Analysis of Indias Sports Goods Industry

Analysis of Indias Sports corking enoughs manufacturingThe Sports Goods Industry was founded by Sardar Bahadur, Sardar Ganda Singh Oberoi in the stratum 1883 at Sialkot and Sports Equipment became the first Indian Industrial Product to be exported in 1885.The Sports Good Sector consists of both organised and unorganized sections of the constancy. The Indian Sports Goods Industry consequently has its origins in Sialkot, Pakistan. When India got partiti wholenessd in 1947, many a(prenominal) Hindu artisans mig appreciated from Sialkot to Punjab and Uttar Pradesh in India. Jalandhar is the just about primary centre of Indias Sports Goods Industry fol lowlyed by Meerut in UP and Gurgaon in Harayana.India is adept of the largest producers of footballs and other inflated balls. The Indian Sports Goods Industry has gr accept tremendously since 1947. about of the carrefours similar play bat, ball, football and nets have been steadily relieve oneselfing fame all over the orb .The Sports matures Industry has grown by leaps and bounds in the past five decades and has contributed signifi dejectiontly to the Indian Economy by way generating employment, exploiting the rural and urban potential and similarly by way of exports, which ar increasing any year.The Indian childs plays goods attention manufactures to a greater extent(prenominal) than 300 items. United kingdom is the one of the study deductioner of sports goods manufacture in India followed by countries c atomic number 18 regular army, Germany, France and Australia.some(a) of the major items that ar exported include inflatable balls, hockey sticks and balls, play bats and balls, box equipment, fi spit outg equipment, indoor games like Carrom and Chess tabular arrays and some(prenominal) protective items.The sports Goods Industry frankincense set asides a useful livelihood avenue and has helped preserve handed-down scientific disciplines acquired over generations. As some exquisite sports products require highly arch(prenominal) processes to be followed for their business, the need for skilled change by reversalers in the assiduity is even to a greater extent prominent inspite of the introduction of automated systems.After liberalization of India and introduction of the WTO agreements, sports goods heavens is experiencing tremendous competition from foreign notices.Currently, the industry in mainly center in the small-scale and cottage welkin backed by some of the governments liberalized industrial policies. there is excessively a wide scope for amelio wander the marketing of products and modernizing the engineering science used for manufacturing them.SPORTS GOODS INDUSTRY IN INDIAThe Sports goods industry is dissever into various manufacturing thumpings. We would be discussing the clumps of Jalandhar, Meerut and Kashmir in detail as followsManufacturing cluster of JalandharThis cluster is called a transplanted cluster, as a major segment of th is cluster which was earlier part of Sialkot, Pakistan moved to Jalandhar on Indias partition. It is an strategic provider of quality sports goods to more than 130 countries including some of the developed nations of the world. The Jalandhar cluster is in any case the unless cluster to introduce the concept of machine-stitched footballs to meet the demands of the FIFA world cup 2010 and beyond.Skilled workers set-aside(p) in this industry ar the most important parts elements in the production and are settled in camps adjacent to the manufacturing unit. The entrepreneurs setting up modern units with outfit production systems are teddy to open lieu with more area to achieve better results and are forth from displace localities. The official estimate of the substance number of persons works in the industry in about 1,70,000 while the unofficial estimate is 3,00,000.MANUFACTURING CLUSTER OF MEERUTThere are about 1250 registered and 2000 unregistered big and small sports goo ds manufacturing units providing direct and indirect employment to approximately 70,000 persons in the Meerut District of Uttar Pradesh. Supporting organizations have also grown to come out adequate quantity of desolate materials to the sports goods industry and to provide training to the workers during the last few years. At the same time many schemes are operational for the teaching of the cluster. If given(p) the right business luck to the sports goods manufacturers, this cluster can flourish.The production is low because the units are not mechanized as only 20% of them use machinery. Also latest technology is not available which acts as a deterrent in score to be of the competition from china, Pakistan, etc. About 60% total production is organism exported to Australia, federation Africa, England, America, West-Indies, New Zealand, Zimbabwe, Bangladesh etc., through middle men and the remaining products are exchange in the national market across India.There are various government bodies that help in the monitoring the progress and schooling of the cluster. These are listed and described briefly as on a lower floorDirectorate of Industries, U.P. This presidency body is supporting the cluster in each respect by providing training, Technical Support etc.Process cum Product suppuration Centre (PPDC) It meets the technical needs of sports goods industry throughout the acres in collaboration with Govt. of U.P. in all India Sports Goods Manufacturers Federation (AISGMF) It supplies the information, technology and technical training to the Industry. It also arranges the raw material for the Industry.Export Promotion Bureau It helps the small manufacturers to make their product in one platform or the other so that they could export their product to other countries on low bells.Cricket balmy Manufacturing Cluster in KashmirThe history of play bat industry in Kashmir goes back to pre-partition eld when Sialkot (Pakistan) was the sports goods cent re. With the partition of the Indian sub-continent, the skilled craftsmen of Sialkot shifted to Jalandhar, Meerut and the cleft makers of Kashmir sullen toward newly established centers. In due course of time, the demand of the cricket bats in the country increased and cricket bats started getting fabricate to meet this demand.The finest willow is English Willow, followed by Kashmir Willow for manufacturing cricket bats. Over 80% of all cricket bats today are manufactured in Jalandhar, Meerut, Kashmir and Jammu cities. All of them depend on Kashmir for their willow clefts. humanness famous Kashmir Cricket bats industry is now facing a slow death. Cricket Bat Manufacturers Association revealed that out of a total 300 cricket bat manufacturing units in Kashmir valley, half of them have keep out their units. The cricket bat industry is battling for survival in the state. Jammu region, which boasted of 77 cricket bat manufacturing units a few years back, has now a uncorrupted 10 u nits, while the scenario in Kashmir valley is no different.Major Sports Goods drudgery Centers/Clusters and Product CategoriesMajor Sports Goods manufacturing clusters and major product categories of sports goods produced are compiled in the quest tableSl. No.Location/ClusterMajor Product Categories1.Jalandhar expansive ball( Soccer /Rugby/Volley/Net/ Hand Basket ball) in PU PVCBoxing EquipmentCricket EquipmentSports ware row and playing field EquipmentsSports Training equipment hockey game EquipmentHockey Foam Moulded Goalie Range ShipguardsAll kinds of Nettings2.MeerutWeight Lifting EquipmentCricket EquipmentsAthletics EquipmentsBoxing EquipmentsTable TennisBadmintonCarrom boardFitness and Exercise equipmentLane MarkersBasket ballNetball ringsTT accessoriesSports Apparel3.Jammu KashmirCricket Bats4.DelhiFootballCarrom be onChessCricket EquipmentBilliards/Snooker/Pool TablesAccessoriesFootball BladdersBoxing equipmentPunchingSports HelmetsEducational PuzzlesBoard Games5.Gurg aongolf game EquipmentBoard Games6.MumbaiWater Park SlidesCarrom BoardPaygroundFitness EquipmentSports NetsHelmets7.KolkataSkipping ropeCarrom BoardMagic tricks magic apparatus8.ChennaiTennis Balls, Sports Shoes and Apparels9.BangaloreBowling EquipmentsSports Medals Trophies lyceumnasium Health EquipmentsProductivity Growth of Indian Sports Goods SectorIndian sports good sector is a fast growing revenue generating sector. Industry is gather mainly at Jalandhar, Meerut and Jammu belt providing high employment to locals. Industry is bolstered by high labour productivity, low wage rates and high skill sets of labour class involved. Indian sport goods industry has dualistic genius with cheap skilled labour as one pillar and handsewn product being the other.Sports Goods sector in India comprises of organized sector which is registered under FACTORY ACT 1948 and unorganized sector (cottage industry) scattered around sports regulate of Jalandhar and Meerut. Recent globalization an d skilled labour has increased productivity which resulted in significant portion of total product exported from India.Fig. 1 Labour, Capital and marrow factor Productivity Growth IndicesFrom the above graph we can purpose that capital productivity has increased but the same plosive witnessed bloodline of labour productivity and total factor productivity. This aspects requires high capital investment, FDI investigate and Development for debottlenecking the growth and production.Export Competitiveness of Indian Sports Goods IndustrySports good market is facing an all out competition with expansion of sport behemoths like NIKE, ADIDAS, PUMA and REEBOK. Inspite of all these factors Indian sports goods industry has shown tremendous growth. ameliorate operation strategies, aggressive marketing and investment in Research and cultivation has increased the quality production and stamped India as one of major supplier of light goods in global arenas. The internationalistic mark et awareness resulted in revamp of the industry, instigating better product development and diversification trends.Impact of above can be seen in double digit growth rate (in RS) of Sports industry in last financial year when other sectors where facing growth crunch because of global recession.Overall Export Performance of Sports Goods from India fit to Sports Goods Export Promotion Council (SGEPC) total export value of Indian sports industry is estimates to be around Rs 586 crores. This shows year on year growth rate of 13%.Top 5 performers which constituted for more than 60% of the total export value are Hammocks, Inflatable Balls, Boxing Equipment, Cricket Bats global Exercise Equipment. In this Hammocks recorded a massive growth of 76% (in Rs).Indias Export of Major Sports Goods 2002-03 to 2008-09Country Wise Export of Sports GoodsFinancial year 2008-2009 saw increase in export destination from 127 countries(2007-2008) to 137 countries (2008-2009).Top 5 destinations includes U.S.A, U.K., Germany, Australia, South Africa and accounted for 70% of the total export by industry.Indias Export of Sports Goods 2004-2005 to 2008-09(Rs in crore)During period 2003-2004 to 2007-2008 Export and import Trade ratio shows that India was net importer of Table-Tennis equipments ,Lawn Tennis and badminton rackets, Track and fields equipments .During the same period India was a net exporter of Cricket balls, Hockey sticks, Cricket bats, Fish hooks and other line fish nets. recent GOVERNMENT POLICIES FAVOURING SPORTS GOODS INDUSTRYGlobal Scenario in the Sports Goods IndustryThe Sports goods manufacturing industry is favorable owing to the large scale viewership of sports and the overall sports industry reaching the dizzying high gear of $ 500 million this year. Thus there are even more people who are keen to join this bandwagon and look at sport as not just a hobby but as a serious retail manufacturing business.With the major clean events marketed in a grandeur fashion coupled with the dire need for corporate brains to simulate the health is wealth concept, more individuals are purchasing sports goods there by promoting the global sports goods industry to elevated heights.Online sales of sports goods is booming at 32% increase over the 12 months end of June 09. Thus selling on the net has many opportunities for sport brands, when many new retailers are first appearance the market on a regular basis.An independent association called The institution Federation of the Sporting Goods Industry (WFSGI) is formed by global manufacturers, retailers, suppliers, country specific federations and other sporting brands and goods related businesses. It is the world body for sporting goods industry and the IOC also recognizes it within its Olympic family. The WFSGI does not work for its own gain and is a non-profit organization helping the conglomerate of sporting bodies to work together.The WFSGI helps the promotion of f product line trade wherein more peopl e are actively involved in sports both as a business and a career. The federation updates its members on important laws and regulations for product safety and purifyd working conditions. They represent the sporting goods industry and are like a tie between the international organizations like the UN, WTO, etc and international sport organizations like the IOC, planetary Federations, etc.Sports goods manufacturersThere are many renowned manufacturers like Adidas, Nike, Puma, Slazenger, Yonex etc that are internationally acclaimed and are the global leaders in sports goods manufacturers. We will take a look at the top 3 manufacturers,Adidas (Herzogenaurach, Germany) is an international giant for manufacturing footwear, accessories and apparels. Adidas manufactured footwear includes football, basketball, running, golf, training, outdoor and cycling shoes for men and women. Among accessories, it manufactures footballs and shin guards, tennis wristbands and caps, workout and weekender bags. The apparels include jerseys, socks, shorts and training outfits. Its subsidiaries include Reebok, Rockport and the golf brand TaylorMade.Nike (Beaverton in Oregon) undertakes the distributing, marketing and designing of accessories, apparels and footwear on a global basis. Nike is a world leader in sports goods manufacturer with its subsidiaries like Umbro, Hurley International, Converse and Cole Hann designer.Puma (Herzogenaurach, Germany) Puma is into cricket equipment manufacturing since an early make up and the big boys of Adidas and Nike have recently joined the band wagon. Puma also designs, distributes and makes sports equipment, apparels and accessories.International PoliciesEvery country does its bit to ensure that the imports are low and the local manufacturers have a fair share of the markets in its domestic markets. We have given the policies of a few countries to help in this endeavour. brazil-nut tree The anti chuck out law is a major roadblock to exploring the threatening businesses forecasted due to the 2014 World Cup and the 2016 Olympics. According to this every product manufactured in China will have to pay an anti dumping charge to the Brazilian Government and this increases the price of product to be sold in Brazil. Thus local Brazilian manufactured products stand to gain from this and the international community is trying hard to revoke this anti-dumping policy.Indonesia To reduce the imports, every consignment of imports that enter Indonesia is subject to a stringent inspection and the equal of this is a burden to the importer. Thus the importation time increases and this encourages local manufacturers.USA The Obama Government has implemented a Section 421 that imposes certain tariffs on tires trade from China and this is expected to hold fort against the textile and apparels also from China. Since US imports 97% of its apparels, this import tariffs on China has been done to try shifting the manufacturing industry from Chi na to Central America.China Many countries take a safeguard against goods manufactured and imported from China by implementing various anti-dumping laws and thus protect their trade interests with China.South Africa Increase in the import tariff which was already high at 40% to 45% further increases the price of imported goods in the country but this has not seen any black change in the increase in the profits of the local manufacturers. With the sporting events like the Football World Cup and the Cricket Champions League T20 these import tariffs have not been a deterrent and the local sales give notice downwards further.Environmental factors to be consideredRecycled materials in development of sports goods This can be achieved by using recycled materials in part with other materials.Environmental conservation in development of sports goods Products that should not harm the environment have a long shelf life and are easily disposable.Energy conservation in development of sports goods Provides the body with the right amount of heat and dusty to maintain the body temperature.Ecological friendly methods in development of sports goods Products that do not degrade the environment during its manufacturing process and toxic substances should be emitted away from human inhabitation.Reuse methodology in development of sports goods Products that are retooled and can be reused or may be can be born-again into a different product.Challenges approach by the Sports Goods IndustrySome of the challenges faced by the Sports Goods Industry are as underMost of the industry is in tiny sector and the Production volumes are low broken mechanization in the MSME(Micro, Small and Medium Enterprises) industry. The thrust is mainly on manual labour.There is a dearth of research and development facilities escape of synergy and coordination amongst various manufacturers critical for Component ApproachHigher production cost due to low scale of productionComparatively high interest rates for loansInsensitivity to customer needs/ poor convey of customer feedback and customer complaint redressal system.Minimal expenditure on brand building, advertisingLack of professional managementLack of opportunities for sports goods manufacturersLack of tax in recognize exemption, government support, inefficient transportation and distribution system has resulted in acquittance of customer and opening of many new exporting countries like China and South Korea.Many of the importing countries are preferring Bio-Degradable goods and failure of Indian industries to come into this term has resulted in further loss of global market share.Sports equipment does not include Gyms health equipment, which are now very popular.The power translate to most of the industrial units in major clusters of sports goods (Jalandhar, Meerut and Srinagar) is very erratic digest and RecommendationsThe sports goods industry is a sector with vast potential to grow in the near future. The resilience of this industry was displayed for the world to see when it remained largely immune by the global economic recession in 2008. But an important obstacle to the growth of the Indian sports goods industry into an internationally competitive sector is its relatively small scale of operations (it is mainly confined to Jalandhar, Meerut, Srinagar and Delhi), as a result of which it is not able to cater to bulk demand.Some recommendations to turn India into a world-class sports goods manufacturing hub areSetting up of sports manufacturing labyrinthianSports manufacturing clusters should be set up in Punjab, U.P and Jammu Kashmir, where majority of sports goods are manufactured, with facilities like an information centre where all the latest information on raw materials, technology, specifications etc. is available skill development centre for training workforce for various products being manufactured, etc.InfrastructureInfrastructure at ports should be upgraded to meet international s tandards with quick off-loading and on-loading facilities. Also, the power supply at most of the industrial clusters is very erratic, with some units getting power only 3-4 days a week. To solve this problem, industrial units should be given power supply for at least 12 hours a day.New product developmentAccording to studies conducted by leading agencies, only 20-25 product groups are manufactured in India whereas over 100 product groups have been identified as sports equipment internationally. There is an urgent need for product diversification which can be met by establishing an R D centre to conduct research on new products.Raw materialsThe sports goods industry faces many hurdles in obtaining some(prenominal) essential raw materials for manufacture of sports goods. For example, willow, which is used to manufacture cricket bats, is a type of wood which is available only in Jammu Kashmir. However, the government has out(p) the movement of willow outside the state. Similar is t he case with cane, which is available only in the Andaman Nicobar Islands and the north-east. Such bans on the movements of essential raw materials should be removed. monetary measuresSpecial incentives, for example, a tax holiday of 5 years, could be given to industries in this sector which adopt automated and modern methods for manufacturing.Marketing and product promotionDomesticIt is important to extrapolate Brand India domestically. International events which are held in India could be compulsorily required to use sports goods manufactured in India, which pass international specifications and standards. In fact, the Commonwealth Games, to be held in India in October, would be an ideal opportunity to enhance the image of Indian sports equipment and popularize Brand India. Another method could be to encourage the national sports channel, DD Sports, to air advertisements of national sports brands at concessional rates. Currently, most local brands cannot afford to promote their b rands on TV.InternationalParticipation of small and medium Indian manufacturers at international sports fairs and exhibitions should be encouraged, with the Government subsidizing the cost of participation. Brand India should be promoted at these international fairs with publicity support from the Government. Also, the cost of obtaining international certification, which is necessary for Indian goods to be used in international tournaments, should also be borne by the Government. careen manufacturing techniquesA separate study on the sports goods sector should be fit out by the government for studying the present production processes and suggest changes to improve productivity and minimize wastages and make the sector more cost-effective.The total world trade in sports equipment, sports apparels, sports shoes, etc. is estimated to be around $80 billion. Of this, 70% is accounted for sports apparels and sports shoes, 5% for sports accessories and remaining 25% for sports equipments. This classification does not include gym equipment, which is now becoming very popular. In India, sports equipments alone are considered as sports goods and sports shoes and sports apparels are not considered as sports goods at all. All 4 categories of sports goods should be brought together on a common platform to go for Indias capabilities in holistic manner.