MKTG1250 - Australian Sportswear Market Analysis: RMIT Report 2019

This report provides an analysis of the fashion and textile industry in Australia, with a specific focus on the sportswear market. It examines the relative size, growth rate, and key players in the industry, including Rebel Sports, Lorna Jane, Adidas, and Nike. The report also delves into the macro and meso environments, identifying opportunities and threats to the sportswear industry, such as changing consumer behavior, government policies, and global economic conditions. Furthermore, it discusses critical drivers of change and concludes with recommendations for businesses operating in this market. This document is available on Desklib, a platform offering study tools and resources for students.

Running head: FASHION AND TEXTILE MANAGEMENT
Fashion and Textile Management
Name of the Student
Name of the University
Author Note

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Executive Summary
The report focuses on the fashion and textile industry of Australia. . Therefore the fashion
brands products are also creating serious competitions to the other brand in the world.
Moreover, they are creating amid fierce completions to the e-commerce business sites. The
improvement of Australian Textiles and apparel market is one of the key sources of revenue
generation in the total Australian economy. The report will specifically discuss about the
sportswear industry of Australia. The popularity of the sportswear brand in Australia is very
high. However, the apparel prices in Australia, is comparatively very high than other
countries in the world. The key players of this industry in this country and their competitions
in the market are highlighted. The market size, main competitors of the sports market
industry is discussed and in addition, various threats, opportunities of the new sportswear
business market are discussed in a brief manner

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Table of Contents
Introduction.......................................................................................................................3
TASKS..............................................................................................................................4
Relative size, growth rate and main players.....................................................................4
Macro environment...........................................................................................................5
The threats from the microenvironments to the sports wear industry as follows-............7
Meso environment, opportunities and threat....................................................................9
Three critical Drivers of Change....................................................................................10
Conclusion......................................................................................................................11
References.......................................................................................................................12
.

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Introduction
In Australia, in recent times the fashion industry has become one of the blooming
industry due to the improvement of various textile brands. Therefore the fashion brands
products are also creating serious competitions to the other brand in the world. Moreover,
they are creating amid fierce completions to the e-commerce business sites. The improvement
of Australian Textiles and apparel market is one of the key sources of revenue generation in
the total Australian economy. The popularity of the sportswear brand in Australia is very
high. However, the apparel prices in Australia, is comparatively very high than other
countries in the world. In various studies it is observed that, the Australian people are very
much associated in buying athleisure and sports wears. In this country, in recent time, the
woman are also showing significant interest in using sportswear and it is assumed that, the
women are the most unexplored section of this sportswear market in the Country. In studies it
is observed that, the sports footwear market of Australia is almost US$ 3.2 billion dollar in
the year of 2017, it is assumed that, the market it will be enhanced by many folds within a
few years with the growing fashion consciousness among the people of the country
(Youchum 2018). In addition, the advancement of the technology also promote the growth of
the overall foot wear market along with the sports shoes. Hence the women of the country in
recent times has also become, one of the major target area for the business of the company. In
this essay, the market size, main competitors of the sports market industry is discussed and in
addition, various threats, opportunities of the new sportswear business market are discussed
in a brief manner.

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TASKS
Relative size, growth rate and main players
In various studies it is observed that, almost 8.1% of total Australian people buy sports
wears that is both male and female buy those products within an average of 4 week period.
The amount is increased by 1.3 million that is 7% in the year of 2011. This overall data
suggested that, almost 300000 people started to purchase these sportswear products. In
studies it was observed that, the sports market in Australia will face a huge growth in the next
few years. It is assumed that, within 2020 the market will face almost 20% growth in the
market. There are there various sports wear companies who are the primary market share
holder of the sportswear industry in the country. From the market information of the
Australian sportswear it can be said that, although the industry has a high chances of growth,
the industry is not too big and it has immense competition in the industry. However, in last
two years, the industry has faced immense growth in the sports market. The key players in the
sports wear market in Australia, has been greatly operated by companies like Rebel Sports,
Lorna Jane, Adidas, Nike, JD sports ( Yochum 2014). The revenue of the Australian sports
wear market has faced a growth at CAGR of grew by 8.3% within 2006-12. Therefore it is
observed that, the men’s athletic foot wear market has the highest growth rate in the market
and as a result, it is the largest segment of this sportswear fashion industry. The JD sports has
become one of the biggest sports wear market stores in Australia and it has become the sports
wear giant in Australia in recent times. The contribution of this company was $3.05 billion in
2016 to the overall sports apparel market of Australia. Rebel Sports has become Australia’s
leading sports Wear Company in 2017 along with a customer satisfaction rate of 89.2%.
Therefore it was observed that, the Rebel sports had 21%5 market share in the men’s
sportswear section and on the other hand, the company had almost 12% share in the women’s

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sportswear market. While analysing the men’s sports foot wear market, it was observed that,
the company had almost 10% and simultaneously held 6% market share in the women’s
footwear industry of Australia. In case of NIKE, it was observed that, the company had
generated 34.4 billion US dollar in 2017 and on the other hand, another giant in the market
that is Adidas had generated annual revenue of 19.2 billion euro in the same year of
2017(Sparks and Letham 2018). Adidas had generated most of the revenues from their
selling of apparel and still foot wear is the biggest product category for sales of the company
in the country. On the other hand Nike had generated more revenue from the foot wear
segment of the company overall. Adidas is expecting a revenue growth of almost 10-12%
until the end of 2020. Another key market player in the sports wear market of Australia is the
Lorna Jane and it had the third highest market share in Australia. From various reports it
was observed that, the company had faced almost 52% profit growth in the year of 2013 and
the amount was almost $19.2 million (Sparks and Letham 2018). The total revenue of $138
million suggested that, there was 30% hike in overall revenue generation and the stores sales
were enhanced by 10.9%. Another key player of the industry is Lululemon had almost 335
stores in the country at the end of 2016. In the financial year of 2016, this company had
produced almost $6.8 million after the loss of $7.2 million in 2015. At the end of January, it
was reported that, the company had almost 16% hikes in the annual sales and the amount is
almost $98million.
Macro environment
A macro environment refers to that particular condition that is present in the economy
of a particular country and as a whole it can be said that, the microenvironment includes
spending, monetary and fiscal policy, trends in gross domestic products (GDP), employment
of the country. In this section, the threats and opportunities related to the macro environment

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of the Australian fashion industry are discussed in a brief manner. The primary opportunities
of the sports wear fashion industry are as follows-
A) From various industry reports it was observed that, the fashion industry is one of
the major segments of the market of the Australian market. Even the online
market survey also showed that, sports fashion wear buying is one of the primary
buying tendencies of the buyers of Australia. In the year of 2016, almost 16.7%
growth was observed in the buying of fashion textiles in Australia. Therefore it
was also noted that, the Australian women have also become very interested in
buying sports wear and this changed consumer behaviour can be an opportunities
for the new start up businesses (Borland and Coelli 2016).
B) According to a report it was observed that Australians are spending almost $1400
per year for buying sports year and more specifically it can be said that they
spends the money for buying gym wears. It is assumed that Australia is one of the
biggest market of spending their money in buying the active wears or sportswear.
The reports of Forbes also predicted that the trends of fitness wear buying will
stay in the market of Australia. The overall sales of such products in the world
will face a growth of almost $83 billion by the end of 2020. This global trend of
popularity of this sportswear product will also help to generate more revenue in
Australia.
C) In order to reduce the impact of global economic crisis on the economy of
Australia, the government had planned to reduce the federal public debt by
running budget surpluses . It is expected that, this policy will help to enable the
debt retirement and as a result the foreign public debt of Australia will be
reduced. According to the government of the country, it was stated that, the
economic surpluses are required for eliminating the foreign debt, restoring the net

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worth to zero and to balance the budget over the cycle. For example it can be said
that, for restoring the net worth within the 10 years, 3.6% GDP should be
maintained for 5 years or 2%^ of GDP for 10 years continuously. On the other
hand, to nullify the foreign public debt, the budget surpluses should be 4.7% of
GDP for 5 years or 2.6% of GDP for 10 years continuously (Shahiduzzaman and
Alam 2014).
The threats from the microenvironments to the sports wear industry as follows-
A) In the year of 2016, the estimated population of the Australia was almost
24.281 million and it was assumed that the population will touch the mark of
26.42 million by the end of 2022 million. Australia’s real GDP was almost
AUD 1677.47 billions in 2016 and the nominal GDP wasAUD1
692.43 billions. This resulted in a GDP deflator 100.892. On the other han
d the per capita GDP was calculated as USD 51850.27 ( approx..) and the
purchasing power parity or PPP based capita GDP was estimated as
USD 1187.32. Hence, it can be said that the in 2016,
he output gap for Australia was almost 1.561% of the potential GDP and it
indicated that, the Australian economy was underperforming. In 2016, the
gross revenue of the Australian Government was almost 586.179 billion and
on the other hand the expenditure was almost 632.074 billion and as a result
government has the net negative lending of almost 45.895 billion in the
market. This negative borrowing trends of the government indicated that, in
future the condition will be worse in terms of negative lending. Hence this
negative economic condition will create serious threat in the way of creating
new sports fashion business of the country (Shahiduzzaman and Alam 2014).

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A deficit in the GDP of the country also contributed to the lowering of the
income of the people in the country and this will negatively impact the
purchasing power of the citizens of the country. The lower commodity prices
also contributes in the weakening of the exchange rate of the money.
B) The global economic crisis also contributed in the Australia’s economy in a
negative way. The economic crisis was initially transmitted to Australian
economy from the North Atlantic economic region. This negative impact on
the economy contributed to the unemployment issues of the countries. From
the report of Australian Bureau of Statistics (ABS), it was observed that, the
unemployment rate in the country was almost 5.4 to 5.6 % in 2018 ( Mucci et
al. 2016). Moreover, the added jobs in the market of Australia failed to meet
the expectations of annual job growth. This, unemployment among the new
generations of the country will affect the purchasing behaviour of the citizens
of the country and this may affect the new business of sports wears as mostly
the new generations are associated with the buying of those sports wears.
C) The fiscal policy of the Australian government can be another serious threat to
the business of sports wears business in Australia. The fiscal policy of the
country contributed to the weakening of the economy by strengthening the
exchange rate. Although, the policy helped to improve the exchange rate, this
policy seriously promoted the unproductive expenditure in spite of reliving
taxes, lowering the regulatory burden on the business. The distressed banking
system of US federal reserve bank and Bank of England also contributed to
the Australian economic problems (Miyazaki 2014).

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Meso environment, opportunities and threat
A meso-environment refers to the level between the micro and macro environment of
the business and that may include the physical infrastructure that is transport,
communication , sector policies, technical policies, environmental norms. The possible
threats and opportunities of the sports wear industry are discussed in this section. The
opportunities are as follows-
A) Australia is related with the global economy through the air movements and
shipping and by using those transport system, Australia can export their products
to various countries. This active transport system will also help the new business
in generating revenue. In addition, the cities of Australia are interconnected
through the roads, rail , costal ports and air transport. This will help the new
business start up in merchandising their product without much problems.
B) The taxation policy for the start up business sector can be another opportunity for
the new sports wear business in the Australia. The government has introduced a
new tax policy for the start up business. In the new PAYG instalments policy of
the Australian government will allow the new business owners to pay their taxes
through instalments after the reaching of the business to a certain amount.
C) The sustainable fashion market of the country is trying to establish a powerful
impact on the global fashion industry. The sports wear business companies are not
so far behind. This sustainable nature of the market will help the new start up to
grow in the market ( Hodges et al. 2015).
The threats of the new business are as follows-
A) The presence of other global competitors in the sports wear market of
Australia, may create immense threat to the new business as they are

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technically advanced in comparison with the new business start-ups (Mullin,
Hardy and Sutton 2014).
B) The use of modern technologies in identifying the modern consumer by using
the concepts of emotional economy in which artificial intelligence is used to
identify the customer needs. Bigger companies are far ahead in using
technologies in comparison with the new start-up business ( Ottman 2017).
C) The online platform will not initially collaborate with the new companies and
this can be a big threat as bigger companies can sell their products in the e-
commerce sites (Trottie 2016).
Three critical Drivers of Change
From the analysis of the market of the fashion industry of Australia, a few points are
detected that should be promoted as opportunities for the new start up business. Therefore, in
case of threats to the business, it should be recommended to process of minimizing those
threats for the new business start-ups of sports wear in the industry.
a) From the analysis, it is noted that, the lack of using modern technology in the new
business can be meso environment threat to the new company. In order to
minimize this threats, the new companies should use more technology in their
business process such as AI technology and this will help them in establishing
brand integrity of the company (Glendon and Clarke 2015.)
b) They should make tie up with the e-commerce sites so that they can sell their
products and simultaneously reducing the marketing costs of their product ( Sigala
2017).
c) From the analysis, it is noted that, the young generation of the country are mostly
attracted towards the fitness products such as gym dresses, sports shoes. So the

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new company should select this new generation as a target population and they
should be given more offers in order to enhance their sell in the market ( Knoll
2016).
Conclusion
Hence, it can be concluded that, the fashion and retail industry is a blooming one in
Australia and the sportswear business is not far behind. Along with other foreign companies,
Australian companies are also generating revenue in the country. Although there are many
threats and opportunities for the new business in the country and those can be addressed by
using several strategies in. The macro and meso environment analysis of the fashion industry
will help the new business to grow in a proper way.

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References
Borland, J. and Coelli, M., 2016. Labour market inequality in Australia. Economic
Record, 92(299), pp.517-547.
Glendon, A.I. and Clarke, S., 2015. Human safety and risk management: A psychological
perspective. Crc Press.
Hodges, N., Watchravesringkan, K., Yurchisin, J., Karpova, E., Marcketti, S., Hegland, J.,
Yan, R.N. and Childs, M., 2015. Women and apparel entrepreneurship: An exploration of
small business challenges and strategies in three countries. International Journal of Gender
and Entrepreneurship, 7(2), pp.191-213.
Knoll, J., 2016. Advertising in social media: a review of empirical evidence. International
Journal of Advertising, 35(2), pp.266-300.
Miyazaki, T., 2014. Fiscal reform and fiscal sustainability: Evidence from Australia and
Sweden. International Review of Economics & Finance, 33, pp.141-151.
Mucci, N., Giorgi, G., Roncaioli, M., Perez, J.F. and Arcangeli, G., 2016. The correlation
between stress and economic crisis: a systematic review. Neuropsychiatric disease and
treatment, 12, p.983.
Mullin, B.J., Hardy, S. and Sutton, W., 2014. Sport Marketing 4th Edition. Human Kinetics.
Ottman, J., 2017. The new rules of green marketing: Strategies, tools, and inspiration for
sustainable branding. Routledge.
Shahiduzzaman, M. and Alam, K., 2014. A reassessment of energy and GDP relationship: the
case of Australia. Environment, development and sustainability, 16(2), pp.323-344.

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Sigala, M., 2017. Collaborative commerce in tourism: implications for research and
industry. Current Issues in Tourism, 20(4), pp.346-355.
Sparks, L. and Letham, S., 2018, May. Sport and Retailing. In Managing Sport Business: An
Introduction (pp. 346-363). Routledge/Taylor & Francis Group.
Trottier, D., 2016. Social media as surveillance: Rethinking visibility in a converging world.
Routledge.
Yochum, D.J., 2014. Sports fashion memorabilia and construction process. U.S. Patent
8,893,418.