Sporting Goods Industry Targets $1.8T Inactive Market

The global sporting goods industry is navigating a complex landscape marked by economic headwinds, shifting consumer behaviors, and geopolitical uncertainties, according to McKinsey & Company’s latest report, Sporting Goods 2025—The new balancing act: Turning uncertainty into opportunity. Despite softer growth projections, the sector has demonstrated resilience, sustaining a 7% annual growth rate from 2021 to 2024, though this is expected to moderate to 6% through 2029 amid regional slowdowns in Asia–Pacific, Western Europe, and Latin America.

The report highlights a dual focus for companies: pursuing revenue growth while optimizing operational efficiency. 44% of industry executives express cautious optimism about 2025, prioritizing strategies to mitigate inflation’s impact and diversify supply chains. Geopolitical tensions remain a concern, with 84% of executives citing potential disruptions from tariffs and supply chain vulnerabilities. To adapt, brands are accelerating automation, digitalization, and regionalizing production hubs.

While environmental, social, and governance (ESG) goals remain on corporate agendas, their priority has slipped. Only 50% of executives now rank sustainability as a key focus—down from two-thirds in 2024—as companies grapple with cost pressures and shifting consumer spending.

Physical Inactivity: A $1.8 Trillion Opportunity

A pressing challenge is the rise in global physical inactivity, which climbed from 26% in 2010 to 31% in 2022, with the World Health Organization projecting 35% by 2030. This trend poses an existential risk but also represents the industry’s largest untapped market: 1.8 billion inactive adults globally.

Innovative responses include:

• Adidas’ Stay in Play line: Moisture-wicking, affordable apparel targeting casual exercisers.
• Nike’s modest wear collection: Culturally inclusive activewear to reduce barriers for diverse demographics.
• ASICS’ “The Desk Break” campaign: Micro-workout initiatives promoting office-friendly movement.
• Shimano’s youth cycling programs: Partnering with schools to foster early engagement with sports.

In the past five years, brands like like On Running, Lululemon, and Hoka have significantly chipped away at the market dominance of Nike and Adidas, which together have lost about 3 percentage points of market share since 2019. These emerging brands have thrived by focusing on niche segments like running, yoga, and outdoor fitness, delivering visible and innovative product designs that stand out—Hoka’s oversized midsoles and On’s distinctive CloudTec® soles being prime examples. They also leverage cultural marketing strategies that resonate authentically with identity-driven consumers, exemplified by Vuori’s community-focused campaigns and grassroots engagement. Additionally, these challengers adopt hybrid retail models that combine direct-to-consumer approaches with selective wholesale partnerships, enabling both personalized customer experiences and broader market reach.

Post-pandemic consumer behavior shows a strong preference for in-person fitness connections, with 81% attending live classes in 2024 and the global live events market expanding rapidly, projected to grow from $100 billion in 2023 to $150 billion by 2030. Leading brands like Peloton and Nike are innovating by blending digital and physical experiences—Peloton’s “Live Studio” classes feature real-time leaderboards to boost engagement, while Nike’s NYC House of Innovation hosts hybrid run clubs complemented by social lounges, effectively bridging the gap between online convenience and community-driven in-person interaction. To truly thrive, McKinsey urges companies to:

1. Leverage data-driven personalization: AI tools to tailor products to micro-segments.
2. Invest in supply chain resilience: Nearshoring and inventory optimization.
3. Blend entertainment and sport: Partnerships with music festivals (e.g., Adidas x Coachella running tours).

“The industry’s future hinges on balancing tradition with transformation,” notes co-author Alexander Thiel. “Brands that innovate authentically—whether through sustainability, tech, or community—will define the next era.” As the sector adapts to 2025’s uncertainties sporting goods remain both a cultural touchstone and a catalyst for change.