their frequency of entering these places, the revenues generated by gyms and health clubs in 2021 dramatically dropped to 12.36 billion TWD, a decrease of 18.7% from the last year. (Graph 6) After the policies were loosened and customers returned to gyms, the revenue in 2022 increased to 15.34 billion TWD, which was the highest amount in the past five years.
Graph6 The revenue generated by gyms and health clubs in Taiwan from 2018 to 2022
Concluding from the analysis above, with the encouragement from the government and the increasing consciousness of health, Taiwanese people gradually cultivate their habits to exercise, which leads to increasing demands for sports-related services. Practitioners see it as a promising market and continue to engage in the industry. In the year 2021, the domestic COVID-19 cases increased and the government announced the Nationwide Level 3 Alert, the number of sports activities businesses was still growing. Businesses applied diversification strategy. Besides the mid- to large-sized fitness centers, there were studios and gyms designed for specific groups of customers or providing customized training, which provided multiple options to people.
With the rapid development of technology, the services or products combining technology and sports such as virtual reality, artificial intelligence, wearable technology, Internet of things, and big data analytics showed up before the COVID-19 epidemic. The applying combination of sports and technology was even closer during the epidemic.
Take public sports centers for example. Numerous sports equipment were introduced during their renovation, such as intelligent badminton courts, future baseball batting centers, light-powered sports mats, virtual shooting VRBOX, immersive cycling courses, and indoor golf simulators, bringing new exercising experiences to the public.
With the rapid development of technology, the services or products combining technology and sports such as virtual reality, artificial intelligence, wearable technology, Internet of things, and big data analytics showed up before the COVID-19 epidemic. The applying combination of sports and technology was even closer during the epidemic.
Take public sports centers for example. Numerous sports equipment were introduced during their renovation, such as intelligent badminton courts, future baseball batting centers, light-powered sports mats, virtual shooting VRBOX, immersive cycling courses, and indoor golf simulators, bringing new exercising experiences to the public.