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Draft Working Paper
Sports Retailing in India: Opportunities, Constraints and Way Forward
Arpita Mukherjee Ramneet Goswami Tanu M Goyal Divya Satija Amrita Gupta
INDIAN COUNCIL FOR RESEARCH ON INTERNATIONAL ECONOMIC RELATIONS
Acknowledgement We are grateful to Rajiv Kumar, Director and CE (ICRIER) for giving us the opportunity to work on this sector and for his constant support and encouragement. The original study on the business of sports in India was sponsored by the Italian Trade Commission and we would especially like to thank Erica di Giovancarlo and Alessandra Marcarino for their continuous guidance and support. We are indebted to many people in the retail and sports sector for their valuable inputs. Discussions with various ministries/departments such as Department of Sports, Ministry of Consumer Affairs, Ministry of Textile and Department of Industrial Policy & Promotion improved our understanding on policy issues. Meetings with autonomous bodies and sport federations such as Sports Authority of India (SAI) and Common Wealth Games Organising Committee in India and All India Tennis Federation among others enriched our understanding about the sector and government’s position thereof. Interactions with export and manufacturing councils such as Sports Goods Export Promotion Council (SGEPC), Apparel Export Promotion Council (AEPC), Council for Leather Exports (CLE) and associations like Importers Association of India and ASSOSPORT (Italy) provided valuable inputs. Interviews with companies like Reebok India Company, Puma Sports India Pvt. Ltd, Nike India Pvt. Ltd, Sports Lifestyle Pvt. Ltd, Shiv Naresh Sports Pvt. Ltd., Lotto Sports Italia S.p.A, BasicNet S.p.A and Arena Italia S.p.A. and Planet Sports (Future Group) among others gave us useful insights to sports goods production, distribution, sourcing, retailing, branding, promotion and sponsorship. The report is based on a nation-wide survey of 371 respondents. The authors are grateful to Prasid Chakraborty and his team (SRG Consultancy Marketing Planning Services) for carrying out this survey and the survey respondents for their time and valuable inputs. We are grateful to Shathish P. Vasudev and Shraman Banerjee for their assistance during the course of the report and Shivani Chawla for her assistance in compiling information. Last but not the least; we would like to thank ICRIER administration Rajeev Kapil, Manmeet Ahuja, Anil Kumar and the team for administrative support.
Introduction Sport – from games and physical activity to organised competitive sport – has an important role in all societies. For the individuals, it enhances fitness, improves general health and enables a person to be self-confident. At the national level, sport and physical education contribute to economic and social growth, improves public health, and bring different communities together. It is an important component of human capital development. At the global level, sports and physical education can have a longlasting positive impact on development of poor countries through various linkages like development of tourism sector. It helps to maintain international peace and promotes cordial international relations through international sporting events.1 Globally, the sports market is one of the most complex and diverse markets in which the government, federations and private sector are intertwined and all of them play an important role. In many countries the government is responsible for the development of sports infrastructure. For instance, in countries like China, Australia and India, development of sports infrastructure is one of the key responsibilities of the government. Government policies directly or indirectly impact the development of sports in any country. However, these policies vary from country to country. In countries like China and Australia sports sector got a boost due to conducive government policies. For instance in China, the government adopted "Physical Health Law of the People's Republic of China" in 1995 in which it aimed to build a sport and health-building service system for the general public. Prior to 1990’s, sports sector in China was completely government funded, however, since then, there has been corporatisation of sports. This has helped in professionalisation of sports and improving sports environment in China. In Australia, the government’s focus on sports development was propelled by Australia’s poor performance in the 1976 Montreal Olympic Games. The government adopted a policy of ‘Using sport to build healthy and active communities’ and commissioned various studies. Despite political resistance, a governing body called the Australian Institute of Sports (AIS) was established in 1981 for focused infrastructure development to facilitate development and training of Australian sportsperson. In 1989 for a holistic development the government decided to form the Australian Sports Commission (ASC) and merge the AIS with it. The ASC is one of the most active global institutions in promoting sports at the grass-root level, training and development of sportsperson, among others.
1 There is significant amount of literature on sports and its linkages with tourism, peace, etc. For instance, for the role of sports in peace in development see, Schwery R. (2003), for role of sports in tourism see, Ritchie W Brent and Daryl Adair (2004). Also see UNOSDP (2007).
among others to popularise and market their products. Federations of different countries work closely with their respective international federations. These federations work closely with the government for the development of infrastructure. contribute to development of sports infrastructure. German company Puma AG Rudolf Dassler Sport (brand Puma) has positioned itself as a sports and lifestyle company that specialises in footwear. All countries do not focus on all types of sports and in each country certain sports have a dominant position. etc. They own sports clubs. training. With privatisation and commercialisation of sports. Sports retailers. cricket is the most popular sport.Sports in most countries have an association or a federation which is also responsible for the development and promotion of that particular sport. unlike other forms of retailing. Sports brands decide how they would like to position themselves globally and in a specific market. needs to re-orient its products and strategies to suit target market requirements. have to work closely with government and federation for equipment/goods procurement. federations (domestic and international). therefore. At the global level. A company exploring global markets. They also need to customise their products according to consumer preferences. apart from targeting the consumers. it is soccer. For instance. Hence. associations. in Germany. and in Italy. facility management and participation of sportsperson in international events. it is football and water polo. in which the retailers directly target the consumers. there are international federations for different sports which not only set the standards and rules of the game but also have specific criteria for recognising sports equipment. These sports have huge fan followings and this drives the market for sports products and accessories. sports clubs. brands and manufacturers. etc. sports retailers generally work with government. For example. and play a crucial role in selection of sports brands. Overall. They liaise with international federations to get their products/brands recognised and for global reach. in Canada. They are also responsible for equipment procurement. etc. in the United States (US) it is American football. they coordinate with national federations (who follow international norms) to get their products/brands approved. administration. event sponsorship. fan clubs. They also work closely with individual sports person and private sports clubs. academies. the private sector is playing a key role in promotion. The consumer base of sports retailers is also different – they are generally the younger population in any country. apparel and equipment for a number of sports including 4 . love of sports. sports retailers may have to work with consumers through schools. teams. Within a country. Some companies have positioned themselves as both sports and lifestyle companies in order to cater to a larger consumer base. basketball and baseball. tournaments. Major sporting events.. teams.. it is ice hockey. training and marketing of sports. and popularity of a particular sport in a country are the key drivers of this business across the globe. etc. The retailing of sports products is closely related to the status and promotion of sports in a particular country. therefore. in India. colleges.
benefit the economy as a whole. Inspite of these complexities this is one of the fastest growing segment of retailing and many global brands and Indian corporates have entered into this segment. sailing and motor sports. status of selected sports in India among others. government structure and policy. India is hosting a large number of international events. enhance productivity and efficiency and. In the recent years. Section 1 provides a global overview of the sports sector. grass. The structure of the paper is as follows. which is different from their global strategy. gloves. sports sponsors. companies like Nordica (Italy) have specialised in footwear. Section 2 presents an overview of the sports sector in India focusing on recent trends and developments. Most research in this segment is based on tracking consumer profiles and discussions with industry experts. clubs. and provides an analysis of the consumer profile. 5 . Section 6 discusses what the retailers should do to improve productivity. Many foreign brands like Reebok and Nike are sponsoring cricket and retailing cricket equipment. recreation and fitness activities is also unclear. The Indian government has expressed willingness to allow FDI (foreign direct investment) in multi-brand retailing in selected sectors including sports. sports retailing is a niche segment of retailing in India. football. sports products etc. the available statistics are outdated. It also requires coordination at the grass-root level like working with schools for sports equipment and shoes. Retailing in this segment is complex since it requires coordination with Indian government. Unlike sectors like food and grocery this is a less sensitive sector for allowing FDI. etc. 1. or beach).athletics. volleyball can be played on court. The number of sports is large and each can be played in different formats (for instance. On the other hand. Global Overview of Sports Sector Globally. role of federations. Hence. its contribution to GDP (gross domestic product) and employment.) for one sport – skiing. apart from understanding the consumers’ profile. Section 4 discusses the barriers faced by retailers and Section 5 suggests policy reforms which will enable the sector to grow. In the above context. The distinction between sports. This section also highlights India’s international policies relating to sports and sports product retailing. This is because sports can be defined differently in different countries. there are very few official studies on the sports sector and it is difficult to estimate the size of the industry. it is difficult to track developments in the sports sector. Section 7 draws the main conclusions. global competitive and promote sports retailing. etc. this paper examines the potential for sports retailing in India. Like in the international market. equipment and accessories (jackets. Section 3 focuses on sports product retailing in India. clothing and accessories in countries like India. in turn. federations. It provides and in-depth analysis of the type of sports retailers. golf. Moreover. their sourcing and distribution channels. including their choice of retailers. highlighting the recent trends and development.
For instance.3 In developing countries such as China and in developed countries such as Canada it accounted for only 1 per cent of the GDP in 2000.uk/regions/yorkshirehumber/sportfitness. Many developing countries are trying to promote their tourism sector through sports. In the UK (United Kingdom) it was only 2 per cent which shows the variations within the EU member states.plunkettresearch.com/Industries/Sports/SportsTrends/tabid/274/Default. with digitalisation and developments in audiovisual media. in the EU in 2005. power. about 15 million people were employed in the sports industry.html?cid=6a00d8341c034a53ef012875ddb040970c 3 ‘The Development of Asian Sport Industry’.com/2008/03/towards-aeurop. The development of sports also leads to infrastructure development. It is closely related to recreational and leisure activities and other service sectors such as tourism. Sports retailing has boosted the manufacturing industry in Transparency International (2009) and http://www.7 In 2005. the sports industry employed 2 per cent of the UK workforce (around 576. the sector has strong inter-linkages with other sectors and has multiplier effects of development of these sectors and the economy as a whole. the prime focus of the government is on infrastructure development including transportation. The linkages between sports and tourism industry are well known. Kel Sanderson and Mark Goodchild (2002) 5 Transparency International (2009) 6 http://www.keablog. Ganesh. the bulk of the employment in this sector is seasonal. gambling and recreation sectors and about 50.600 in retail stores of sporting goods. in Japan.000 people). etc. the contribution was around 3. National Taiwan Normal University.7 per cent of GDP of the EU (European Union). Taipei. it contributed around 3.8 However. Taiwan. Malaysia is developing as a golfing destination.9 per cent of total employment) in 2000. the sports industry contributed about 3. in 2008 approximately 1.5 million people were employed directly in amusement.4 This sector is labour-intensive and contributes significantly to employment – both direct and indirect.3 per cent in 2000.co. and 244.35 per cent. For instance.200 were working in wholesale trade of sporting goods. Although the size of the sports industry per se or its contribution to GDP may not be large. representing over five per cent of the EU labour market. audiovisual and advertising. Countries like Switzerland are important skiing destination and this has promoted their tourism industry. part-time or voluntary. In 2005. 4 Nana.In most countries the contribution of the sports sector to the GDP is small and usually less than five per cent of the GDP. sports-related activities directly employed approximately 61.aspx 7 Nana.ashx 6 2 . a major portion of the revenue of the audiovisual sector comes from the sports sector.6 In Hong Kong.300 persons (1. In many countries there are dedicated sports channels and sports magazines which have increased the market for sports broadcasting as well as television advertisements and promotions by sportsperson.2 In the US. Philip Cheng. Since Delhi is hosting the Commonwealth Games in 2010. Ganesh. Kel Sanderson and Mark Goodchild (2002) 8 http://www. For instance. Dr.sportactivensa.89 per cent and in Korea it was 2.5 In the US.
Bicycles & Total Sports market Sports Sports related sports without bicycles footwear apparel related equipment accessories World 4 4 5 4 2 6 Americas 4 4 3 4 3 4 Europe 2 1 4 1 0 7 Middle East 14 14 15 15 12 12 and Africa Asia 6 6 8 7 3 6 Source: SGEPC (2008). where they showcase football matches. and footwear sales was $284 billion in 2008. Reebok’s “Reebok Rolland Berry” shoes are designed by the well-known designer Rolland Berry (US). Sports industry is also linked to other industries like food and beverages industry. the fastest growing markets are South and Central Asia. For instance. apparel.npd.com/press/releases/press_090701. For instance. The global demand for sports goods is driven by sports apparel which constitutes around 50 per cent of the total demand.1: Growth Rate of Global Sports Industry in 2007 (in per cent) Sports."Adidas by Stella McCartney". Treviso. According to the Sports Goods Export Promotion Council (SGEPC). However. serve different foods and beverages and along with retailing of Manchester United merchandise. Most studies have shown that the industry was growing at the rate of 4 per cent before the recent global slowdown. The sports industry is also closely linked to the fashion industry. footwear and accessories) and accounts for around one-third of the global market. The US is the largest market for sports products (equipment. Although Asian countries like China and India have a large population base. The per capita consumption of sports goods in developing countries is low for three reasons: 9 http://www. the size of the global sports market increased from $267 billion in 2006 to $278. English fashion designer Stella McCartney has launched a jointventure line with Adidas . in Italy.countries like India and China which are global manufacturing hubs for sports products.1).1).4 billion in 2007 growing at the rate of 4 per cent (Table 1. the Middle East and Central and Eastern Europe (Table 1. the famous football club Manchester United has tied up with restaurant chains and has opened restaurants and cafés.html 7 . the sports market in Asia is currently less than 25 per cent. which is a sports performance collection for women. India. According to another study.9 worldwide sales of sports equipment. apparel. Table 1. is also a sports product manufacturing hub.
This has generated demand for sports apparel and shoes. developing countries like India and China experienced a positive growth rate due to the positive and high growth of GDP. 8 . Japan. such as infrastructure. the market for fitness-related sports. is increasing.10 Developing countries like India and China have now become important production hubs for companies from developed countries. Table 1. water and sanitation. the per capita purchasing power is lower than that in developed countries. France.2: Growth Rate of Global Sports Industry in 2008 Total sports 0 -1 -1 Sports footwear 0 -3 0 Sports apparel -1 0 -4 Sports equipment 0 -3 1 (in per cent) Bicycles & related accessories 4 2 2 7 6 World Americas Europe Middle East 7 8 6 6 and Africa Asia 4 4 1 4 Source: http://www. the growing middle class and the young population. Moreover. while the developing country markets are small but growing. the developed country markets are large but they are getting saturated. and the major importers are the US. third.first. Germany. The growing markets of India and China have attracted sports retailers from developed countries who are not only 10 Andreff and Andreff (2007). Italy. Italy. healthcare and education rather than development of sports. Canada and Hong Kong. sports is treated as a luxury commodity. The world’s major exporters of sports goods are China. As shown in Table 1. France. these two countries are organising major sporting events since 2008 (the Beijing Olympics. the Commonwealth Games. Moreover. Germany and the US. the government’s priority is to provide basic necessities. 2010. Hong Kong. the sports industry has also been affected by the global slowdown. In spite of the slowdown and lower demand from developed country markets. 2008 in China. such as running. 2010.html Overall. second. Men’s Hockey World Cup. swimming and cycling.npd. the unsaturated domestic market. developed countries like the US and the European countries have experienced a negative growth rate. and the Commonwealth Youth Games. 2008 in India) which has increased the government and private sector focus on this sector. With growing health and fitness awareness in developing countries.com/press/releases/press_090701. The increase in domestic demand is also due to increase in per capita income which increased the purchasing power. many foreign brands have entered the developing country markets since 1990s and brand awareness has increased.2. walking. Like all other industries. the UK. and.
Retailers and department stores are going for private labels11 (which are cheaper than other branded products). The focus of the industry has been on exports. Sports retailing in India has to be studied against this backdrop. etc. Post its accession to the WTO. However. while other companies are looking at expanding their presence in developing countries like India to mitigate risk. higher disposable income. There are no clear estimates on the size of the sports sector alone. In India. technological developments. Mathew and Nirupama Soundararajan (2009) 9 . training and infrastructure. the global situation has changed after the slowdown and the sports industry is undergoing several changes. It is predicted that recreation consumption in India. expenditure on recreational and leisure activities also increases. China also relaxed the FDI policy. and exports of sports goods are now the focus areas of the Indian government. However. In the recent years. The country is hosting a series of international sporting events which is likely to boost the industry and increase sports awareness. due to pressure from foreign retailers in sectors like sports retailing in 2006 the Indian government had announced partial FDI (foreign direct investment) liberalisation. 2. Overview of the Sports Sector in India At present.7 per cent of the total retail market in 2006-07 while in the organised retail market its share is around 10 per cent. a young and educated population. through various platforms (mobiles. awareness and exposure to international markets. India has developed as a sports good sourcing hub and the sports goods industry has been growing at an average annual rate of around 10-12 per cent in the past five years. Also.). the size of the sports retail market in India is small. The sector is witnessing consolidations through mergers and acquisitions. Concept of branding and corporate sponsorship in countries like India is increasing and technology has made it possible to deliver sports news/events etc. urbanisation. A few years before the global slowdown there was a strong focus on India and China. sports is treated as a recreational and leisure activity. corporate entry into sports. However. television. books and entertainment sector together constituted around 2. the sports. In fact.12 Over the years. Joseph. and good performance of the country in some international events. the presence of foreign brands. the consumption of food and basic necessities is declining. Lower domestic demand and the credit crunch forced some companies to slow their expansion plans in new developing country markets. As income increases. internet. while spending on recreational activities is increasing. sports promotion. equipments. of late the sports market in India is growing rapidly with the continued growth of GDP. which 11 12 Private labels are own brands of retailers. and manufacturers and retailers are trying to target sections of society like women who have a smaller presence in sports segment.sourcing products from these countries but are also trying to enter and establish presence in the domestic market.
Thus. the popularity of hockey.26.154. golf and cricket. the Indian society is education-oriented and sports is treated as a deviation from education. which is India’s national sport. P . Although. has decreased. Exhibit A. the focus has been on education and not sports. p. but the involvement of the general public in these sports was limited.1).1: Annual Spending on Recreational Products and Services Source: Extracted from McKinsey (2007). it actively participates in international sporting events such as the Olympic Games. the status of different sports has changed. 10 . In contrast. Figure 2.includes expenditure on sports. In fact.9 per cent per annum from $1 billion in 2005 to $6 billion in 2025 (Figure 2. Cricket has become the most popular sport. Nevertheless a large number of sports are played in India and they have evolved overtime. and the performance of the Indian team and individual players in international events has helped popularise this sport. royalty and wealthy Indians played sports like polo. Commonwealth Games. Sports such as kabaddi. India is not a major sporting country and neither does it win a significant number of medals in international events. At present. in the past. kho kho. will grow at the rate of 8. Asian Games and Cricket World Cup. Note: E – Estimated. and chess are said to be originated in India. cricket is played by all sections of the society. Over time. rich and royalty got connected to sports like cricket during their education abroad and brought the game to India. gilli danda and pehlwani (an Indian form of wrestling).Projected Traditionally. For instance.
inflated balls produced in India are largely hand-stitched and therefore has better bounce compared to machine-stitched balls of China. private sector participation in sports promotion. Sports apparel was sold by apparel retailers and shoes by footwear retailers. Stag and Jaguar. Yonex. international travel and exposure through cable television. gymnasiums and fitness centres. Global brands such as Reebok. sports is still not treated as a means of livelihood. equipment and accessories under one roof. Also. Italy etc. with global integration. Adidas. For instance. Air India and Indian Airlines. many IT (information technology) and multinational companies now have in-house gymnasiums or sponsor their employees for fitness activities like gymnasiums. For a majority of the population. In the past. etc. At the household/family level the focus is still on academics.The main support for Indian sports has come from public sector organisations such as the Ministry of Railways. Although society is changing. For instance. especially after Indian industries were nationalised in the 1960s. shoes. India is among the largest sports goods manufacturers in Asia after countries like China and Japan. the Indian consumers are changing and the level of awareness is rising. it has a niche market.. sports retailing was through family-owned single shop outlets which mostly sold sports equipment and toys. Although its share in the global trade is only around one per cent. the internet. golf. It is a major producer of inflatable balls. However. are sourcing their products from India. These organisations reserved jobs for sportspersons and also provided training and other facilities. which enables it to produce sports goods of international standards at a lower cost. and yoga. the culture of the workplace is changing. Sports retailing in India is not a new concept but the retail formats have changed in the post liberalisation period. Wilson. Kobo. This gives them a niche market in Europe where handstitched balls are preferred. Entry of private sector has led to commercialisation of sports. training and infrastructure has increased. team and event sponsorship. With the increase in level of education.and high-income population about pursuing some form of fitness activities has indirectly boosted this sector. the retail industry in India underwent massive changes – from family-owned. Federations such as BCCI (Board of Control for Cricket in India) have been working closely with private sector for team ownership. Puma. it is a means of entertainment and is treated as a luxury product. After 1995. the growing awareness of the urban middle. one-shop businesses to 11 . etc. There were hardly any outlets providing – sports apparel. in the 1980s brands such as Reebok and Lotto were present in India through multi-brand retailers like Bata. Post-liberalisation. and the Indian Defence Services.. Educated Indian youth prefer a western lifestyle and are healthconscious as is evident from the growing number of health clubs. Spartan. The country has a comparative advantage in low-cost skilled manpower vis-à-vis developed countries like the US. which sold only footwear. For instance. There were only a few private sponsors like the Tata Group. India does not have strong domestic brands.
foreign brands.8 per cent per year during 2003-04 and 2007-08. multi-brand sports outlets. Soundararajan (2009). a large number of foreign brands have presence in India through exclusive outlets. ten in-depth interviews were conducted for a deeper understanding of the sector and current issues. department stores. it is important for developed country retailers to diversify to developing country markets. to manage risk and economic uncertainties. To understand the sports market in India and the sports retailing in particular. among others. At present. Indian corporates. Joseph. the economy is likely to grow at the rate of 8. there are only a few studies on the sports sector of India16. convenience stores. retailers. and studies conducted by organizations like Techopak (2009). proliferation of sports channels which has increased awareness about sports.2 per cent in 2009-10. The proliferation of brands has increased brand-consciousness and Indian consumers are now more inclined to buy branded products.13 rising per capita income. India ranked first among 30 emerging markets for foreign retailers. With the growth of modern retailing. It is also extremely difficult to get secondary data on this sector. test marketing. importers. In addition. foreign players have entered the market through different routes such as wholesale cash and carry.5 per cent in 2010-11 and reach the growth rate of 9 per cent by 2011-12 14 AT Kearney (2004 to 2009) 15 These include studies like Mukherjee.14 The 2009 AT Kearney report pointed out that since the growth in developed markets is low (due to the global slowdown). especially retailers from developed countries who are facing a saturated market at home. A. manufacturers.corporate retailing. and N. and N. et. The growing Indian retail market. wholesalers. exporters. it was ranked second after Vietnam but in 2009 it again regained the first position in the AT Kearney Retail Development Index. Moreover. The survey was 13 The average GDP growth rate was 8. large consumer base among others has also attracted foreign retailers to India. Images (2009). industry associations. consistently high GDP. M. 12 . from Fry A. al (2008). they do not specifically look at sports retailing. export and import associations and federations and the government (centre. foreign brands have entered the Indian market. increase in the number of brands available. Although FDI is not allowed in multi-brand retailing. a primary survey was conducted by ICRIER (Indian Council for Research on International Economic Relation). local manufacturing. In 2008. In the past ten years sports retailing has seen a growth in India due to the change in consumers’ preferences (who have become more health conscious). Patel (2005). AT Kearney etc. 16 For instance. single-brand retailing and franchising. However. among others. a large number of international events being hosted in India. As per the Economic Survey of India (2009-2010) GDP Growth was 7. For three consecutive years. It covered consumers. (2005 to 2007). industry experts. state and local). distributors. There are a number of studies on the retail sector in India15. Indian corporate such as Future Group and Reliance Retail Limited (RRL) has entered into sports retailing and some family owned business have grown from one shop to multiple outlets.
federations. Separate questionnaires were designed for consumers. Specifically. etc.2: Sampling Frame Type Consumer Large Retailers Small Retailers Manufacturers Distributors/Wholesalers Importers Government (different ministries. Meerut and Surat. Pune. the next two sub-sections (i. manufacturers. sports clubs. Table 2. etc. Section 2. export.2. Bangalore. sportspersons. Agra. large/corporate retailers. it looks at the sports policy and policy relating to manufacturing and retailing. Bhubaneswar. colleges.3 discusses how sports retailers/brands can work with government and/or federations and Section 2. Mumbai. Some linkages between domestic policy and international negotiations are highlighted in Section 2. import) Logistics and other supply chain companies In-depth interviews (including case studies of selected companies. customs and state governments) Federations Associations (industry. the responsibility for the development of sports primarily lies 13 . sector experts.2) discuss the governance structure and policies that regulate and its implications for sport retailing in India. and academies among others account for a significant part of sports product market. etc. government.) Total Number 200 25 33 35 22 5 9 8 20 4 10 371 Since sports retailing involves working with government. Information was collected through repeated on-site visits and each interview lasted for around an hour.4 discusses how they work with school. federation. to get different perspectives on the sector.2. corporate sponsors. etc. Thus. Government procurement and procurement by federations.. manufacturing.1 and Section 2. Chennai. importers. clubs.1. 2. Kolkata.1 Governance Structure 2. clubs. The sampling framework is given in Table 2. “sports” is in the State list along with entertainment and amusement. etc. and is depended on government policies not only in the retail sector but also in allied sectors like sports sector.e. Hyderabad.based on semi-structured questionnaires and was conducted in 11 cities namely Delhi.1 Sports Under the Constitution of India. wholesale/distributors/exporters. Section 2.
the SAI (Sports Authority of India) conducts various activities including training.17 It covers almost all major sports except cricket.1. It is divided into national sports federations (that have voting rights in the IOA) and recognised sports federations (no voting rights in the IOA). in turn. it is treated as a leisure/voluntary activity and a serious focus on this sector is lacking.1. Figure 2. the Ministry of Youth Affairs and Sports is the apex body which designs sports policies. managing players. etc. In addition.1. Generally. The structure of this ministry is given in Figure 2. there are autonomous institutions such as the IOA (Indian Olympic Association) and the BCCI (Board of Control for Cricket in India) under the Ministry of Youth Affairs and Sports.ind. They work directly with their international federations/organisations and run parallel to the other departments under this ministry.1.1. and is the governing body for 64 federations. IOA is affiliated to the IOC (International Olympic Committee). All these federations are. affiliated to their respective international sports federations (see Figure 2. At the centre. the relatively active federations come under the national sports federations. It is solely responsible for procuring sports goods from local manufacturers across India.1: Structure of the Ministry of Youth Affairs and Sports Source: Compiled by the authors. However. see www. The state-level 17 For the complete list of federations. organising tournaments.1. The state-level focus on sports has the advantage that it allows the development of sports at the grass-root level. Under this ministry. The role of the central government is limited to planning and providing infrastructure.1. Each state/region has its specialisation and this heterogeneity can be maintained only by targeting sports at the state-level.olympic.in 14 .with each state government. by clubbing sports with entertainment and amusement. whereas the dormant ones are under the recognised sports federations.2).
15 18 . and in involving corporate.1.2: Structure of Sports Federations in India Source: Compiled by the authors. creation of infrastructure. The BCCI was established in 1928 as the single national governing body for cricket in India and is affiliated to the International Cricket Council (ICC). BCCI Corporate Trophy (September 2009). Among other central government bodies. It has played a major role in popularising the game not only in India but also globally. 19 In this event.19 and. It is responsible for organising cricket tournaments and series. the entertainment industry and multinationals in this game. which co-ordinate state-level activities such as state-level tournaments and team selections. the IPL (Indian Premier League) which was launched in 2008. large business houses. the role of the central government is confined to development of policies. Apart from the usual formats (test matches and one-day matches). The BCCI18 is the most active Indian federation and the richest cricket board in the world. It has 27 state associations across five zones under its umbrella.federations responsible for organising state-level events and activities are the members of the national federations.1. both at the national and international levels. Overall. It is one of the most successful federations in roping in manufacturers and retailers of sports goods into the game of cricket. the Planning Commission plays an important role in central budget allocations to different states for sporting activities. it has come up with innovative formats such as the T-20 (twenty-over game). Figure 2. Indian corporates (public sector undertakings and the private sector) have their respective teams. training. direct funding for team participation in international events and capacity-building at the grass-root level. most importantly.
There is no nodal ministry to regulate retail trade at the centre unlike other sectors like agriculture which are also subject of state legislation. 2. apparel. there is no single ministry governing sports goods sector. Food and Public Distribution regulate internal trade while FDI and external/international trade is under the purview of the DIPP (Department of Industrial Promotion and Policy) under the Ministry of Commerce and Industry. the sector does not receive a holistic attention. the Ministry of Consumer Affairs. on the other hand. create demand for sports products. in turn. In 1954. 2. Retail. inter-state movement of sports goods. 2. Globally. etc. Ministry of Commerce and Industry. the Indian government took the first step to promote sports by creating the AICS (All India Council of Sports). in manufacturing and in retailing directly impacts retailing of sports products. Due to multiplicity of ministries. Sports equipment falls under the aegis of the Ministry of Commerce and Industry while sports apparel is under the Ministry of Textile along with textile. For instance. Different segments of the retail business are regulated by different ministries. SGEPC (Sports Goods Export Promotion Council) under the administrative control of the Department of Commerce.2 Government Policies and Schemes As mentioned earlier. However sports policy started receiving serious attention during the 1982 Asian Games in New Delhi. the state governments regulate the establishment of retail outlets. home furnishing. activities. Ministry of Commerce and Industry is responsible for promoting exports of sports goods and equipments while sports apparel exports is promoted by AEPC (Apparel Export Promotion Council) under the Ministry of Textile and CLE (Council for Leather Exports) under the purview of Department of Commerce. Taxation issues come under the Ministry of Finance. For example. the sports sector is either under the same association or associations governing this sector work in close coordination with each other. These are discussed below. the Department of Sports was created under the Ministry of Youth Affairs and 16 . shop timings. events.1 Sports Policies Government policies can help to promote sports and. Since retail is a State subject. state governments are the main regulatory authority. etc.At the state-level. Zoning regulations and trade licences are under the aegis of municipal/local bodies. is a State subject according to the Indian Constitution and. government policies in the sports sector.2. there are various state-level ministries.1. therefore. among others. In the same year. which govern various statelevel tournaments.2 Manufacturing and Retailing At the manufacturing and retailing end.
thereby promoting sports at grass-root level and facilitating human resource and infrastructure development. The policy also emphasised the need for harmonious and co-ordinated action between the government and other agencies. Although the linkage between sport and tourism has long been recognised in other countries. the Ministry of Human Resource Development introduced the CCE (Continuous and Comprehensive Evaluation) system for secondary education to be executed by the CBSE (Central Board of Secondary Education) with the aim of holistic development of school children. In 1984. This will enable a strong linkage between education and sports. the policy recommended including sports in ‘concurrent list’ instead of ‘state list’.20 The National Sports Policy. Development of sports in rural areas received priority. a new grading system has been introduced in which school children in 10th standard have to participate in one or more sports activities at school-level. Recently. the National Sports Talent Contest Scheme launched in 1985 to give scientific training to talented young children in the age group of 14-18 years.Sports. the National Sports Policy was announced to develop a conducive policy framework for sports in the country. the government has been introducing schemes to promote sports and games in school and colleges. The government introduced the PYKKA (Panchayat Yuva Krida Aur Khel Abhiyan) during the Eleventh Five Year Plan (2007-2012) under which a grant of Rs. To achieve this objective. the SAI was set up to oversee all matters related to sports promotion and management. The responsibility of the same was entrusted to the state governments with some financial support from the central government. In addition. The core focus of the Comprehensive Sports Policy (2007) remained the same. 17 . This necessitated a new policy. develop infrastructure in rural schools. and in 2001 a National Sports Policy came up. Some such schemes include. there was no visible improvement in the sports infrastructure and the rate of participation remained low (especially at the grass-root level). Few sports have also been listed down for the schools to develop concomitant infrastructure to facilitate the execution of this scheme. 40 million ($1 million approximately) was allocated to the Ministry of Youth and Sports Affairs for the promotion of sports and games in schools. the policy made a link for the first time in India. In CCE. The policy emphasised on the development of sports infrastructure and making sports and physical education an integral part of students’ curriculum. From time to time. train people and mobilise resources. by the year 2000. 20 This is still a draft. Along with their academic performance they will be evaluated on their performance/participation in sporting activities/events. which was followed by a Comprehensive Sports Policy in 2007. 2001 emphasised the need to broad-base sports and achieve excellence in sports at national and international levels. colleges and universities in the year 2010-11. However.
private schools. The focus of the government policy has largely been on building infrastructure. sports infrastructure in India is poor and is not uniformly spread across the country. The survey found that although there is awareness at the government level. 2. there impacts have not been significant. or 480 million citizens. Also.23 Lack of access to facilities has restricted the development of sports which in turn limits the ability to retail sports products. and the Ministry of Finance & Company Affairs. 22 Draft Comprehensive Sports Policy-2007. have taken initiatives to develop infrastructure. gambling and betting.At present. 100 per cent FDI is allowed in sporting activities through automatic route. In spite of the focus on infrastructure. 18 . although many states have given priority to sports. government funding has been sporadic and is not uniform across different sports. 21 Based on data from the Ministry of Youth Affairs & Sports. the infrastructure for some sports like tennis and swimming is growing.22 Only 30 million of the 210 million school and college students in India have access to facilities for physical education.. private organisations. 100 per cent FDI is allowed in manufacturing of sports products. At the state government level. With the development of modern residential complexes.2 Policies Relating to Manufacturing and Retailing: One of the core objectives of the government is to promote manufacturing and exports of labour-intensive products like sports products. This is lower than in countries such as China where 37 per cent of its population.2. actual investment in this sector is negligible. although the Indian government has various policies and schemes in the sports sector. sports and games. FDI is prohibited in lottery. The budget outlay for sports is less than 1 per cent of the total national budget21 compared to about 13 per cent for a small country like Cuba. actively participate in education and sports activities. In future private sector participation in infrastructure is likely to increase. clubs. apparel and footwear. The seventh All-India Educational Survey estimated that less than half of Indian schools have sports facilities. This is because India is a large country with one sixth of world’s population and government spending in this sector is very small. only about 50 million have access to organised games and sports facilities. The government wants to develop India as a sourcing hub for sports goods. Overall. etc. Only large cities have adequate sports infrastructure. Unlike countries like Australia. According to government’s own estimates out of the 770 million below the age of 35. For this. Shortage of infrastructure has also led to higher prices of the facilities making them non-accessible to majority of the population. limited measures have been taken to actually invest in infrastructure. 23 Draft Comprehensive Sports Policy-2007. little attention is given to development of sports talents. Some corporate.
The focus of the government’s policy in manufacturing is on exports and not on the domestic market. concessional duty benefits under the EPCG scheme have been extended to the import of capital goods required by retailers that have a minimum area of 1. For instance. the Foreign Trade Policy emphasised on the promotion of Indian brands in international markets. Applications relating to sports goods and toys are given fast-track clearance by the DGFT (Directorate General of Foreign Trade). Due to this. The sports goods and toys sector has a special focus in the Foreign Trade Policy (2009-14) and is treated as a priority sector under the Marketing Development Assistance and the Market Access Initiative schemes. simplification of the procedures for imports/exports.. the EPCG (Export Promotion Capital Goods) scheme offers zero duty for capital goods imports. while the global market was affected by the recent recession. improvements in infrastructure related to exports. There are duty exemptions on the import of footwear machinery. 100 per cent FDI is allowed in cash and carry wholesale trading through automatic route and export trading. metres. Although these policies have helped the Indian manufacturers in exporting and accessing the global market. When the Indian exporters were hit by the global slowdown. Retail is one of the few sectors in which FDI is not allowed in multi-brand retailing. the Indian domestic market is growing24 and hence opportunities for retailers and manufacturers in the domestic market are growing. Different state governments also provide incentives to promote manufacturing and assist the sports industry in their state. and concessions have been given to the import of sports vehicles. For technological upgradation in the apparel sector.2 per cent in 2009-10. they have certain draw backs. government announced stimulus packages to revive the sector. 19 . The allocations for these schemes have been increased. To promote modern retail infrastructure. and reduction in transaction costs. although Indian manufacturers cater to a large number of global brands.000 sq. such as golf carts for hotels. GDP growth was 7. At present.e. retailing of goods of multi-brand even if produced by the same manufacturer 24 India has one of the fastest GDP growth rate. The focus is on accessing global retailers as contract manufacturers rather than strong “India brand” building. Apart from these. the economy is likely to grow at the rate of 8. According to Economic Survey of India (2009-10).5 per cent in 2010-11 and reach the growth rate of 9 per cent by 2011-12. Since 2006. in particular. Moreover. Indian brands have not made inroads into global markets. The government has created special economic zones where manufacturers get various tax exemptions on export income and easier clearances among others. retailers availing of this scheme will have to fulfil export obligation criteria. FDI up to 51 per cent is also allowed in “single-brand retailing” subject to FIPB (Foreign Investment Promotion Board) approval and subject to conditions that (a) only single-brand products would be sold (i. the retail policy in India is complex and restrictive. However. travel agents and tour operators to promote the tourism industry in general and golf tourism. the Uttar Pradesh government allotted land for sports goods manufacturing and for a sports complex in Meerut.
FDI up to 100 per cent is allowed in manufacturing and foreign companies can have a manufacturing base in India and enter the retail segment through this route. In franchising and commission agents’ services. medical and diagnostic items. Unlike franchising. licensees. e-commerce and not retail trading. designs and technological know-how through such partnerships. Foreign companies are. 20 . these companies are only allowed to do B2B (business-tobusiness). trading of items for social sector. Domestic trading of products of joint ventures is permitted at the wholesale level for such trading companies who wish to market manufactures’ products on behalf of their joint ventures in which they have equity participation in India. the Indian companies can get access to global best management practices. They also felt that it will benefit foreign players in luxury retail segment and segments like sports to enter the Indian market. by partially opening up this sector the government was able to reduce the pressure from its trading partners in bilateral/multilateral negotiations and could demonstrate India’s intentions in liberalising this sector in a phased manner. etc.would not be allowed). trading of hi-tech. in fact. Also. The Indian policy makers are of the view that since Indians spends a lot on international trips. and domestic sourcing of products for exports subject to the provision of EXIM (Export Import) Policy. FDI up to 100 per cent is permitted for e-commerce activities. in India the definition of “luxury” is not clear and hence “single-brand” retailing was thought a more viable option. on the other. FDI (unless otherwise prohibited) is allowed with the approval of the RBI (Reserve Bank of India) (under the Foreign Exchange Management Act). On the one hand. foreign players get local market knowledge and. FDI up to 100 per cent with FIPB approval is allowed for trading of items sourced from small-scale sector. this policy aims to give consumers access to a wide range of foreign brands and international shopping experience within India. test marketing. Countries like Japan first allowed luxury foreign retailers in the market and then opened it up to all types of retailers. This policy can benefit both the foreign retailer and the Indian partner. it enables foreign companies to share the profits with their Indian partners. In manufacturing (including sports goods manufacturing) and sourcing from India. However. However. India is probably the only country which has different FDI policy for multi-brand and singlebrand retailing. (b) products should be sold under the same brand internationally. (c) single-brand product-retailing would only cover products which are branded during manufacturing and (d) any addition to product categories to be sold under “single-brand” would require fresh approval from the government. to source from India The survey found that the policy of single-brand retailing was adopted to allow the Indian consumer to access foreign brands. encouraged to set up representative offices or use buying agents. there are no FDI restrictions.
As discussed above at present. or enter into shop-in-shop arrangements or distribute the brands to franchisees. Some brands give exclusive licenses and distribution rights to Indian companies. Foreign brands such as Nike. There is no screening of the Indian partner (who merely has to be credit-worthy and a resident Indian). Adidas. Reebok. Due to this. Since in India direct selling is a part of wholesale trading. It prohibits the ability of the foreign retailer to choose the most preferred mode of entry. Some sports retailers are using distributors who use the direct selling and other non-store formats like teleshopping to market their products. For instance. which means that foreign companies cannot experiment with new brands created exclusively for the Indian market. through an Indian distributor.A. brands Reebok and Adidas are both brands of the company Adidas AG. direct selling companies in the sports product segment can enter the market. in order to ensure that the international quality and standard of the product is maintained. India ranked quite low (39th) among 67 countries in terms of the percentage of international retailers in 2008. Also. if a foreign retailer has multiple brands it has to take permission under this policy separately for each brand to enter the Indian market. Moreover. This is common in the case of fitness products where the marketing is also sometimes clubbed with health and wellness products. etc. The policy requires that the foreign partner should be the original owner of the brand and not distributors. Through these rights. the presence of foreign retailers in India is much lower than in other countries.). Nike entered through an exclusive licensing agreement with Sierra Enterprises but now has a whollyowned subsidiary. the policy of single-brand retailing has certain drawbacks. among others. Nike India Private Limited. Indian companies can either sell it through their own stores. Lotto and Etonic are both brands of Lotto Sports Italia S. The policy of 100 percent FDI in whole sale cash and carry also does not benefit sports retailers since this mode is most suitable for retailers who operate on volume business rather than specialized retailers like sports retailers who operate on value.However. Most sports product retailers are multi-brand (for instance. Most of the stores of Reebok India Company use this mode for retail expansion. “How Global is the Business of Retail?” (2009). permission is granted only to those brands that are regular product lines of foreign companies. etc. According to the CB Richard Ellis report. a foreign sports brand/retailer can have presence in India through multiple routes such as franchising. Thus.p. the FDI restriction on multi-brand retailing is not a complete entry ban. Franchising is a common mode of operation and both foreign brands and domestic players use this mode to increase their retail footprints. Only a few sports retailers such as Canadian brand Trio Sports Wear (P) Ltd. have applied for entry through the single-brand route. joint venture for a brand with an Indian partner. dealers. A survey conducted by the UNCTAD (United Nations Conference on Trade and Development) on 300 international retailers found that more than a quarter have either opened or are planning to open stores in India if the country 21 . Many international brands from Europe and the US are marketed through dealers/distributors in Asia-Pacific region. that have wholly-owned subsidiary in manufacturing are treated as Indian companies and are therefore allowed to do retailing.
shop’s super built area >=20. mt. mt. shop’s super built area <20. Mt. The basic licenses that a sports sector retailer may require are given in Table 2. shop’s super built area <20. Since retail is regulated by a large number of ministries/authorities at the centre.000 sq.000 sq.000 sq.. using TV/Music system for customers’ entertainment Traditional retailer selling inflammable articles.1. mt. shop’s super built area >=20.000 sq. (no kitchen facility and not using TV/Music system for customers) Traditional retailer. For instance. mt. Table 2. since 2003-04 the Kolkata Municipal Corporation 22 . (with kitchen facility but not using TV/Music system for customers’ entertainment) Traditional retailer. India is under significant pressure in the on-going Doha Round of multilateral negotiations in the WTO (World Trade Organisation) and in its negotiations in bilateral/ regional agreements to open this sector for FDI.1.2.2.000 sq. (no kitchen facility) but using TV/Music system for customers’ entertainment) Traditional retailer. state and local levels it has resulted in multiplicity of regulations which vary across states and even cities.relaxes the FDI norms further. Mt. However. not using TV/Music system for customers’ entertainment Traditional retailer selling inflammable articles.000 sq. using TV/Music system for customers’ entertainment √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ Source: Compiled from the Interviews of Retailers Note: * denotes No Objection Certificate The clearance process for setting up of a sports retail operation varies across states/local authorities.1: General Clearances required by the Sports Retailer Retail Outlet Specification Trade License VAT Registration Number Permission from Amusement NOC* Fire License Traditional retailer.000 sq. mt. shop’s super built area >=20. shop’s super built area <20..1. (with kitchen facility and using TV/Music system for customers’ entertainment) Traditional retailer selling inflammable articles. shop’s super built area <20. it is important to note that sports product retailing is less sensitive than retailing in sectors like food and grocery and pharmaceuticals and therefore subject to a lower level of regulatory control within the retail segment..
25 For instance. However. 2. 26 silver and 17 bronze (Source : : http://www. which has restrictive provisions on the use of land for commercial purposes. India won 33 gold medals.3 India International Strategies and Domestic Policy: Implication for the Sports Sector Retailing As mentioned earlier. the retail sector is regulated by the Shops and Establishment Act which vary across states. etc. India in 2008. Although India’s global ranking is much lower than countries like China in Olympic Games25.2.cygpune2008. 1976. Nepal.merinews. they have to give a day off to their employees and have rotation of employees. states like West Bengal also have given flexibility to retailers in shop timings for stores above a certain shop size and employing a minimum number of employees.com/) 27 Eight countries – Afghanistan.has started a green channel for issue of licenses within one day.26 In the 11th South Asian Games. India. boxing and golf. These retailers can open their stores seven days a week. 28 bronze and 21 silver). India did well in the Common Wealth Youth Games. However. The third game took place in Pune. Pakistan and Sri Lanka – participated in this game. Tax concessions and other fiscal incentives are given for investment in these sectors. Retailers in segments like food and grocery cannot avail such fast track clearances. Maldives. In some states. Bhutan. This Act lays down the conditions for retail including shop opening/closing timings. It has also introduced a process of renewal of trade licenses though banks. The government is encouraging FDI in back-end retail activities such as logistic management. there is a mandatory requirement to keep shops closed once in a week for benefit of employees. in the 2008 Olympic Games in Beijing. India actively participating in international sporting events such as Olympic Games. India had the 50th position with 3 medals (1 gold and 2 bronze) comparatively China was at 1st rank with 100 medals (51 gold. states such as Gujarat and Goa have repealed the Urban Land (Ceiling and Regulation) Act. To facilitate the use of land for retail purposes (shopping malls. Commonwealth Games and Asian Games. 26 The Commonwealth Youth Games started in 2000 in Edinburgh. The government is in the process of implementing a single GST (Goods and Services Tax) by April 2011 which if properly implemented will reduce barriers to interstate movement of goods and enable retailers to have a centralised procurement system. shooting. Bangladesh. India won 175 medals (90 gold. 55 silver and 30 bronze) (source : http://www. The government is in the process of implementing certain policies which will facilitate sports retailing. This has benefitted corporate retailers. From time to time the government has mooted the idea of allowing FDI in multi-brand retailing in segments like sports retailing. cold chains and warehousing and in allied sectors such as food processing. chess.). in 2008 and won the highest number of medals (76 medals) followed by Australia and England. Scotland.shtml) 23 .com/article/south-asian-games-2010-india-wins-174-medals/15797680. At the state level.27 India’s international ranking is good in sports like cricket. 2010 in Dhaka (Bangladesh). Maharashtra. inspection is done after the trade license is issued. India won a large number of medals.
The Ministry of Youth Affairs and Sports, India, has also signed MoU (Memorandum of Understanding) on cooperation in the field of sports with various countries such as Australia, Bulgaria, Belarus and Argentina. Such MoU facilitate or include exchange of sports and physical education team/experts, training, etc. To promote exports the respective export promotion councils namely SGEPC, CLE and AEPC work closely with their counterparts in foreign countries. In India, there are no major barriers for participation of foreign sports person or foreign trainers. However, retail is one of the few sectors in India where there is FDI restrictions and India is under pressure from its trading partners to reduce/remove the FDI restrictions. Foreign retailers also face other barriers in India such as high import duties which have been raised by India’s trading partners in international negotiations both in the WTO and in the FTAs. In this context, it is worth mentioning that India is a founder member of the WTO. The formation of WTO in 1995 has facilitated the process of global integration by a setting up a platform to multilaterally negotiate the removal of market access and discriminatory trade barriers, both tariff and non-tariff. As a member of WTO, India has removed the quantitative restrictions on imports and tariffs have come down progressively. India is actively negotiating FTAs and is under pressure from its trading partners to further reduce tariffs. It is important to note that India’s bound rates in the WTO are higher than the autonomous regime and hence there is scope for tariff reduction.28 Since the government wants to promote India as a manufacturing hub at present tariffs are lower for raw materials than for high-end finished products. The present tariff structure for sports product is given in Table A1 in Appendix A As a member of the WTO, India is actively participating in services negotiations (General Agreement on Trade in Services or GATS). GATS was formed during the Uruguay Round of WTO negotiations and aims to progressive reduce the market access and discriminatory barriers to trade in services (A brief overview of GATS is given in Appendix B). Both sporting services and retailing is covered under the GATS. During the Uruguay Round of negotiations, WTO member countries drew up a Services Sectoral Classification List (MTN.GNS/W/120) based on the UNCPC (United Nations Provisional Central Product Classifications) for the purpose of negotiations. The WTO Services Sectoral Classification List (known as “W/120”29) covered 12 service sectors and over 150 sub-sectors. The sporting services covered under Recreational, Cultural and Sporting services in the W/120 and Retailing services is covered under Distribution Services (Table 126.96.36.199).
In the Uruguay Round the tariff lines bound at 40 per cent and 25 per cent. Where the applied rates >=40 per cent the bound rate is 40 per cent and where the applied rates <40 per cent the bound rate is 25 per cent 29 Services Sectoral Classification List, Note by the Secretariat, WTO Document MTN. GNS/W/120 (10 July 1991). 24
Table 188.8.131.52: Coverage of Sporting and Retail Services W/120 4.A 4.B 4.C 4.D 10.D CPC No. 621 622 631+632 8929 9641 9649 Description Commission Agents’ Services Wholesale Trade Services Retailing services Franchising Recreational, Cultural Sporting Services and Sporting Services Other Recreational Services
Services is an evolving sector and development of technology, liberalisation and innovative business practices has resulted in new types of services and new modes of service delivery. Post Uruguay Round, the coverage of some of the services has changed and the UNCPC itself has undergone changes. In the newer version of UNCPC, there is no major change in the classification of sporting services (UNCPC version 2) but the later version of CPC has taken into account the new modes of retailing. Precisely, UNCPC version 2 has a more detailed classification of different formats of retail such as non-specialised store, specialised store, mail order or internet, other non-store and retail trade services on a fee or contract basis.30 The Uruguay Round (1986-94) was the first round of multilateral negotiations in services. In the round, the commitments were limited. About 14 countries scheduled commitments in sporting services, whereas 22 members committed in retailing (Table 184.108.40.206). At present, the second Round of WTO negotiations, the Doha Round is ongoing. As a member of the WTO, India is actively participating in the Doha Round of WTO negotiations. In fact, unlike its own position in the Uruguay Round, in the current Round, India is a proponent of service sector liberalisation and has given offensive offer. India’s negotiating position reflect its core interest in getting market access and non-discriminatory treatment from its trading partners, especially the developed country trading partners, in sectors like computers and in modes of trade like Mode 4 (temporary movement of people) and Mode 1 (cross-border trade like on-line deliveries) where the country has an export interest. India’s trading partners are, in turn, pushing for greater liberalisation in sectors like retail where there are FDI restrictions. Table 220.127.116.11: Summary of Commitments in UR and Doha Round Services Sporting Services Commission Agents’ Services Wholesale Trade services Retailing services Franchising
UR Commitments 14 16 22 22 17
Doha Round 32 23 31 30 25
Total 46 39 53 52 42
For details see http://unstats.un.org/unsd/cr/registry/cpc-2.asp 25
Source : Compiled by the Authors from WTO Services Database. Table 18.104.22.168 shows that countries have offered to improve their commitments in distribution services and sporting services in the Doha Round. Table 22.214.171.124: Offers/Commitments of WTO Member Countries: Sporting Services and Retail Related Services Sporting Services ◊ ◙ × ■ ◙ Commission Agents’ Services ◊ ◙ ◊ ■ ◙ Wholesale Trade Services ◊ ◙ ◊ ■ ◙ Retailing Services ◊ ◙ ◊ × ◙ Franchising ◊ ◙ ◊ × ◙ × ◊ ◊ ■
Australia EU USA India Japan New Zealand × ◙ ◙ ◊ South Africa* × × ◊ ◊ Brazil ■ ■ ◊ ◊ China × ■ ■ ■ Source: Compiled by Authors from WTO Services Database, http://tsdb.wto.org/default.aspx Note: × - No commitment; ◙ - Improvement in revised offer; ◊ - No improvement in revised offer; ■ - No commitment in UR but in revised offer; * - Given only Initial offer In the Uruguay Round, India did not make any commitments either in sporting services or in distribution services. In the revised offer submitted to the WTO in August 2005 in the Doha Round, India undertook full commitment in Modes 1 and 2 for both market access and national treatment in sporting and other recreational services excluding lottery, gambling and betting. India also undertook commitments in Mode 3 subject to the condition that in case the foreign investor has a prior collaboration FIPB (Foreign Investment Promotion Board) approval is required. Across all sectors for offers in Mode 4 countries referred to horizontal commitments but India also mentioned about reciprocity in the case of sporting services. India’s offers in distribution services covered commission agent’s services and wholesale trade services for certain products only. It did not cover retailing. The mode wise commitments are similar to that of sporting services except that there is an additional condition of approval of RBI and FIPB in conformity with FEMA (Foreign Exchange Management Act) regulations. Interestingly, India has offered full national treatment commitments in the sectors where it has given market access unlike countries like China, Korea, some European countries, among others (Table 126.96.36.199). By not undertaking national treatment commitments these countries have reserved the right to offer discriminatory treatment to domestic service providers.
Table 188.8.131.52: National Treatment as in the Revised Offers of Selected Countries China USA EU India Japan Korea Brazil Sporting Services Mode 1 × × □ √ × × × Mode 2 × × □ √ √ × × Mode 3 × × □ √ √ × √ Commission Agents’ Services Mode 1 × √ □ √ √ √ × Mode 2 √ √ □ √ √ √ × Mode 3 √ √ √ √ √ √ √ Wholesale Trade Services Mode 1 × √ □ √ √ √ × Mode 2 √ √ □ √ √ √ × Mode 3 √ √ √ √ √ √ √ Retailing Services Mode 1 □ (only √ □ × √ √ × for mail order) Mode 2 √ √ □ × √ √ × Mode 3 √ √ √ × √ √ √ Franchising Services Mode 1 √ √ □ × √ √ × Mode 2 √ √ □ × √ √ × Mode 3 √ √ □ × √ √ √ Note: (1) √ Full Commitment, □ Partial Commitment, × No Commitment (2) Type of Restrictions in the EU. For instance, Cyprus, Czech Republic, Estonia, Latvia, Malta, Poland, Slovak Republic has kept Modes 1, 2, 3 unbound and Sweden has given a restriction of financial support to specific local, regional or national activity for sporting services. (3) Mode 4: Unbound except as indicated in the horizontal section The slow progress of the WTO negotiations has led to a proliferation of FTAs/bilateral/regional agreements. India has also joined the FTA bandwagon. These new age FTAs not only encompassed liberalisation of goods, but also services, investment, trade facilitation, among others. The first comprehensive agreement of India, involving the service sector is the India-Singapore CECA (Comprehensive Economic Cooperation Agreement) which became operational in August 2005. India did not undertake any commitment in sporting services. However, India undertook commitments in franchising services along with wholesale trading and commission agents’ services. In August 2009, India signed the CEPA (Comprehensive Economic Partnership Agreement) with Korea. It undertook commitments in sporting services, commission agents’ services and wholesale trade services similar to its revised offer but
India’s offer in the WTO and commitments in the FTAs (inspite of the inconsistency across different parts of the India-Korea CEPA agreement) shows that the country intends to progressively liberalise retail and sports sector. for imported goods an international tender is released. At present. If the players/ federations specify certain brands/suppliers/companies. This indicates that India does not have the intention of rolling back the investment regime in retail. Even in state-level events. especially for practice matches. If the federations/players do not have rigid specifications. In sectors where India has allowed market access. while in the case of cricket the bulk is sourced domestically. gambling and betting and FDI is prohibited in retailing except singlebrand retailing. For around 50. along with the federations. Similarly. The imported equipment is either chosen by the players (who have a strong preference for specific foreign brands) or by the federations. where as in the services chapter. Thus. in the case of shooting almost all the equipment is imported. For all international events. 2. The commitments in investment chapter also indicates that there is no restrictions on wholesale trading. international brands recognised by international federations are often used. SAI is the nodal agency for purchasing goods for all major sports events and it works with the respective federations who specify the standards. Since the present FDI restriction is not an entry ban such restrictions is putting India in a defensive position in WTO/FTAs while foreign players are already present in India. the tendering/ bidding process is open only to those brands/suppliers/companies. it states that FDI is not permitted in lottery business. the bulk of the equipment is procured from local manufacturers in cities like Jalandhar and Meerut. the country tends to give non-discriminatory treatment to foreign service providers. For national and international events mainly foreign brands are used. gambling and lottery. The survey showed a distinct preference for the lowest bidder. For instance. some state-level federations pointed out that they have to use Indian brands. for domestic sourcing a local tender is released and the lowest bidder is chosen to supply the required materials to all SAI centres across India. equipment specified by international organisations/federations is used. is the single largest purchaser of sports goods. the external pressure on India to liberalise the FDI regime in retail will continue. Due to lack of funds. Specifically. but they adhere to international standards. The requirement of imported equipment varies across sports. Moreover.took a negative listing of investment. The survey found that the sensitivity of the retail sector is adversely impacting India’s bargaining position as a proponent of services liberalisation.3 Procurement of Government and Federations The government. India is negotiating comprehensive agreements with trading partners like the EU who will push India to liberalise the retail sector further. in the services chapter India kept Mode 3 unbound for sporting and other recreational services while in the investment chapter everything is open except betting.000 beginners/trainees across India. 28 . commission agents and franchising. India did not undertake any commitments in franchising.
For instance. from 2006 till end of 2010. maintenance and other related problems. For a brand. They liaison directly with federations for use of the brand in sporting events. They only cater to consumers. national and international levels. At the national level. and extracurricular activities along with education. inter-school. most school shoes were supplied by Indian brands. Clubs. Foreign manufacturers generally supply equipment through their Indian or Asian agents in order to avoid replacement. therefore. maintain records of the participants. Some key activities of these federations are to organise sports events. School. With the advent of corporate retailers many of them directly work with government and /or federations. is the core federation for sports at the school level. The CCE system has increased the focus on sports. tend to work closely with schools to get their product approved – even as a part of school dress. clubs academies are the bulk purchasers of sports products. however. Prince and Converse. However. etc. zonal. In the past. the brand stays with them throughout their life. installation. state/district and local levels through wholesalers. in the past. Indian schools emphasised on academic education. few participants represent India at the international level. but now brands like Reebok supply school shoes and equipment. Sports goods imported by the government are exempt from import and other duties. the School Games Federation of India. Brands have come up with competitive pricing strategies to get businesses from schools. Equipment manufacturers supply to government/federations at central. state.4 Working with Schools. distributors. some schools now focus on all-round development which includes sports and fitness. Government agencies also feel comfortable if there is an Indian distributor who can be made responsible in case of any problems. School-level sports competition includes events at the intra-school. During the survey. Colleges. Nike is the official kit sponsor for the Indian cricket team for 5 years. Brands. For instance. access to government/federations is important since the demand for sports products among consumers is created through the use of the product in national and international sporting events. Multi-brand retailers like Planet Sports are also distributors of brands like Speedo. and select teams for international events. an independent body recognised by the Ministry of Youth Affairs and Sports and the India Olympic Association. If they like a brand. government also approaches wellknown brands like Reebok and Nike for important event sponsorship. The government has also categorised school and university games under the ‘priority’ sector for sports promotion. 2. In 29 . district. In fact. set up coaching camps.The survey found that traditional/small retailers do not work with the government and/or federations. etc. multi-brand retailers like Planet Sports and brand retailers like Nike and Reebok pointed out that school children constitutes a big market for sports products. colleges.
etc. among others. for cricket bats31). Nike has been the official title sponsor for 11 of the 21 tournaments that MSSA organises annually for all age groups in both the boys’ and girls’ categories. The title or lead sponsor has the maximum visibility.000 school children in Mumbai with over 360 schools as its members. this applies to any tournament that he/she plays irrespective of who sponsors the event. The federations only handle event sponsorship. Sports brands like Lotto are working closely with tennis clubs across the country which gives visibility to the brand. The sponsorship structure varies for individual and team sports (Figure 2. loyalty packages. It is a sports-promoting body. this gives the sponsor the privilege of extensive advertising by putting banners in the venue. Therefore. federation and sportsperson for sponsorship. The Mumbai School Sports Association (MSSA) is probably the only school sports association in the country. most products and apparel suppliers/sponsors work directly with players. MRF was the key sponsor for Sachin Tendulkar’s bat and now the brand sponsor is Gautam Gambhir 30 . through bulk discounts. the apparel sponsorship has to be for the entire team.2007-08. which caters to the sports needs of over 60. sports products retailers tend to work with government. The latter is an individual arrangement between the sponsor and the player in which the federations are not involved. etc.000 players participated from across the country. clubs. and the federation has no say. badminton or boxing. Unlike traditional retailers. 2. corporate retailers aggressively targets schools. It also conducts sports clinics for the participants.. This is an example of how global brands are working at the school level.5. Purchase of the product is driven by support for the team or individual sportsmen. In an individual game like tennis. etc. In both types of sports.5 Sporting Events and Sports Goods Retailing Sports goods retailing has direct linkages with sporting events in a country. 31 For instance. where trained representatives from Nike educate them on the correct use of sports gear. Consumer becomes aware of the products by watching the game and their favourite team sportsperson using the same. a sponsor can sponsor the event and/or equipment in co-ordination with the respective federations.1). In the case of team events. the federation organised 42 national school sports competitions in which 31. colleges. equipment. Since 2007. but individual players can have their own equipment sponsors (for example. The player can choose his/her apparel. choosing prime slots for the banners. shoes.
chess.5. Tennis. attracting viewership and sponsorship. the participation is low. With increasing health consciousness.1: Sponsorship Structure for Individual and Team Sports Event Sponsorship for Team Sports Event Sponsorship for Individual Event Sponsorship for Individual Individual Games: Golf. Some of them such as ice hockey or skiing are niche sports and are located in specific places (northern India). The overall level of sports participation is low – around one per cent of Indian population participates in sports. running and fitness seem to have gained popularity and participation has increased. While some sports are treated as competitive sports. However. The popularity of and participation in different sports tend to vary across years but some sports like cricket. etc. badminton. football seems to be popular across all years. Also. There have not been any major changes in the status of sports in 2008 with cricket still having the most prominent position. while others such as cricket and football are played across the country. Sports like boxing and shooting have gained popularity in 2008 after India won medals at the Beijing Olympics in 2008.Figure 2. 2. The top ten sports by participation are given in Table 2. retailer’s involvement differs.6 Status of Different Sports in India in terms of Participation and Popularity In India. 31 . swimming is a popular sport but it suffers from lack of infrastructure. Team Individual Source: Compiled by the authors Since sports goods retailing is closely associated with the sports played in the country and its popularity the next section highlights some of the selected sports in India is given below.6. since India has a large population this one percent is equivalent to 30 per cent of the population of a country like Italy. etc. In a tropical country like India. a wide range of sports are played – but sponsorship. The Indian government recognises sports like cricket and football while sports like motor sports are not recognised by the government. fan following. Tennis.1. Nevertheless. swimming in many parts of India is seasonal. Event Sponsorship for Individual Equipment Individual Games: Golf. there are others that are played for leisure or fitness.
The Union of European Football Associations (UEFA) has identified India as an emerging market for the game.6 Swimming 0.1: Top 10 Sports by Participation (in %) Sports 2001 Sports 2003 Sports 2005 Sports 2007 Cricket 9.7 Football 1. viewership 32 (b) (c) . from where they are procured and mode of retailing is given in Table C1 in Appendix C. Top sports brands like Reebok.). leisure and fitness sports.8 Swimming 1. The national sport of India is Hockey and the country won many international awards prior to the 1980s.5 Cricket 8. al (2008). etc.9 Badminton 3.5 Cycling 2.5 Badminton 3.0 Football 1.Table 2.5 Badminton 2. that will also telecast football matches and other sporting events.4 Athletics 0. India’s performance in this game deteriorated and due to poor performance in international events.1 (a) Team Sports Cricket is the most popular sport in terms of participation. along with the popular brands. International brands such as Reebok have re-oriented their strategies in the South Asian region and are sponsoring cricket. It contributes to 80-90 per cent of the total sports revenue.6 Bowling 1.8 Tennis 1. one-day.6 Volleyball 1.5 Cycling 2.9 Chess 4.9 Athletics 1.8 Chess 3. and broadcasters have shown an interest in telecasting this game. It is played in a variety of formats (test matches.4 Cycling 1. individual sports.9 Volleyball 2. The list of some sports. new/niche sports. Adidas and Nike in India.9 Cricket 7.4 Football 1.7 Basketball 0.6. viewership and sponsorship. 2. et.0 Badminton 2. After the 1980s. Manchester United Food and Beverages (Pte) Limited has opened Manchester United Café Bar in Mumbai. but the country does not have any strong indigenous brands.0 Athletics 1. there has been an increase in sponsorship. footballs and other equipment approved by the International Federation of Association Football (FIFA) are used. twenty-twenty.3 Cycling 1. In recent years.6 Football 1.4 Tennis 1.0 Running 1.4 Table Tennis 0. Cricket has contributed to the success of many sports brands like Reebok.9 Fitness 1.6 Swimming 1. An overview of some sports in India is given below. Appendix 4.8 Table Tennis 0.3 Source: Author’s compilation from Fry A.2 Tennis 0.6. 57 and 58.3 Swimming 0.9 Running 1. Football is the second most popular team sport after cricket. Adidas and Nike promote football in India. These sports are classified as team sports.9 Chess 2.9 Cricket 8.1 Bowling 0.2 Bowling 1.7 pgs. India is a manufacturing hub for footballs. For all major events. The bulk of the equipment for this sport is manufactured locally in cities like Jalandhar and Meerut.
during the survey it was pointed out that the prospects for future sponsorship are good. India is a manufacturing hub for racquets and shuttlecocks. etc. training camps. Chess is said to be a descendant of the game. This game achieved national status only after independence and in 1951 the All India Chess Federation (AICF) was established. India hosted the Hockey World Cup and companies such as Hero Honda Motors Limited. this sport has received limited sponsorship. India’s rank among international tennis players is low and.32 In 2010. Chess is a popular game in Indian household and Indian parents like their children to play chess – but the retailing options are limited.2 (a) Individual Sports Tennis is an upcoming sport in India and one of the most popular sports in the individual sport category. 2. The Indian Olympic Association is now trying to improve the quality of the game. (b) (c) 32 This sport has suffered due to poor management by the federation. At present.6. and is also imported from countries such as China and the US. However. The country is fast emerging as a chess powerhouse. The bulk of the equipment is sourced locally. of late. The sport requires minimal infrastructure and is often treated as a fitness activity. with a growing number of international grandmasters. India’s global rank in this game in good. Chess is a popular game in terms of participation.and sponsorship have been adversely affected. CocaCola Limited and brands such as Reebok have sponsored national and international hockey events. unlike in countries like China and Malaysia. bulk of the equipment is manufactured domestically. Badminton is not a very popular racquet sport in India. Chaturanga. The All India Tennis Association (AITA) is trying to promote this sport in India. 33 . As of now. Indian players who participate in international tournaments use only internationally certified equipment and local manufacturers cater to domestic events. Viewership and current sponsorship is low as it is a slow game. the performance of Indian players has not been good in individual matches. equipment is being sourced from countries like China. the French Open and Davis Cup. International sourcing of equipment is limited but. which was popular in ancient India. There are only a few badminton stadiums and a few clubs and academies in India.33 Many national and international companies sponsor this sport including sports brands like Lotto and Reebok. The quality of foreign brands is considered to be better than that of local brands and federations use international brands for important events. state tournaments. but they seem to do well in doubles tournaments. lack of infrastructure and training. of late. and lack of sponsorship. 33 Indians keenly follow international events such as Wimbledon. outdated technology. India’s global ranking is low and there is limited interest among the younger generation. Tennis is a popular sport in terms of viewership. lack of coaching and management assistance. The equipment is manufactured locally in sports hubs like Meerut and Jalandhar.
due the lack of viewership and infrastructure.php?id=1235043408 Formula One has not achieved “sports status” (a sport that has not achieved sports status is not recognised as a sport and. The inclination towards this sport has increased with growing corporatisation and the construction of private golf courses in places like Gurgaon and Greater Noida (in the National Capital Region). Motor sports is a niche sport in India since the cost of infrastructure. equipment etc. corporate sponsorship and viewership. 34 . sponsors have become interested in this sport. the sport did not get the attention of sponsors until recently.750 million (€12 million) 34 and during the survey it was pointed out that it is likely to grow at around 25 per cent annually. both built with corporate initiative. With the strong performance of Indian boxers.3 (a) New/Niche Sports Golf is a fast-growing sport in urban India and is largely treated as a recreational sport. Golf equipment is largely imported from countries like Japan. For international events. The global golf industry is valued at $7 billion (€4. in their stores. There are only two racing tracks in India.8 billion).televisionpoint. does not fall under the purview of the Ministry of Sports and Youth Affairs) in India. motor sports enjoy significant private sector involvement. Some sports brands like Puma have started selling motor sports clothing. Boxing has largely concentrated in small town and rural areas of India and is treated as a game for common man. Most motor sports clubs are corporate-owned and events are sponsored by corporates like JK Tyres and Ford India. As a result.6. the industry is currently valued at Rs.2. (b) (c) 34 35 http://www. India did well at the World Boxing Championship in Milan.35 Nonetheless. accessories. The government is not keen to fund this event and it is considered as a leisure and entertainment activity by the Ministry of Youth Affairs and Sports. In India. In 2009. etc. There are few Indian companies that manufacture golf equipment (one exception is Mayor International Limited which manufactures golf balls) and there are hardly any Indian brands in this segment. The International Olympic Committee has approved women’s boxing as a new event for the 2012 London Olympics. Most of the equipment used in this sport is imported by India. therefore. which is permitted as part of SEZ development.com/news2009/newsfullstory. during the survey. Indian golfers are doing well in international events and many international golf brands such as Greg Norman Collection (golf apparel) and Callaway have a presence in India. the popularity of motor sports is growing among the younger generation. In fact. Sports Authority of India (SAI) pointed out that the cost of organising one motor sport event is equal to the annual budget of SAI. is very high. the US and UK.. Malaysia. India is also among the top countries in women’s boxing. During the survey. However. It gained recognition after Vijender Kumar won the bronze medal in the Beijing Olympics of 2008. it was pointed out that Indians prefer to watch fast and adventurous sports on television and viewership of this sport is increasing.
(b) 36 http://www. they procure local brands manufactured in Jalandhar and Meerut.html 35 . In the past the low-value fitness products were largely unbranded and sold through traditional retailers but of late brands like Reebok have entered this segment. These are mostly manufactured in India. workplace stress. The performance of Indian swimmers in international events used to be good. Puma and Reebok has also forayed into swimwear and luxury brands like Gottex and Ralph Lauren have entered the Indian market. inadequate infrastructure and poor maintenance of the existing infrastructure. Local brands like Trendy Sports are also doing well.reportbuyer.the market was estimated to be around Rs. India is a manufacturing hub and exporter of swimwear and the manufacturing clusters are located in Mumbai.4 Leisure and Fitness Activity Indians are now increasingly realising the importance of health and fitness.36 The end-users include individuals using fitness equipment at home and institutions like health clubs. There are a few government swimming pools. night shifts in BPOs). but it has deteriorated due to lack of scientific training methods. There are gymnasium chains like Talwalkers. hotels and apartment complexes and a few academies. 2. and Everlast.5 billion in 2008 and is expected to reach Rs. changing work patterns (for example. FitnessOne. yoga centres. Body Care and VLCC Health Care Limited. The swimming federation is not very forthcoming. The reasons for this are changes in lifestyles. However. but most swimming facilities are in recreational clubs. among others. and aerobics centres is growing. Equipment like treadmills are often imported. The fitness equipment industry has witnessed a significant growth . Some high-income households have their own gymnasium equipment like treadmills and exercise cycles. In the past. but the fast-selling products are low-value fitness products like skipping ropes and light-weight dumb-bells. This is forcing the younger generation to take up some form fitness activities and the number of gymnasiums.6.3 billion by 2012. etc. but now the bulk of the equipment is sourced from developing countries like China and Taiwan. corporate houses. the NCR and Meerut. because of their price-competitive. Gymnasiums have become a common concept in large Indian cities.the federation uses international brands such as Adidas. the multi-national work culture. 12. Top 10. foreign brands like Speedo have entered the Indian market through multi-brand retailers like Planet Sports. It is a seasonal sport (April to October). equipment was sourced from developed countries. 63. (a) Swimming is seen as a leisure and fitness activity rather than as a competitive sport in India. Recently. changed eating habits and lifestyle-related diseases like backaches. India is a manufacturing hub for boxing equipment. for national-level training camps and tournaments.com/consumer_goods_retail/sports_recreation/fitness_equipment_market_ india.
According to one estimate. There are institutions like Pitanjali Peeth and retail chains of the same for teaching yoga and retailing ayurvedic products. a number of foreign brands and Indian corporate have forayed into sports retailing. 3. the share of organised/corporate retailing in total sports 37 “Update: India Consumer & Retail”. Some fitness centres such as VLCC and Body Care offer a complete health. etc. gifts. and complete fitness and gymnasium kits. Even with the advent of modern retailing. entertainment. Most of the estimates provided by consultancy organisations club sports either with entertainment sector or different sports products like apparel are clubbed with the apparel sector. Yoga does not require any special dress or equipment. However. Therefore. etc.37 During the survey. Sports brands like Reebok and Adidas are coming up with fitness equipment. books.5 There are other sports like skiing. toys. apparel. shoes and accessories. This difficulty is compounded by the fact that there is no official estimate of the total retail market and estimates given by different consultancy organisations vary. 36 . These are linked to the tourism industry and government initiatives for these sports are limited to tourism generation. beauty and fitness package. February 2009. and sports apparel was a part of general apparel retailing.(c) Fitness equipment is sold mostly through multi-brand retailers and through nonstore formats like telemarketing. In the past decade. Yoga is the traditional Indian fitness activity. such as gymnastics balls and exercise mats. Sports Retailing Sports retailing is a niche segment of retailing which involves the retail sales of sports equipment.6.) but its share in organised retailing is high (around 10 per cent). Indians are adopting yoga as part of their daily lives. In the past. Other Sports/Activities 2. Yoga is getting a lot of media publicity as there are dedicated television channels that show yoga programmes. only a few people pursue these as competitive sports.7 per cent including entertainment. In India. Many lifestyle magazines like Femina advertise yoga as a health and fitness tool. the total size of the Indian retail market was $372 billion in 2008. yachting and ice skating that fall under the adventure sports category. Yoga is now taught in Indian schools and the numbers of yoga instructors is increasing. many sports retailers club their products with gifts.. sports retailers sold sports equipment along with toys. while sports shoes was a part of footwear retailing. There is a limited promotion of these activities at national and international level. some foreign brands like Adidas have introduced special yoga mats. This makes it difficult to estimate the size of the sports retail market. etc. toys. it was pointed out that sports retailing constitute a very small part of this market (around 2. Technopak.
Yonex and Dunlop are sold through family owned traditional outlets. companies like Woodland by Aero Club have positioned themselves as adventure sports and lifestyle brands.. shoes and accessories. Reebok and Tommy Hilfiger and they have also opened multi-brand outlets. Nike. However. Liberty and Bata sell sports footwear along with other forms of footwear (casual. They operate in both the retail and multi-brand outlet (MBOs) formats. Some of them have strong presence in school shoe segment. The premium branded sportswear market is around Rs. apparel and accessories. while fast-moving products such as skipping ropes and cricket bats are sold through small retailers. They have a large presence in the shoe and watch segment followed by apparel. In the sports goods/ equipment segment. there are a number of traditional retailers selling canvas shoes. Sport accessories such as watches and sunglasses are sold through exclusive branded outlets (for instance. chain retailers like GKB Optical (sports sunglasses like Oakley) among others. The share of the corporate/organised sector retailing in total sports product retailing is found to be around 30 per cent. They also can have agreements with foreign brands. Planet Sports is the distributor for foreign brands like Etonic. a Reebok outlet). Apart from these. 37 . corporate retailers are more likely to sell high-value technology-oriented products. In the footwear segment. Corporate retailers like ITC Wills Lifestyle have also brought out an exclusive sports range. which is much higher than the share of the organised/corporate sector in total retailing (around 6 per cent). The market sizes of other large brands are: Nike (15-20 per cent). multi-brand products stores such as Titan Watches. Puma. Wills Lifestyle Sport along with their lifestyle products. etc. 40-50 billion and Reebok accounts for around 50 per cent of this market. Lotto and some large Indian brands. There are some large regional multi-brand retailers like Lodhi Sports in the NCR region. namely.retailing is growing at a fast pace. there are a few corporate retailers and the bulk of the business is with traditional small family-owned shops. The survey found that sports shoes account for around 60 per cent of the total sports product market. which may not be well-known sports brands. The presence of corporate retailers varies across different sub-segments of sports namely equipment. Wilson and Converse. and the remaining is Puma. Apart from them. Adidas. There are a few multi-brand retailers. The survey found that there are a few branded sports retailers like Reebok.). apparel. and Lotto who operate across all segments including equipment. multi-brand retailers like M&B Footwear Private Limited. Wilson. shoes. like Planet Sports owned by the Future Group and Primus Group. formal etc. multi-brand department stores such as Shopper’s Stop. Speedo. whereas Primus Retail Limited is the franchisee for brands like Adidas. which has around five stores in Delhi. Adidas (20-25 per cent). who have pan-India operations. Even foreign brands like Cosco.
It helps them to increase their retail footprints. the penetration of sports retailers in smaller cities is somewhat restricted by availability and access to sports infrastructure. The non-store format is growing in India and so is the importance of internet retailing. Non-store formats are common in sports product retailing. which provides opportunities for sports brands to display their products. For instance.com/asia/in.internetworldstats. However. the number of internet users increased to 81 million compared to 40 million in 2006. development of housing complex with facilities for sports like swimming and tennis. Jaipur. it was pointed out that the high streets give better brand visibility than shopping malls. Direct marketing and teleshopping is also common for products like fitness equipment. Pune Ahmedabad High-growth cities and Growing Chandigarh.39 Table 3. while relatively new players like Lotto are planning to expand beyond metropolitan cities. among others which has increased sports awareness. 38 . Mumbai. for which they saw an increase in sales of over 70 per cent in semi-urban areas. discount stores. During the interview. Kochi. Chennai. Reebok has also introduced the concept of customised or self-designed Reebok Classic products. The survey also found that “right-pricing” of the product is important for penetration beyond metro cities. it has made Force India Formula One merchandise available online for fans in India. Ludhiana.38 Brands that do not have a retail presence but are renowned can be purchased through internet retailing sites like eBay and rediff. Each format has its advantages and disadvantages.com. (source : http://www.htm) 39 Images (2009). but the cost of real estate in premium locations is much higher. about 48 per cent of the internet users were using e-retailing. Franchisee is the most common mode of operation for branded retailers such as Reebok. Adidas. Kolkata. Corporate retailers simultaneously operate through exclusive brand outlets. and Puma. which is a profitable strategy since motor sports has a niche market in India. For instance. Lucknow. Hyderabad. among others. Opportunity Vadodara. shop-in-shop with department stores/multi-brand retailers. factory outlets.Sports retailers are operating in India through various formats. development of malls. Department stores are increasingly setting up separate sections for health and fitness. Companies like Reebok and Adidas have designed right-pricing policies. Surat 38 In 2009. In 2009. Bulk of the corporate retailers concentrate in large cities but established players such as Reebok and Adidas are now penetrating into Tier II and Tier III cities. The growth of sports retailing in Tier II and III cities has been propelled by establishments of IT and other companies in these cities. while exclusive outlets give better brand visibility footfalls are more in department stores.1: Selected Cities and Opportunity for Corporate Sports Retailing Modern retail Mature and Transitional Cities Delhi/NCR. Reebok operates through both store and non-store formats. Bangalore.
Moreover. which gives it the right to manufacture. Goa Jodhpur. Puma and Adidas have wholly-owned subsidiaries in India. Some of the well known Indian brands are largely sold through traditional retailers. For instance. Reebok entered India in 1995 as a wholly-owned subsidiary of Reebok International and is now present across 265 cities with around 500 exclusive stores. For example. Amritsar. whereas Lotto entered through a licensing agreement. Coimbatore. Reebok International Limited has brands like Polo Sport. some of the strong Indian brands do not have an integrated retail presence. Since they are incorporated in India they are considered as Indian companies. Jalandhar. there was brand knowledge in the Indian market even before the brands formally entered India. Speedo is the only foreign swimwear brand in India. source locally and distribute products. Brands such as Reebok. Shiv Naresh is a popular Indian brand catering to many national and international sporting events but it does not focus on branded outlets. Normally. Nasik. Bhubaneshwar. Others like Lacoste enter through franchisee agreements. since approval of international federations are required for use of the sports equipment in international and national 39 . The survey found that since India does not have any strong domestic brands the foreign brands are doing well in this country and have been able to expand their presence at a fast pace. Reebok today has the largest presence. distribution and retailing. The survey found that foreign brands have entered the Indian market through multiple routes. For instance. brands enter into India through multi-brand outlets and gradually establish a presence through exclusive brand outlets once the Indian consumers become aware of the brand. Dama Paul & Shark has a 50:50 joint venture with Reliance Brand.500 dealer outlets. Nike initially entered the market in 1995 under a sevenyear exclusive licensing agreement with Sierra Trading Enterprise (STE) and in 2003 established its wholly-owned subsidiary. Hence. Other like Technogym has entered through a distribution agreement. have entered through the single-brand retail route. Some have a mixed model of licensing and distribution agreement or franchising and distribution agreement. They source products from India both for domestic and foreign markets and have an integrated operation encompassing sourcing. Rajkot. Aurangabad Source: Compiled by authors from the survey The FDI restriction in retail is not an entry barrier for foreign brands. In fact. foreign brands such as Adidas and Lotto have had a presence in India for a long time in the footwear segment through multi-brand retailers like Bata. 200 shop outlets and 2. The Indian market is not saturated in terms of brand presence. Ralph Lauren and Rockport. Kanpur. Patna. Nagpur. Agra. Indian manufacturers work for a large number of global brands but all those brands are not available in India. Among the branded retailers. Moreover. Some retailers are entering through joint ventures – for instance. and a Canadian brand Trio Sports Wear (P) Ltd.New and Emerging Nascent – will take some time to grow Indore.
When asked about the Indian market for sports products. Very few like Kappa have tried to partner with players who do not have a proven record in sports retailing. there has been an increase in brands for sports like golf and motor sports. clubs etc. Of late. Some international players are working closely with federations and sports development at school. Most sports brands have positioned themselves as sports-cum-lifestyle brands. Indian society is changing and consciousness about health and fitness is increasing. brands like Kappa which have positioned themselves only as lifestyle products have not been very successful in India while others like Puma which have positioned themselves as both sports and lifestyle product has been successful. The survey found that most successful brands have carefully planned their brand positioning. Footwear Design Institute and famous designers like Manish Arora to design their product range. 40 . examples are Callaway (golf) and Ferrari (Motor Sports). especially the equipment market. and companies with proven sports distribution capacity such as Sports Station India Private Limited and Planet Sports. The parent company provides training to the franchisee and their employees.level sporting events. lack of association with a sport may adversely impact the retailing of the brand. since Indians have broader front foot than Europeans. colleges. The survey found that unlike Indian brands foreign brands have a better bargaining power and sometimes use their right to refusal to sponsorship of an event/player. This is an important segment for volume sales. Nike. For instance. Reebok also associates with designers from the National Institute of Fashion Technology (NIFT). for instance. An association with a sporting event is the key to success of a sports brand and therefore the retailer of that brand in India. well-known franchisers. in the past Indian brands had a dominant position in the school shoe market but now foreign brands like Reebok has entered this segment. To cater to the niche market. The most preferred partners for foreign retailers/brands are established Indian business houses. generate niche products and become competitive. foreign brands are more likely to be used than domestic brands (since they have the approvals). pricing and selection of Indian partner. but the level of sports participation is low which limits the size of the sports retail market. Reebok has customised its footwear for Indian consumers. experience in the trade. sports sponsorship. Successful brands like Reebok. The Indian franchisee partner is carefully selected on the basis of a sound financial background. In fact. and they have not been very successful. All the successful brands in India have re-oriented their products to meet local tastes and preferences. Although Indian consumers are less oriented towards sports. Puma and Adidas have associated themselves with popular sports like cricket. most retailers pointed out that the market is nascent but the market will grow at the rate of 20-25 per cent in the current year. and ownership of shops in prime locations.
For this. Table 3. etc. visible positioning of women’s merchandise. Reebok started a knitted salwar kameez which did not succeed while Puma was not very successful in selling golfing equipment. almost all established brands source the majority of their products from India. while in shoes it is running shoes. Puma and Nike are trying to attract women customers through exclusive women’s outlet. track pants and T-shirts. but of late many branded retailers such as Reebok. in cities like Chennai and Kolkata. Retailers pointed out that men are the main customers of sports brands. while in Delhi and Mumbai.The retailer survey provided some interesting insight into consumer behaviour. They pointed out that Indian consumers are price-conscious. Since the younger section of the population is growing in India while the population in many western countries is ageing. Both single and multi-brand retailers pointed out that the fast-moving products in apparel are shorts. and in equipment it is light weights. skipping ropes. western sports retailers are of the opinion that India will be one of the fastest growing markets in future. etc. For instance. Adidas and Puma work through contract manufacturing and only high-end specialised products are imported.the consumers usually start using the product as part of their sports and then develop brand loyalty. For intance. Reebok has come up with exclusive children’s stores and kid’s school shoes to cater to the younger section of the population. foreign brands are preferred.2. The highest and lowest price ranges of different brands and their fast-selling sports products are listed in Table 3. India is not a homogenous market and consumer behaviour varies across regions and even cities. Overall.3 further shows that foreign brands in India are positioning their products at similar price ranges as Indian brands to cater to price conscious consumers. Children are important consumers of sports products . the survey found that both Indian corporate and foreign companies are still experimenting with the Indian market and are learning from their failures. cricket bats. footballs. The survey also found that Indian consumers increasingly prefer to buy all products under one roof and this gives an opportunity to large multi-brand retailers. 41 . The table shows that fast-moving products tend to be in the lowest range. Indian brands are preferred over foreign brands for sports products like cricket equipment. Brands like Reebok.
000/. 42 .(high) 7000/.Playdry T-Shirts moving products Nike Football shoes Total90 Trempo Cricket shoes Total90 Trempo Footballs LX-150 Lifestyle fast.(high) 999/.(high) 2599/Fast-moving 699/5500/.999/.Training category moving products T-Shirts Adidas Football shoes Adi Nova Fig9 Basketball MBA shoes Turbo60 Golf shoes Football shoes Lifestyle Puma Cricket shoes MBA Powerband Gladier Agora sports shoes Polo T-shirts Male Male Male Male Male 3999/.999/.(low) 7999/.999/.(high) 4999/.999/.(high) 999/1595/- Fast-moving Fast-moving Fast-moving Male Male Male Male Male Male Male Male Male Male Male Male Male 4899/.999/.Ferrari shoes moving products Male Note: Prices indicate the highest and lowest prices.) Type Road Plus VI Veron Running shoes Road Plus VI DMXALT Cricket Bats Big Sixer Skipper Basketballs VR-100 Lifestyle fast.(high) 3300/.(low) 10.(high) 3999/.(low) 13.999/.000/.2: Fast-Moving Sports Products and Prices of Select Foreign Brands Brand/Product Category Reebok Fitness shoes Model Gender Price (in Rs.(low) 11.999/.(low) 15.(low) to Fast-moving 2499/.(high) 1199/.Table 3.(low) 11.(low) 18.(low) 14.(low) 11.(high) 4299/.(low) Not Available 14.(high) 3999/Fast-moving Fast-moving Fast-moving M20 Powerstroke Football shoes Extrika Damper2 Cricket bats Gillchrist Vendetta Lifestyle fast.(low) 12.999/.(high) 650/799/- Fast-moving Fast-moving Fast-moving Fast-moving Male Male Male Male Male 6999/.(high) Fast-moving Not Available 7999/.
M.M S.S.D.S. B. BDM Comply Stoma Foreign Indian Indian Indian Indian Indian Indian Indian Indian Indian Foreign 1000-1200 1200-1700 1000-1500 1200-1600 1000-1400 1000-1500 900-1200 2200-2400 750-1500 850-1700 600-1100 Adidas Cosco Nivia Globe Camela Nike Cosco Nivia Spartan Cosco Nivia Jonex Adidas Victor Cosco Sierra Footballs Ownership Price range of some fast moving brands Foreign 500-1000 Foreign 400-500 Foreign 150-200 Indian 400-500 Indian 500 -750 Foreign Foreign 300-400 Foreign 100-150 Foreign 400-600 Foreign Foreign Indian Foreign Indian Foreign Foreign 270-500 250-450 700-800 700-800 145-250 200-350 150-400 Law Tennis Racquets Major Ownership Price range brands of some fast moving brands Wilson Foreign 500-800 Dunlop Indian 500-1000 SRL Foreign 500-1000 Pioneer Indian 800-2000 Wilson Jonex Yonex Cosco Head Wilson Bablot Yonex Cosco Wilson Foreign Indian Foreign Foreign Indian Foreign Foreign Foreign Foreign Foreign 300-700 650-800 2000-3500 1500-4000 2000-4000 600-700 400-600 800-1500 Note: Prices are in Indian rupees.Table 3. 43 .G.G. B.D. S.3: Retail Goods Pricing and Brands City Cricket Bats Ownership Price Major brands range of some fast moving brands Mumbai Reebok Foreign 1000-1500 Stoma Foreign 200-500 Bharat Indian 500-1000 Lion Indian 200-500 Major brands Chennai Kolkata Delhi Reebok S.M G. S.
Use of IT for inventory management. The neighbourhood kirana concept is not common as in the case of food and grocery retailing. Since the product is niche both traditional and modern retailers have to analyse their catchment area and understand their consumers. sourcing and setting up of supply chain is common among the corporate retailers.1). While corporate retailers are most likely to have leased property (76 per cent).1: Comparison of Large and Small Retailers by Product Category For large retailers. Some foreign brands such as Wilson. whereas most traditional retailers are located in prominent shopping areas. The average employee by store size is given in Figure 3. As expected. better infrastructure and catchment area determine the location of their outlets.1. Small family-owned retailers have a good relationship with their customers. the outlets are relatively new. while others operate on a trial-and-error basis.1. while traditional retailers are small retailers concentrate on the sports goods segment (Figure 3.2. traditional retailers can give consumer benefits like purchase on credit due to their interpersonal relationship. Corproate retailers generally tend to be large retailers and they operate across all product segments.3. Since most corporate retailers entered the retail segment after 1995. 55 per cent of whom are regular customers and this gives them an edge over large retailers. Cosco and Yonex are largely sold through small retailers. traditional retailers are mainly shop-owners (66 per cent). Technology such as bar coding is an integral part of corporate retail operation. Some corporate retailers like Adidas have come up with loyalty cards to lure/retain customers.1.1 Traditional versus Corporate Retailers The survey found certain differences between traditional and corporate retailers.1. Some large retailers conduct feasibility studies. A comparison of large and small retailers is given in Table 3. Unlike corporate retailers. Figure 3. 44 . Both these categories of retailer market domestic and foreign brands. the use of technology is more among corporate retailers. In fact some traditional retailers have better knowledge about their consumers.1.
more products (33 per cent).Peak season is summer. Puma or similar brands) Class 12 Source of finance Training Remained the same in 76 per cent. increased in 14 per cent. mostly middleincome & some highincome groups Introduce more products (23 per cent) Large Retailers 1200 sq ft 10 hours/ day 9 years Rs.1: Comparison of Large and Small Retailers: Survey Findings Average shop size Average working hours Average length of business Average yearly turnover Consumer profile (average age) Expansion plans Small Retailers 900 sq ft 10 hours/ day 30 years Rs. Nike. 3.4 million 18-40 yrs. off-peak peak season is winter season is winter Both branded and non. 3 million 20-50 yrs. shop management 45 . mostly highmiddle-income groups and Location Major competitors Popular shopping areas Large retailers Minimum Class 9 or 10 qualifications of employees No.Table 3. decreased in 9 per cent Peak season is summer. 16 per cent of the brands are imported Bank loans and retained Bank loans.1.Only branded branded. more brands (24 per cent) and technological upgrading (9 per cent) Better infrastructure and catchment area determine outlet location Other large retailers (Reebok. of employees in Remained the same in all past 5 years Peak/off-peak season Products More stores (47 per cent). product customers and products knowledge. off. personality development. profits and equity earnings (profits) funding 50 per cent provide staff 100 per cent provide staff training training on handling on customer handling.
Figure 3. 46 .2. By working with distributors large retailers have been able to reduce the number of intermediaries. Distributors focus more on brand marketing than wholesalers. wholesalers had a dominant position.2 and 3. the distribution chain is highly fragmented with numerous intermediaries. The survey found that over 50 per cent of distributors and around 10 per cent of wholesalers work with large retailers.1.2. In the past. some distributors are also trying to access small retailers. As shown in Figure 3.2.1. The sourcing chain for corporate and small retailers is different – small retailers are more likely to source from wholesalers.3.2.2: Average No. The distribution chain for domestically sourced products and imports is given in Figure 3. This has improved the earnings of both manufacturers and retailers and consumers are getting a better price for the products. The difference between wholesalers and distributors is given in Figure 3. but now most large retailers and brands prefer to work with distributors rather than wholesalers. of Employees by Store Size 3.2.2 Distribution Chain and Product Sourcing In India.
Distributors have to provide an office and other logistics support as per the requirements of the company. There is a legal contract between the company and distributor: the company gives a sales target and other necessary support.2: Distribution Chain in India for Domestic Production 47 . Legal documents (except bill of transaction) are not required.1: Differences between Wholesalers and Distributors Wholesalers • Wholesalers procure products from Distributors/ Manufacturers/ C&F Agents. allocates the distribution zone.2. Security is not required (unlike the case of distributors). • • • Figure 3. Distributors are accountable to the company.Figure 3. Wholesalers are not accountable to anybody. Distributors have the power to make sales schemes and promotional activities. they wholesale outlet. need a • • • • • • Distributors Distributors (as sales agent) are appointed by the company They deposit security with the company. etc.2.
In the past.Figure 3.2. India is a manufacturing hub for sports equipment. 48 . boxing equipment. hockey sticks. Sports apparel such as swimwear and accessories such as gloves and footwear (especially leather and PVC footwear) are manufactured and exported from India. Sports manufacturing in India is largely through SMEs (small and medium enterprises) and is spread across the country with different regions specialising in specific products (Table 3. especially of unskilled and semi-skilled workers. around 60 per cent of the production was for the export market. does contract manufacturing for brands such as Reebok. various types of racquets. In all. apparel and shoes. shuttlecocks. but in the recent years domestic demand has increased and now only around 40 per cent of the production is for export. For instance. This is a labour-intensive sector and occupies a prominent place in government policies for its contribution to employment. The sports goods manufacturing industry is over a century old and has been growing at an average annual rate of around 10-12 per cent in the past five years. cricket equipment. the importance of the domestic market for the growth of manufacturing industry is increasing. Cricket equipment has the largest share (around 70 per cent) among goods manufactured for the domestic market. Thus.2. around 318 sports equipment are manufactured in India – these include inflatable balls.1). The companies largely operate on a contract manufacturing basis (around 30 per cent of manufacturing is contract manufacturing). Nike and Puma. It is an export-oriented industry. Moja Shoes Private Limited. Jalandhar and Meerut account for around 75-80 per cent of the country’s sports goods production.3: Distribution Chain for Imported Products Both corporate and traditional retailers source majority of their products domestically. etc.
shuttlecocks. bags and kits. Indian companies are also trying to diversify into new product categories like ski equipment (which has limited demand in the domestic market) and golf balls (largely exported to countries like Germany). environmental. skating equipment. Fila (Italy/Korea). Bicycles. Rawling (US). Lotto (Italy). Reebok was among the first to enter India and the biggest challenge for the brand at that time was to upgrade factories and provide them with the appropriate technology and training. etc. Nike (US). Some clients like Nike strictly monitor quality. hiking and mountaineering equipment Sports apparel Sports shields. Sourcing for the Indian and foreign market is generally though local offices and or buying agents of foreign brands but establishment of contacts and bidding through internet is also common in case of exports. Sports goods. Although the domestic retail market is growing. The number of foreign brands sourcing from India has increased in recent years. labour and other standards. Technology is percolating down from brands/ foreigner retailers to Indian manufacturers. skating and ski equipment. athletics and gymnastics.2. badminton racquets. etc. inflatable balls. Skating equipment Sports apparel. hiking and mountaineering equipment.Table 3. Dunlop (Australia) and Spalding (US).1: Manufacturing Clusters in India by Product Cluster Jalandhar Meerut Sports Product Inflatable balls. swimwear. all the manufacturers emphasised quality and the relationship with their clients. apparel. swimwear. shoes. they attached less 49 . Nike). Puma (Germany). ski equipment. protective gear. trophies and cups. swimwear. Sports apparel. hiking and mountaineering equipment. cricket and hockey equipment. including ski apparel Ludhiana Bangalore Moradabad Delhi Chennai Kolkata Agra Mumbai Pune Tirupur Source: Compiled by the authors from the survey The survey also found that Indian companies manufacture for a large number of foreign brands including Reebok (Germany). the entry of foreign retailers has helped manufacturers to upgrade and attain global standards. trophies. footwear and some goods Sports apparels. etc. Manufacturers are sometimes sent abroad to learn the requisite technology (for example. etc. Adidas (Germany). kit bags. Most manufacturers rated foreign brands better than Indian brands in terms of technology and quality. When asked about the factors that contribute to their growth. The interview of manufacturers also showed that around 76 per cent of their clients are fixed clients. swimwear. Thus. tennis. badminton racquets. etc. Since Indian manufactures have worked with many foreign brands present in India they know their clients well. cups. Many Reebok contractors re-equipped their factories and upgraded the technology to meet Reebok’s requirements. skating equipment. hockey. Cricket and boxing equipment. fishing equipment and shoes Sports shoes Sports apparel.
manufacturers argued that it will help the domestic market to grow.2: Factors Contributing to Manufacturers’ Growth Factors Quality Relationships with clients Contracts from international sources In-house development of new technology Installation of new machines Contracts from domestic sources Promotional activities Foreign technical collaborations Source: Compiled by the authors.whether foreign or domestic will have to source majority of their products domestically if they cater to price sensitive consumers. 50 . Stating the example of China they argued that it will increase the knowledge of India as a sourcing hub and. Some Indian companies use graphite.2.importance to it (Table 3. The bulk of the fitness equipment used in India is imported from China and Taiwan. Post global slowdown manufacturers who use to focus solely on exports are now looking at the domestic market. Manufacturers argued that growth of corporate retailers. In such a case. Also. allowing FDI will be beneficial for the sports manufacturing sector. India is facing tough competition from countries like China which has better technology. Thus the focus of manufacturing is still export-oriented. Per cent 100 100 60 48 40 38 10 10 When asked whether FDI should be allowed in multi-brand sports retailing. Presence of foreign retailers would increase product awareness. Some manufacturers also pointed out that some of their export markets such as the US and EU are getting saturated and hence they have to focus on new markets and domestic economy. Foreign players have to customise their product and there will be scope for technical and design collaboration. therefore. Table 3. despite the fact that they have actually undertaken some form of technological upgrading.2). The country is more competitive for labour intensive products. Manufacturers felt that retailers in India . India is good for manufacturing hockey sticks made of wood. At present. especially entry of foreign players will lead to growth of interlinked sectors like fashion industry.2. If retailers depend solely on imports they cannot enlarge their customer base. but they lack the technology for onepiece composite sticks. Respondents pointed out that the growth of organised retailing in India has helped mitigate the adverse impact of the global slowdown. If FDI is allowed in retailing the foreign brands will focus on India and this will in turn increase their sourcing from India. there is a shortage of technology in India. For instance. they seem to give less importance to technological upgrading. sourcing from India. but China has competence in hockey sticks made of graphite and other composite alloys which are lighter and more durable. use and percolation of technology. however.
3 Consumers A small survey of 200 Indian consumers was conducted to understand their preferences for sports products. Moreover. Mumbai. The size of Indian companies are small compared to countries like China which gives retailers limited options but to import high-end and technology intensive products. Since the purpose of this study is to understand brand presence.4 per cent). Others may have bought it but as lifestyle product and not as a sports product. The survey found that out of 200 consumers only 97 (48. apparel. the survey covered Tier 1 and some smaller cities (Delhi. sports goods. it gives some interesting insights into the shopping behaviour of bulk of the users of sports products. golf clubs and specialised sports shoes. In Pakistan. in India there are separate export promotion councils under different ministries for sports goods. pointed out that the manufacturing industry in India is highly fragmented unlike countries like Pakistan where it is more horizontally integrated. shopping behaviour. occupation and ownership pattern is given in Tables D1 to D5 in Appendix D. Bhubaneswar and Surat). At present. The age group of the sample is given in Figure 3. In India. apparel and footwear manufacturing units are located close together. Existing studies shows that young males are the primary consumers of sports products and this sample has taken that into account. It covered high and high-middle income. Majority of the sample who bought sports product constitute of male (81. The key characteristics of the sample in terms of the age. only around one per cent of the population buy sports products and the sample was drawn keeping in mind the key characteristics of that population. shopping behaviour in traditional and modern retail. Kolkata. Chennai. on the other hand. In some cases tariff acts as a major restrictions as discussed in Section 4. educated consumers and is by no means a representative sample of the total Indian population.3.Retailers. qualification. sex. etc.5 per cent) claimed that they have bought a sports product (which can either be sports equipment.1. 3.3.2) 51 . India is importing products like gymnastic and athletic equipment. among others. apparel and shoes and there is no coordination among these councils and/or their members. However. The respondents are largely located in metro cities (Figure 3. brand consciousness. Around 45 per cent of the sample constitute of office executives which shows that people working in the corporate sector are more likely to buy sports products. Hyderabad. whereas in India they are spread across the country. shoes or fitness goods or more than one of these products).
3.1: Consumer Age Groups Source : Compiled from the Survey Figure 3.3.2: City Wise Consumers Source : Compiled from the Survey 52 .Figure 3.
Table 3. etc. skiing and yachting is limited. Table 3. Indian consumers follow certain sports like tennis.3. The most commonly used brands are given in Table 3. Sports products are generally bought on a yearly basis and majority of the respondents prefer to buy them from exclusive outlets. However. During the survey it was pointed out that it takes a brand around 5 years to get visibility.1: Consumers by Purchase of Branded Products. Although retailers pointed out that they have peak and nonpeak seasons. consumers pointed out that products are purchased whenever required. Only a few consumers buy fitness goods and that too is occasional. football.1. The survey found that the level of sports participation and knowledge of global brands in niche sports like skating.1 shows that consumers are more likely to buy sports shoes followed by sports apparel. golf.2 which shows that foreign brands are preferred in sports apparel and footwear while there are some Indian brands in sports equipment. Place and Frequency of Purchase Product Category Total Numb er of Respo ndent s buy the produ cts 58 77 45 13 Number of Respondent s buy the products Bra Nonnde bran d ded Frequency of Purchase (Per cent share) Where Usually go to buy (Per cent Share) Yearl y Halfyearl y Quar terly Occas ionall y Mall Sports Apparel Sports Footwear Sports Goods Fitness Goods 57 77 45 5 1 8 41 (71) 55 (71) 36 (80) 14 (24) 17 (22) 4 (9) 1 (2) 2 (3) - 2 (3) 3 (4) 5 (11) 13 (100) 21 (36) 22 (29) 12 (27) 3 (23) Exclu sive brand ed Outlet 36 (62) 55 (71) 25 (56) 6 (46) Throu gh emarke ting - Others 1 (2) 8 (18) 1 (8) 3 (23) Source: Compiled from the Survey Note: The calculations are based on the sample of 200 and the percentages are in brackets. the actual purchase behaviour shows that consumers buy sports products like shoes during off seasons’ discounts when they get a lower price. Overall consumers are happy with the proliferation of brands and expressed willingness to experiment with different brands. apart from cricket and have developed knowledge of the brands by watching international sports events.3. 53 . reading sports magazines and newspaper.
Lotto Sports and Ace Reebok. Fitness goods from small retailers include light weights. For instance in many European countries football is played on soft ground while in India it is played on hard ground and hence the show has to be customised for the Indian conditions. Wilson. Pigeon. Cosco. skipping ropes. Puma. For instance. Nike. Mitra. Adidas.1. running shoes are often bought and used for walking on the assumption that they will last longer than walking shoes.3). Nike. Reebok. Product Sports apparel Sports footwear & shoes Sports goods 54 . Majority of the consumers prefer to buy sports apparel and shoes from corporate/large retailers (Figure 3. running shoes are sometimes used for different sports instead of sports-specific shoes. Reebok. Puma.3. Puma and Nivia. Consumers also pointed out that imported products has to be customised.Table 3. Dashney. Adidas. Similarly. yoga mats etc while that from large retailers are products like exercise cycles. Sofian and TSS Fitness goods Aerofit and Telebrand Source : Compiled from the Survey The findings showed that Indian consumers are less aware of the product use than consumers in developed countries. BDM. The survey found that sports shoe brands can be both Indian or foreign but outlets are largely corporate/modern retailers. Sports goods are purchased both from modern and traditional or small retailers. Also. many consumers use Cosco tennis balls to play cricket. Nike. Yonex. Chessman.2: Brands that are Most Frequently Purchased Brand Adidas.
55 .Figure 3. When asked about what factor determined their choice of modern retail outlets vis-a-vis traditional outlets.4). quality assurance. most consumers perceive that modern retailers offer better product quality. exclusive designs.3. Small retailers do have an advantage in terms of availability of credit facilities.3.3: Where do you want to buy the product from? Source : Compiled from the Survey Note : The calculations are based on sample of 200. proximity to customers and their relationship with customers. brand preference and shopping ambience among others (see Figure 3.
When asked about what factors determined the choice of brands. This is a multiple choice question. Percentage calculated on the basis of “high (4)” and “very high (5)” on factor importance ratings. Brands also offer more variety and better designs which are important especially in the case of apparel.4: Factors in Choosing Modern Retail Outlets Source : Compiled from the Survey Note : (1) The calculations are based on sample of 200.3. (2) Scale of 1 to 5. Interestingly.Figure 3. the most important factor is better quality. peer pressure and advertisement did not have a good ranking. higher is better. 56 .
The survey found that there are only 3-4 tennis stadium managed by the government. retailers. etc. The sports retailing business is driven by the level of sports participation in a country.5: What factors determine the choice of brands? Source: Compiled from the Survey Note : The calculations are based on sample of 200. apart from the retailers and their consumers. sports sponsors. federations. golf and motor racing is expensive and beyond the reach of the majority of 57 . the level of sports participation is low. The existing government funding is much lower than required for a country with a large population like India. clubs. the existing infrastructure is not well-maintained and tends to concentrate only in a few cities like Delhi and Mumbai.3. • Sports is treated as an entertainment and leisure activity and not as a serious career option. shooting. • India is a developing country and participation in some sports such as tennis. Until recently. academies. The salaries of majority of sportsmen are low and this acts as a disincentive to pursue sports. • There is a shortage of sports infrastructure. participation in sports was not compulsory at school level and many schools do not have adequate sports infrastructure and training facilities. Facilities like indoor swimming pool is lacking in India. In India. This is mainly because of reasons which are listed below: • The Indian society does not have a sports culture like the western societies where the younger generation tend to be associated with a particular sport. • The focus at the school level is on education and not sports. 4.Figure 3. Barriers to Sports Retailing Sports retailing is a niche and complex segment of retailing which involves the government. Moreover.
the survey found that it is difficult to get sponsorship for sports like chess and swimming in India while it is easier for sports like cricket and football. while procuring products the focus of the government is on lowest prices and. 2009) Note: RE – Revised Estimates. Although. this limits government procurement. The government is also not keen to promote sports like golf and motor sports where Indians are trying to do well in international events.1: Financial Outlays of the Ministry of Youth Affairs and Sports for Sports and Physical Education Source: Ministry of Youth affairs and Sports (2006. therefore. BE – Budget Estimates 58 . For instance.1 shows the government expenditure for the past five years bulk of which is for the Commonwealth Games. limits the market size for sports retailers. There is a lack of scientific training in sports like hockey and swimming which has led to deterioration in India’s global ranking in these sports and therefore sponsorship and participation. the All India Tennis Federation pointed out that only 5 per cent of the Indian population can afford to play tennis. Although a number of sports are played in India. contracts are given to lowest bidder without proper evaluation of quality. The low level of sports participation and awareness. The survey found that retailers and brands face several problems while working with federations and government. 2007. only few receive good sponsorship. Table 4. Since the budget outlay for sports is low. For instance. Some of the survey respondents have questioned the transparency of the procurement process. The Indian government has not focused on development of sports by linking it to improvement in physical health of the community. 2008. Figure 4.• • Indian population. the sports policy refers to development of sports at grass root level. the government expenditure is concentrated in large cities. Moreover.
Both corporate and traditional retailers referred to lack of infrastructure such as proper parking space. In the absence of sponsorship they are dependent on the government funding for sports promotion. It is easier for retailers to work with some federations like the All India Tennis Federation or BCCI while it is extremely difficult to work with federations for sports like swimming. infrastructure. on the other hand. They sometimes make unreasonable demands to the retailers/sponsors. pointed out that sports retailers and brands focus too much on talent endorsement rather than endorsing the team or the event. among others. which makes it difficult for brands to support the players. The other sports related barriers include lack of budget and focus of state governments who play the significant role in sports promotion. although some states are in the process of amending the old Acts. approach roads. They pointed out that the focus of retailers/brands is on a few sports like cricket will hamper the retail business especially that of large multi-brand retailers who need to showcase a large number of brands and products. lack of clear ownership/titles and high stamp duties have resulted in grey markets for property. They are often run by ex-government official or military officials who are honorary/part-time and have political connection. Federations. Shortage of electricity also restricts shop timings. At the retail end. Hockey is an example of how the national sport of India can deteriorate due to lack of funding. security concerns during major sporting events. Retailers further argued that many federations are not professionally managed – most of them are registered societies under the Societies Act. Interference from the government impacts their autonomy. lack of corporate sponsorship for state level and local events. this leads to poor performance of players in international events. Retailers pointed out that there is a lack of coordination between different government agencies and government agencies and federations. Many federations suffer from shortage of funding and this leads to a vicious circle – shortage of funding makes it difficult to upgrade and invest in training and development of players. Power failures are common and retailers have to invest in captive power supply which adds to the cost.Federations have pointed out that infrastructure facilities are inadequate. poor management by federation. lower involvement of private sector in sports compared to developed countries. and due to poor performance private sponsors are not willing to fund the sports and the sports loses its popularity. the survey found that some federations do not have much control over the players. outdated technology and poor sponsorship. warehousing facilities and electricity as the main barriers in the retail sector. There 59 . Laws related to land conversion and Rent Control Acts vary across states. the core concerns of the corporate and traditional retailers are similar. Nonavailability of government land together with fragmented private holdings makes it difficult for retailers to acquire large plots of land. Real estate costs are very high in cities such as Delhi and Mumbai due to high stamp duties and restrictive zoning regulations. Interestingly. The property market is not transparent. the process is not uniform across the country. which limit the availability of land for retail/commercial purposes. They cannot enforce the contract properly.
their target consumers (who are educated. During the survey. The survey found that there are only a few fast selling products and consumers’ awareness about the use of the product and/or the latest technology is limited. without this link they may not have a wide customer base. There is a shortage of skilled personnel at the management level and retailers have to invest in training. There is no official data on the retail sector of India and the data from different consultancy companies vary. etc. The advertising costs are also high. leading to limited flexibility of operations and employment of part-time employees. Sports is treated as a means to keep fit and there are low-cost fitness options like yoga which do not require equipment. most large retailers can focus on a few cities. which make sports products a direct competitor to other recreation options like watching movies. brands which are not treated as luxury brands in those countries are treated as luxury brands in India. electricity and other problems. Retailers often face the problem of how they should market/sell a particular product. At present. Most consumers treat sports as an entertainment and leisure activity. Interestingly. They carefully select the product which they think 60 . Indian consumers are price-sensitive and not as brand-conscious as their western counterparts. Although the population is large. small retailers have not raised this issue.is no urban planning and illegal constructions of shops not only aggravate parking. This problem is more acute for large retailers. Some foreign brands pointed out that in India there is a focus on sports like cricket which they do not sponsor. but also create operational uncertainty. Retailers pointed out that although the population is large. Market research studies tend to present an optimistic picture of the country without highlighting the difficulties of retail operations. Some foreign retailers who have tried to position their products only as casual wear have not succeeded in India. The level of sports participation is low and they can only sponsor a few sports which has viewership and interest. India is not a uniform market and there are regional variations in consumer preferences. Linking sports with lifestyle product and casual wear can result in a loss of identity on the one hand while. The brand loyalty is low and consumers are experimenting with multiple brands. most retailers were confused as to whether they should position their products as a sports wear or casual wear. Corporate retailers pointed out that stringent labour laws govern the number of working hours and minimum wages. Since in India the purchasing power is lower than developed countries. hence purchases are made only when required. Lack of brand knowledge makes it difficult to penetrate the market and so the brands have to spend on marketing and promotion. retail is yet to become a preferred career option for most of India’s educated class that has chosen sectors like IT (Information Technology). Large retailers tend to complain more about the real estate and other infrastructure cost than small retailers. young and from urban areas) make up only 10 per cent of the population. on the other hand. Many sports in which foreign retailers have competence or interest in sponsorship are not acknowledged as sports by the government and have a very niche market in India. sports is not treated as a basic necessity. BPO (Business Process Outsourcing) and financial services. Moreover. Further. Some retailers are also confused as to whether they should position themselves as a luxury brand. the actual purchasing power of the masses is low. shoes.
requirement for multiple documentations at state borders increases the costs of inventory management. Both traditional and modern retailers have pointed out that the Indian manufacturing sector has not focused on strong brand development. Some laws related to this sector are outdated. it is difficult to raise concerns or discuss issues with any particular ministry. Delays in transportations.97 percent in 2005-06. in many states.41 percent in 1999-00 to 14. state and local/ municipal levels.40 Inter-state differences in definition. These laws have restrictive shop timings and require shops to be closed once a week. There are restrictions on foreign retailing in India and many foreign brands want to enter once the market is open. The retail sector in general is subject to a plethora of laws and regulations at the central. enforcement and incidence of taxes make it difficult to have a uniform pricing model across the country. In fact. Brands like Speedo face problems of counterfeit products which reduce their market size and revenues. Although this was done with the intention of giving employees a day off. the regulations are state-specific and retailers targeting pan-India operations have to work with individual state governments. There are only a few strong Indian brands and hence they have no options but to market foreign brands. In states which have given leeway to modern retailers. This implies that India spends $30-40 billion more than it should on logistics due to inefficiencies in the system. Hence there is a limited availability of brands which prevents economies of scale. It also estimated that approximately 14 per cent of a product's cost represents logistics-related costs.their consumers will like and through a trial and error method they develop knowledge about consumer preferences. Small retailers pointed out that consumers have shown preference for branded products to unbranded products. This results in infiltration of products from states 40 Planning Commission (2009) 61 . such laws are redundant for modern retailers who can use employees on a rotational basis. the Shop and Establishment Acts are over 50 years old (the Delhi Act was made in 1954 and that of Mumbai in 1948). the logistic chain is highly fragmented and is marked by the presence of a large number of intermediaries. Both traditional and corporate retailers referred to a large number of regulatory barriers although they are impacted differently by the barriers. For example. They reach the retail segment through importers and wholesalers. There is no nodal ministry or any specific legislation for this sector even at the centre. A Planning Commission estimate shows that logistics costs in India as a percentage of GDP increased from 13. the traditional retailers suffer. In India. small retailers tend to complain more about inconvenience in shop opening timings and police harassment than large retailers. Since retail is a state subject. Hence. The survey found that counterfeit products are manufactured within the country and imported from countries like China. The requirement of multiple clearances from different government ministries/departments causes delays and affects efficient operations.
Retailers pointed out that technology-intensive products have to be imported.40 0.26 37 Equipment (Bags) 24 3.22 0. This does not allow economies of scale in sourcing.66 1. apparel and shoes and there is not enough coordination between these councils. In India. they are aware of the price differences and tend to purchase the same during their international trips. The manufacturing sector in India is marked by the presence of SMEs.4 62 . Kashmir has now banned the sale of willow outside the state.35 Landed cost 25. bribes and corruption among others. The government approach towards development of manufacturing is also fragmented.3). They do not even participate in international fairs/exhibition together and only SGEPC gets represented. An Indian consumer travelling abroad can buy the product at a cheaper rate than India (Tables 4. after the bird flu in China.93 Other costs 1. Since most corporate retailers cater to high and high-middle income group consumers who travel abroad (many of them frequently).37 9. There are separate export promotion council for sports goods. Table 4. Retailers argued that the focus of the government on the sports sector is limited to export promotion and not on the development of the domestic retail market.2 and 4.with lower taxes to states with higher taxes. For instance.88 Duty ( per cent of FOB) 51 Source: Information provided during the survey.5 2.71 5. Willow is used for high-quality cricket bats and it is mainly procured from Kashmir and the UK. the import duties are very high for finished products (around 24 per cent) which increase the price of the product in India. inadequate warehousing facilities in airports. Retailers have also referred to other import barriers such as delays and cumbersome custom clearance process. Corporate retailers argued that multi-point taxation makes it difficult to set up a centralised sourcing infrastructure.58 33. Apparel 38 6. They also argued that high import duties are inconsistent with the policy of single-brand retailing which wanted to allow the Indian consumers to access global brands. Most retailers do contract manufacturing with multiple manufacturers and hence faces the risk of losing control over the production process.5 Total duty 7. Post global slowdown export promotion councils like EPCH (Export Promote Council of Handicrafts) are focusing on the domestic retail market. the Indian government banned the import of feathers which adversely affected shuttlecock production and supply. Sudden and unplanned shortage of raw materials can lead to non-availability of goods at the retail end. Retailers with chain stores often cannot work on a hub-and-spoke model with a centralised merchandising office due to the heterogeneous tax structure.2 : Import Duties for Nike Footwear MRP($) 98 FOB ($) 15. resulting in black marketing.
In fact. Policy uncertainty adversely impacts long term business planning. very few foreign sports retailers have applied for entry through this route. Hence. Survey participants pointed out that even if government increases the FDI limit to 100 per cent for single-brand. India is probably the only country to come out with such a policy in a situation when consumers are not brand conscious.700 156 Citius 4. the debate has shifted from foreign versus domestic retailers to large versus small retailers.2.200 98 Dart VII MSL 3.2. By imposing a market access barrier like FDI in a situation when foreign players can easily operate in India.3 : Comparison of Nike Rates in India and the US Style Name Rs. Sports manufacturers. too. the country is not only losing valuable foreign exchange but also the business opportunities that could have been there by clubbing sports retailing with the series of international sporting events that India is hosting. As mentioned earlier. In fact. Also. and provide consumer access to a wide range of products. manufacturers. The 100 per cent FDI in whole sale cash and carry has not benefited the sector since this policy benefits volume sales and in the case of sports goods the quantum of sales is small. distributors and retailers argued that the restriction on FDI in multibrand retailing is hampering the growth of this sector. the present FDI restriction is not an entry ban – it only restricts the ability of the foreign retailers to choose the most preferred route of entry. In India.200 75 Source: Information provided during the survey.Table 4. manufacturers pointed out that while the international market is getting saturated the domestic market is growing. For instance. Some foreign retailers argued that Indian consumers demand certain commitments. Domestic corporate retailers argue that FDI in multi-brand retailing will enable Indian retailers to get foreign technical know-how and finance. they prefer to have good after-sales services and companies need good after-sales infrastructure.900 254 Air Pegasus+26 6. sector experts have raised concerns about the single-brand policy. Moreover. They further argued that while most countries do have some regulation which can be restrictive (see Table 4. retail US$ equivalent US retail 160 85 72 55 42 Price difference (per cent) 59 85 36 48 77 Air Max 360 2009 10. Retailers.500 82 Rayong 3. countries in general are moving away from FDI restrictions. 63 . only a few retailers will choose this route for sports retailing. the policy is very restrictive as mentioned in Section 2. during the global slowdown many Indian corporates faced financial crunch and are of the opinion that joint ventures will ease their financial situation. In such a situation the expansion of the domestic market is crucial for their growth. Many sports retailers are multi-brand and even if the government allows FDI up to 100 per cent in single-brand retailing it will not benefit multi-brand retailers like Reebok. they cannot afford to only focus on exports.4) for the expansion of corporate/chain retailers. For providing such services they have to invest and take long term business decisions.
China. Table 4. Korea Tobacco products – Australia. Malaysia (Bhumiputra). the protest from traditional retailers on FDI relaxation or entry of corporate retailers is lower than in segments like food and grocery. Italy. the Netherlands. This is because the product that traditional sports retailer sell is different from corporate retailers – with the former selling toys. Czech Republic. Indian manufacturers to supply to foreign brands in India and Indian retailers to enter into strategic partnerships. Austria. Oman (51 per cent Omani shareholding to own show room) France Japan. Italy. because often they do not get the right partner and sometimes they have to share their profits even though the Indian partner makes no contribution. Sweden. Spain. apparel and accessories. shoes. the survey found that the key problems of traditional retailers are infrastructure. Germany . Norway. Germany. Some foreign companies pointed out that the partial FDI in single-brands is not useful. Poland. France. Japan. China Japan. Spain Pharmaceutical products – Austria. France. 64 Countries Japan. Greece. Italy. Overall. Hungary. the UK Sale of Alcohol – Finland.Since a number of different types of sports are played in sporting events like Commonwealth Games it could have been an opportunity for federations to get sponsorship. sports retailers like Reebok. Moreover. regulations.4: Restrictions Restrictions Zoning Restrictions Nationality requirement Economic Need Test Rigid Labour Laws Labelling requirements State Monopoly Stringent Retail Regulations (Shop opening timings etc. The survey found that both Indian and foreign retailers had mixed experiences in choosing the right partner. Denmark. Korea. Italy. The survey found that in the sports segment.) Local employment Nigeria. France Requirement Source: Compiled by the authors from USTR (2009) and Boylaud. Qatar. Hungary. France. Sweden. Olivier and Giuseppe Nicoletti (2001). They also argued that in the policy there is no condition on the Indian partner who can also be a sleeping partner. If these are met they are ready to face competition. Adidas and Puma generally expand through franchise mode which provides employment and opportunities to the Indian partner – and hence this segment has created employment instead of loss of employment. streamlining of the sourcing network and lack of access to finance. Netherlands. France Austria. Turkey France. gifts and sports equipment while the latter concentrating on sports equipment. Belgium. While sleeping partners do not interfere with the day to day retail operations they may not be able to help with the local market knowledge. Iceland.
In a developing country like India. Government funding in sports infrastructure should increase and it should be spread across a wide range of sports and beyond metro cities. private sector participation should be encouraged through innovative means. One prime cause for neglect of sports at the central government level is that it is a State subject. The Ministry of Youth Affairs and Sports can enter into public-private partnership (PPP) for development of sports infrastructure. etc. Federation themselves have to come up with innovative methods for sports promotion. Since the government funding is limited. tax concessions for construction. inter-state and intra-state coordination is required to develop sports in a coordinated and comprehensive manner. for such policy to succeed school should have adequate infrastructure. advertising and audio-visual. The low level of sports participation in India is partly due to the lack of government focus on this sector. The Ministry of Human Resource Development’s CCE system by making sports a compulsory component of secondary education is a right step towards development of sports at school level. India can come up with a regulation which links sports to health. Greater inter-ministerial.5. In this context. The focus should not only be on creation of infrastructure but also its maintenance. the Ministry of Youth Affairs and Sports have to work closely with the Ministry of Health and Family Welfare and Ministry of Human Resource Development. only a few federations are taking initiatives for popularising their 65 . Such benefits are required so that the government can monitor the charges for the use of the facilities and its maintenance so that these are affordable to the population at a reasonable rate. private sectors willing to sponsor national events should be given the contract if they are also willing to sponsor some of the events at school. centre-state. While private sector is keen to undertake construction in large cities the ministry’s own investment should focus on grass root level. For this. Private sector can be involved in development of sports facilities in private schools. Like China and Australia. the government policy should take this into consideration and develop sports as a business. The government policies directly impact the growth of the sports sector and this has implications for sports retailing. India can learn from the experiences of countries like Australia and China. Sports complexes can be created in Tier II and III cities through public-private initiatives in which government provides the land. Reform Requirements The discussions in the previous section show that sports retailing in India faces multiple barriers. However. Development of sports sector has strong linkages with development of other sectors like tourism. During the survey some respondents pointed out that like in the case of airlines. At present. This is a labour intensive sector and contributes to human capital development. This policy has certain good recommendations such as linking sport and tourism but the delays in implementation have affected the development of sports in India. state and zonal levels. The Comprehensive Sports Policy (2007) recommended that sports should be in ‘concurrent list’ instead of ‘state list’. Federations have to be autonomous – they should be freed from political interference and should be professionally managed as per the guidelines of their respective international federations.
Many retailers faced business 66 . getting sponsorship. In manufacturing. At present. India is investing on infrastructure like development of national highways. since retail is a part of trade. The Act needs to look into flexibilities on shop opening timings. At the retail end. regularly conducting training and tournaments. 24*7 manning of check posts and green channelling of toll points. The issues of displacement of traditional retailers in neighbourhood shopping centres by large retailers. there is a need to identify a few products where there is possibility for technical upgradation and the focus should be on those product categories. The logistic chain in India needs to be more organised.respective sports. there is no holistic approach to development of sports products and the sector is suffering due to piece-meal development approach of different councils which are not connected to each other. Ministry of Consumer Affairs. Retailing is closely linked to urban planning. This raises the issue of whether retail should be treated as a trade or industry. others argued that it should be Department of Consumers Affairs. the major problem of the industry is multiple regulatory agencies and multiple regulations at the centre. In the meanwhile. among others. Unlike other sectors like sports which are also in the State subject. Given this uncertainty. there is no ministry at the centre exclusively looking after the retail sector. it will give some kind of credibility to the profession and they can formally come under the DIPP. state and local levels. the retailers for a long time have been requesting for industry status. This is a good step and if all states follow the basic principle of this model act it will help to streamline the state level regulations. The different export promotion councils under the different ministries should work together for comprehensive development of sports products. Food and Public distribution. parking problems. etc. The Indian industry needs scale expansion and technical upgradation. There is no consensus within the central government as to who should be the nodal ministry and the sector as a whole suffers. retailers were allowed to set up operations and then the municipal corporation implemented sealing of illegal shops. However. there is a need for reforms so that delays in inter-state borders can be reduced. among others. This can be done by computerisation of check posts. the Planning Commission has been trying to streamline the regulations by designing a model Shops and Establishment Act. In Delhi. The “industry status” alone will not solve the problem of multiple regulator – regulation has to be streamlined. Ministry of Consumer Affairs. Within sports equipment. are all urban planning issues. the focus of the government policy should be on improving competitiveness of Indian industry rather than exports. Also the focus of the councils should be on building a strong “India brand”. Food and Public distribution looks after internal trade while DIPP looks after external trade (FDI issues and industry). The Department of Consumers Affairs. They believe that “industry status” will not only give them easier access to funding. While some experts believe that DIPP should be the nodal agency. It may not be possible for a SME manufacturer to get his product approved by an international federation but several of them together with similar products can develop a brand through cooperative mode with the help of the export councils.
Malls are allowed to locate in specific locations with proper connectivity and infrastructure. Those against corporate retailers have argued that modern retailing has marginalised traditional retailers in countries like Thailand. 2002 can take care of anti-competitive prices and predatory pricing. corporate sector is financially strong and has higher bargaining power. In the past. Many Indian pursue retail because there are no alternative employment opportunities. countries have tried to minimise the impact of large retailers on small retailers by proper urban planning and zoning restrictions. Corporate retailers are not a homogenous group. While corporate and branded retailers cater to 10 per cent of the Indian high and high-middle income consumers and will continue to do so for at least next five years. etc. Their clients/customers are also different. If retailers source from SMEs it will lead to employment creation. etc. Also. The Competition Act.losses due to such sporadic measures. Globally. whether corporate retailers would drive the traditional retailers out of business and therefore lead to an reduction in employment. both traditional and modern retailers can grow simultaneously. invest in the supply chain/retail infrastructure and allied sectors. Now. There is a need for alternative employment creation – this can be done in sectors like food processing. create better quality jobs. Large scale demand from retailers can help manufacturers to upgrade and have economies of scale. This will lead to employment generation in the manufacturing segment. Corporate retailers also work closely with government federations clubs. They differ in their operating models. Government and large retailers and educational institutes can work together for skill development. Those in favour of modernisation argue that since the economy is growing. economic growth and changes in consumer demand patterns apart from just the entry of corporate into retail business. The survey found that impact of modern retailing on traditional retailers depends on various factors such as the expansion policy of the corporate retailer. i. increase government revenue due to transparent accounting practices and offer consumers with a wide range of choice. with the entry of Indian business houses in retailing and their ambitious expansion plans. there were apprehensions about the adverse impact of foreign retailers on domestic retailers if FDI is allowed in this sector. Retail is the second largest employer after agriculture. pricing. modern retailers will bring in technical know-how and global best management practices. in the sports sector the commodities sold by corporate and traditional retailers are different. and each can have a different impact on the traditional sector. Since sports products are not part of basic necessity and regular purchase the retail business is different from other forms of retailing like food and grocery. 67 . the debate has focused on big versus small. As mentioned earlier..e.. This has made it a politically sensitive sector in India due to its huge implications on employment. Indians like to be entrepreneurs. which only a few traditional retailers do. small retailers cater to the rest of the population. clients they cater to and pace of expansion. can source and sell products at a cheap rate and therefore can drive traditional retailers out of business and they practice anti-competitive practices including predatory pricing.
There is a need for encouraging tie-ups between mid-sized Indian and foreign business in which both sides benefit. They have a wider reach and due to this even foreign brands are sold through small retailers. and corporate retailers can have access to finance and global best practices. Consumers’ use of products will not increase if they have to pay a high price for it. The small retailers are more affected by other problems like lack of infrastructure facilities. sector experts. It is important to note that retailing is a family-owned business and many global retailers have grown from family-owned business to corporate. Today many sports products used in important sporting events are imported. entry of corporate into sports retailing has not adversely impacted the small retailers. While government and federations can import them duty free there is a high import duty on products like shoes. The FDI policy has been under strong criticism from corporate retailers. zoning and proper urban 68 . In India. manufacturers. foreign brands owners and retailers and India is receiving pressure in WTO and in its FTAs to open up this sector. Hence. more sponsorship for sporting events (today federations are importing these equipment from abroad as per the requirements of international federations). among others. Since the FDI restriction is not an entry ban – instead of having multiple entry routes for foreign retailers which the government cannot monitor. This can only happen if partial FDI is allowed in multi-brand retailing. restrictive shop timings. to increase knowledge about the use of the specific product and technology and access to the product import duties on final products should be not brought down from 24 per cent to not more than 10-15 per cent. This study strongly argues in favour of the need to regulate retail – and this can be done through various means like streamlining regulation. among others. The relaxation of FDI in single-brand to 100 per cent will not make a major change in the FDI inflows or sourcing from India in this segment. If government wants consumers to access brand (as per the single-brand policy). The country will benefit only if 51 per cent FDI is allowed in multi-brand retailing. police harassment. FDI or entry of corporate retailers in sports retailing have not been in the list of top five problems stated by the traditional retailers or their associations. federations. FDI should be allowed and a proper regulation should be in place to see that there is no adverse impact on domestic players. Indian consumers will have access to a wide range of sports products. In fact. This study found that in the sports segment. there are some large familyowned businesses which are known as traditional retailers but have the capability to tie up with global players. This will lead to entry of more brands and better technology products for use by Indian sportsmen. the single-brand policy has not been useful since the policy requires fulfilment of a number of conditions and many sports brands are multi-brand operating through franchising route. irregular supply of products. Large retailers have and will expand through franchising model creating employment opportunities for local Indians.The survey also found that small/traditional retailers have certain advantages over large retailers such as purchase on credit which large retailers will not be able to offer. This limits their use especially by private organisations and consumers.
Some banks. the negative list of FDI in investment chapter only included betting. training of manpower. there is a transition from traditional to modern retailing and as India develops and globalise this will be a natural trend in the country. By over emphasising on market access.planning rather than a FDI restriction. investment in infrastructure and use of IT 69 . Since this sector faces financial crunch. India needs to evaluate the commitments made across different chapters of the India-Korea CEPA. FDI restrictions should be replaced by sound regulations which takes into consideration the requirements of the domestic industry. government owned banks and micro-credit institutions can have innovative packages for meeting the specific requirements of this sector. Lastly. Before going for the India-EU Broadbased trade and Investment Agreement or the India Japan Comprehensive agreement which are due for signing this year. wholesale trading. The government can help the traditional sector to have a smooth transaction and upgrade itself. India needs to reserve the rights to implement regulations and monitor. One of the biggest disadvantages of the small retailers vis-a-vis large retailers is the high purchasing/procurement costs. these crucial issues seem to be ignored. A better negotiating strategy would have been to commit 51 per cent FDI in single-brand retail and not undertake any commitments in national treatment. Moreover. The complexities in FDI policy has led to negotiating complexities. countries are moving away from market access restrictions like FDI restrictions to regulation. The CEPA investment chapter is one of the most liberal investment chapters in trade agreements. such as Syndicate Bank. globally. Also. As shown in Table 4. There can be insurance schemes specially designed for small retailers.4. Government can work closely with them in upgradation of technology. have already started micro-financing for the small retailers. Modernisation will continue. Globally. In the India-Korea CEPA while India has been conscious in undertaking commitments in the services chapter (it does not include retailing and only includes part of wholesaling and commission agents services) in the investment chapter franchising. while India did not undertake any commitments to liberalise mode 3 for sporting services in the services chapter. lottery and gambling. to enhance the country’s bargaining power both in the WTO and FTAs. The government can work with small retailers’ associations to streamline the procurement process and encourage them to do bulk purchases through associations. India also seems to be forthcoming in giving national treatment commitments unlike other countries. commission agent’s services and FDI up to 51 per cent single-brand retailing has been opened up (India has mentioned about the single-brand regulation). There is a need for India to have consistent commitments in the services and investment chapter in international agreement. international negotiations today are increasingly focusing on regulatory issues while India is focusing on FDI issues.
The product needs to be customised for the local market. Large volumes of direct sourcing will enhance their bargaining power of retailers. There is need for brands to be associated with more sports. The industry needs to develop an organised system of data collection and research. However. There is a need to develop sporting culture and greater brand awareness in India. it will reduce the number of intermediaries and manufacturers will also get a better price for their products. India has a large population but only a small number are consumers of sports product. There is also need for more coordination between retail and manufacturing organisation. Today most brands tend to associate with sports like cricket. Similarly after this policy. small retailers through their associations can source in a cooperative mode directly from manufacturers. Since Indian consumers are price conscious right pricing of the products is important for a retailer’s success. For instance. Retailers should do market feasibility study. Irrespective of their size all retailers face problems with acts like Shop and Establishment Act. There is no official system of data collection or evaluation of policy. Working with schools and colleges and sponsoring events at junior level will give brand visibility. Although Indians use sports products as lifestyle products association with a sporting event is the key to success of a brand in India. it was found that retailers who were trying to sell products like export surpluses have a limited market. What Retailers Should Do? This study found that retailers – whether large/corporate or small/traditional . player sponsorship. the retail sector is suffering since retailers are not putting forward their core issues in a unified manner. the impact of the policy has not been studied. During the survey. For this they also need to streamline their supply chain. Large retailers/brand owners have the capability of developing brand awareness through event sponsorship. before the singlebrand policy was initiated there was no market study to see if Indian consumers are becoming more brand conscious. retailers associations can work with manufacturers associations for streamlining sourcing from SME sector. among others. Large and small retailers should work together to identify the common problems facing this sector and making constructive suggestions to the government. While large retailers are investing in the supply chain.face similar problems in India in sports retailing. retailers need to know that anything or any brand will not sell in India. The survey findings showed that there is a shortage of data and information. Small retailers have limited capacity to invest in brand visibility but since they too sell branded products they will benefit once the brands become well-known. Some manufacturers also think that they can sell their export surpluses in domestic market.6. Data provided by different consultancy organisations do not match and many of them tend to present an over optimistic picture of the Indian retail market. they need to understand that the Indian market is heterogeneous and taste patterns vary across regions and even across cities and customise their products as per the consumer requirements. As Indian consumers become more aware. this will not enable them to grow. For instance. 70 . At present.
On the other hand. India has been a manufacturing hub for sports products and the number of brands sourcing from India has increased after liberalisation. distribution and licensing agreements among others. this paper looked at the sports retailing business in India highlighting the opportunities and constraints.it only restricts the ability of foreign retailers to choose their most preferred route of entry. In India. The sector is growing at an annual average rate of 2025 per cent and many Indian corporate and foreign retailers are keen to enter this segment. among others. investment in sports infrastructure. retailing of sports products is growing due to rise in per capita income. Their experiences in developed country markets cannot be replicated in India. sponsors and consumers play an important role. This will increase sourcing from Indian manufacturers.For foreign retailers. global retailers who are facing a saturated market at home and slowdown in countries like the US are now looking at growing markets like India and China. whollyowned subsidiaries. It is important for foreign retailers/brands to have an Indian partner with the local market knowledge. The entry of corporate in this segment has created employment. Around 30 per cent of the sports products retailing is through corporate retail and remaining 70 per cent is family-owned small businesses. manufacturers. Both traditional and corporate retailers have their own strengths which helps them to coexist. sports sponsorship and funding and Indian corporate retailers will have access to global best practices and finance. The study also found that increasing the FDI limit to 100 per cent will not benefit this sector significantly. but its share in total corporate retail is around 10 per cent. The growth of organised retailing in India has helped mitigate the adverse impact of the global slowdown in the manufacturing segment. They need to be aware that although India has a large population they will be catering to only one per cent of it. The study found that the present FDI restrictions are not an entry barrier . The study also found that this is a less sensitive segment of retailing unlike food and grocery and the products sold by corporate and traditional retailers are different. Based on these findings. In the above context. entry of corporate retailers in this segment. increasing health awareness and brand consciousness. There is a need for more private involvement in the sports sector of India – 51 per cent FDI in multi-brand retailing will facilitate this. With the growth of the domestic market some companies which were previously focusing solely on exports are now looking at the domestic market. the study recommends that 51 per cent FDI should be allowed in multi-brand sports product retailing. federations. Conclusion Sports retailing is a niche segment of retailing in which government. choosing the right partner is the key to success in India. Foreign retailers and brands have entered and are present in India through various modes like franchising. This survey-based study found that sports retailing is a small segment of retailing. provide them access to technology. 7. India is hosting a number of international sporting events which has created opportunities for sports product retailing. 71 . increase brand awareness and sporting culture among consumers.
and different export promotion councils in this sector do not work in an integrated manner. the procurement process should be transparent and emphasis should be on quality and not only on price while procuring products from private sector. strong domestic brands. 72 . the efficiency and productivity of the sector will increase. Although India is a sourcing hub for sports products the country does not have an integrated production chain. The study argues in favour of an integrated approach to sports sector development. among others. The role of the government should be that of a facilitator for the development of this sector rather than monitoring and controlling market access through FDI while foreign players are entering through other routes. multiple regulations are same for both corporate and traditional retailers. The study strongly argues in favour of proper regulation – which will help the sector to modernise without adversely impacting the traditional sector. There is a need for government investment and appropriate policy to support the growth of this sector. Once these are addressed. the study argued that complex FDI regulations increases complexities in international negotiations. the country should be careful about undertaking commitments. the different export promotion councils should work together to develop India specific brands and market them. streamlining of supply chain.The study also found that the core problems of this sector such as infrastructure. The study pointed out that too much focus on exports markets which are getting saturated will adversely impact the manufacturing industry and hence focus should be on improving the competitiveness of the industry. The level of sports participation is low and there is a limited access to infrastructure. the government policy should allow small retailers to upgrade and become more competitive. There is a need for more public-private partnership in this sector and this study identifies areas for such partnership including development of sports infrastructure. sourcing from SMEs and branding. Citing the example of the lack of consistency between the services and investment chapter of recently signed India-Korea CEPA. Precisely. Lastly the study found that as India is a member of the WTO and is negotiating comprehensive bilateral agreements with a large number of trading partners. training of employees. India is one of the few countries which still has FDI restrictions while globally countries are moving towards regulating the retail sector. The federations have to be professionally managed.
atkearney.php/Publications/at-kearneys-global-retaildevelopment-index. October 2008. Olivier and Giuseppe Nicoletti (2001). Bulletin No. OECD. http://ideas. BERL ref #4084. Nana. “ Sport Tourism – Interrelationships.org.repec.html 73 . Impacts and Issues”. SportsBusiness. “The potential of sport for development and peace”. Ganesh.com/index. “International Specialization of Major Trading Countries in Global Trade of Sports Goods”. Arpita and Nitisha Patel (2005).pdf Ritchie W.transparency. Mathew and Nirupama Soundararajan (2009).php/Publications/at-kearneys-global-retaildevelopment-index. “Retail in India”. Paris. “FDI in Retail Sector in India”.html AT Kearney (2005). “Regulatory Reform in Retail Distribution”. http://www. “India: Opportunities in the Business of Sport”. (2003). 3/2009. 2003 www. 39.html AT Kearney (2006). “Global Retail Development Index” http://www. 32. Business and Economic Research Limited. March 2009. Mukherjee.php/Publications/at-kearneys-global-retaildevelopment-index. http://www.com/index.org Reports/Publications Transparency International (2009). Vijay and Philip Savage (2008). “Global Retail Development Index” http://www.com/index. Madeleine and Waldimir Andreff (2007). Swiss Academy for Development (SAD). Schwery R. Bharadwaj. New Delhi. OECD Economic Studies No. May 2007. Channel View Publications. Academic Foundation.References Andreff.org/p/spe/wpaper/0715.atkearney. Kel Sanderson and Mark Goodchild (2002). “Global Retail Development Index” http://www.hk/hksdb/html/pdf/research/economicimpactofsportinhk. 2001/1. Academic Foundation. Working Paper No. Fry.icsspe.atkearney. New Zealand. Andy. Brent and Daryl Adair (2004). “Economic Impact of Sport’.html Boylaud.org/publications/publications/wp AT Kearney (2004). Pickles James.hksi. Joseph. “Corruption and Sport : Building Integrity and Preventing Abuses”. Switzerland. August 2002.
Government of India. May 2007. Ministry of Youth Affairs and Sports (2006). February 2009.php/Publications/at-kearneys-global-retaildevelopment-index. UNOSDP (2007). X No.atkearney.AT Kearney (2007). Ministry of Youth Affairs and Sports (2007). Planning Commission (2009).com/index.com/index. 7. SGEPC (2008). “The Bird of Gold: The Rise of Indian Consumer Market”. “Global Retail Development Index” http://www. http://www. “Annual Report 2005-06”. “Global Retail Development Index” http://www.html AT Kearney (2009).in/exim/2000/procedures/ftp-hbcontents-0910. http://dgftcom. July 2008. “Annual Report 2005-06”.in/exim/2000/policy/ftp-plcontent-0910.nic. “Annual Report 2007-08”.nic.htm Department of Commerce (2009b). Ministry of Youth Affairs and Sports (2008). August 2009.31 March 2014.html Department of Commerce (2009a). “Report of the working group on Logistics”.imagesretail.htm McKinsey (2007).htm Images (2009). May 2009.com/index.sportsgoodsindia.html AT Kearney (2008). Sport for Development and Peace International Working Group (SDP IWG).php/Publications/at-kearneys-global-retaildevelopment-index. “Foreign Trade Procedures (Vol. Vol. UN Office on 74 . “Global Retail Development Index” http://www. “Annual Report 2006-07”.atkearney. Government of India.org/Newletters. Government of India. 27 August 2009 . “India Retail Report 2009”.com/about.php/Publications/at-kearneys-global-retaildevelopment-index. Government of India. Ministry of Youth Affairs and Sports (2009). Update: India Consumer & Retail. “Foreign Trade Policy: 2009-14”. http://www. “Sports Newsline”.atkearney. http://dgftcom.aspx Technopak (2009). “Literature Reviews on Sport for Development and Peace”. I).
Sport for Development and Peace.html 75 .php?id=1235043408 http://www.reportbuyer.televisionpoint.html?cid=6a00d8341c034a53ef012875ddb040970c http://www.com/ www.merinews.org http://unstats.com/news2009/newsfullstory.cygpune2008. WTO (1991).wto.keablog.org/unsd/cr/registry/cpc-2.un. 10 July 1991 Important Websites http://www.org/default.com/2008/03/towards-aeurop.com/Industries/Sports/SportsTrends/tabid/274/Default. MTN.html http://www.aspx http://www. “Services Sectoral Classification List .uk/regions/yorkshirehumber/sportfitness.wto.com/article/south-asian-games-2010-india-wins-174medals/15797680.com/press/releases/press_090701.co.npd. Canada.shtml http://www. 2007.Note by the Secretariat”. http://www.aspx http://www.GNS/W/120.com/consumer_goods_retail/sports_recreation/fitness_equipment_market _ india. “National Trade Estimate Report on Foreign Trade Barriers”.plunkettresearch.un.ashx http://www.sportactivensa.asp http://tsdb.org/themes/sport/ USTR (2009). October 18. United States Trade Representative.
61124100) and women’s swimwear of silk (HS 61124910) There is no basic duty preference. 2009) Duty Specification Customs duty41 Duty Structure 10 per cent customs duty is applicable to all sports products except men’s/boy’s and women’s swimwear of synthetic fibre (HS 61123100. articles & equipment for table tennis (950640). other snow ski equipment (950619). 44 Under Section 3(5) of the Customs Tariff Act. Source: Compiled by the authors from http://www. tennis. It can be charged on all goods by the central government to counterbalance excise duty leviable on raw materials.infodriveindia. inflatable balls (950662). lawn tennis racquets (950651). badminton and similar racquets (950659). badminton and similar racquets (950659). golf equipment (950639). other snow ski equipment (950619). ice skates & roller skates (950670) and boxing equipment (95069110). surfboards and other water sports equipment (950629). snow ski bindings (950612). Excise cess Excise cess of 3 per cent is applicable to all sports products except snow ski equipment (950611).aspx Customs duty in India is regulated by the Customs Act of 1962. other balls (950669).Appendix A Table A1: India’s Import Duty Structure for Sports Products (As on July 31. inflatable balls (950662). golf clubs. 43 Additional duty is levied under Section 3(3) of the Customs Act. value added tax. ice skates & roller skates (950670) and boxing equipment (95069110). Basic duty42 preference Additional duty (countervailing duty)43 Additional duty of 8 per cent is applicable to all sports products except snow ski equipment (950611). It is imposed to offset the effect of concessions and subsidies granted by an exporting country to its exporters. have been made applicable on the imported goods as well for counter balancing these taxes. tennis racquets (950621). lawn tennis racquets (950651). water-skis. water-skis. The main purpose of customs duty in India is to prevent the illegal export and import of goods 42 Basic duty levied under the Customs Act. tennis. articles & equipment for table tennis (950640). sailboards (950621). complete (950631). Customs cess Customs cess at 3 per cent is applicable to all sports products. tennis racquets (950621). 76 41 . lawn tennis balls (950661). other balls (950669). golf clubs. Special additional duty44 Special additional duty of 4 per cent is applicable on all sports products except for other gymnastics/athletics equipment (95069190) and articles & equipment for outdoor sports (950699). golf balls (950632).com/indian-customsduty/default. golf balls (950632). sailboards (950621). golf equipment (950639). purchase or transportation in India. 1975 the domestic taxes like sales tax. components and other inputs similar to those used in the production of such goods. Education cess is not applicable to the special additional duty. complete (950631). lawn tennis balls (950661). local tax or any other charges leviable on a like article on its sale. surfboards and other water sports equipment (950629). snow ski bindings (950612).
except sailboards Other Golf clubs. including skating boots with skates attached Ice skates & roller skates. badminton and similar racquets.E.Table A2: Classification of Sports Products According to HS (Harmonized Commodity Description and Coding System) Code HS Code 9506 Description Sports Equipment Articles and equipment for general physical exercise. including skating boots with skates attached Articles & equipment for general physical exercise. surf-boards and other water sports equipment. complete Clubs. complete Golf balls Golf balls Golf equipment (except complete clubs and balls) Other Articles & equipment for table tennis Articles & equipment for table tennis Tennis racquets.S. gymnastics or 77 950611 95061100 950612 95061200 950619 95061900 950621 95062100 950629 95062900 950631 95063100 950632 95063200 950639 95063900 950640 95064000 950651 95065100 950659 95065910 95065990 950661 9506100 950662 95066210 95066220 95066230 95066290 950669 95066910 95066920 95066930 95066940 95066990 950670 95067000 950691 . athletics. whether or not strung Lawn tennis racquets. whether or not strung Other racquets Lawn tennis balls Lawn-tennis balls Inflatable balls Footballs Volleyballs Basketballs Others Other balls Hockey balls Cricket balls Golf balls Rugby balls Others Ice skates & roller skates. except ski poles Skis Snow-ski bindings or ski-fastenings Ski-fastenings (ski-bindings) Other snow-ski equipment Other snow-ski equipment Sailboards Sailboards Water-skis. N. whether or not strung Tennis. gymnastics. other sports (including table tennis) or outdoor games. swimming pools & paddling pools Snow-skis and other snow-ski equipment. whether or not strung Squash or racquet ball badminton racquets.
shafts and heads Sports nets Tennis & badminton racquet pressures Shin/protective guards and elbow or shoulders pads excluding those for football. knitted of silk of wool or fine animal hair of cotton 78 . swimwear . decoy “birds” (other than those of heading 9208/9705) and similar hunting requisites Fishing rods Fishing rods Fish-hooks. thigh and hip protective equipment Other sports equipment Fishing rods. whether or not snelled Fish-hooks. knitted of silk of wool or fine animal hair of artificial fibres Other fibres Ski suits. knitted Track suits of synthetic fibres Track suits of other textile materials. fish landing & similar nets.HS Code 95069110 95069190 950699 95069910 95069920 95069930 95069940 95069950 95069960 95069970 95069980 95069990 9507 950710 95071000 950720 95072000 950730 95073000 950790 95079010 95079090 4203 420321 42032110 42032120 6112 611211 61121100 611212 61121200 611219 61121910 61121920 61121930 61121990 611220 61122010 61122020 61122030 Description Sports Equipment athletics Boxing equipment Other gymnastics/athletics equipment Articles & equipment for outdoor sports Badminton shuttlecocks Leg pads and bats for cricket Shoulder pads for football Hockey sticks and blades Polo sticks including blades. knitted Track suits of cotton Track suits of synthetic fibres. fish-hooks and other line fishing tackle.knitted or crocheted Track suits of cotton. whether or not snelled Fishing reels Fishing reels Other fishing & hunting requisites Fishing landing and butterfly nets Others Sports Apparel Articles of apparel & clothing accessories of leather or of composition leather Sports gloves – mittens & mitts Gloves for sports Mittens & mitts for sports Track suits. ski-suits. waist.
knitted 61123910 of silk 61123920 of artificial fibres 61123990 Other fibres 611241 Women's/girls' swimwear of synthetic fibres. etc. knitted 61124910 of silk 61124920 of artificial fibres 61124990 Other fibres 6211 Track suits. basketball shoes. with outer soles of rubber/plastic 64041110 of rubber sole with canvas upper 64041120 of rubber sole with leather cloth uppers 64041190 Other Source: Compiled by the authors from http://www. tennis shoes. not knitted 62112000 Ski suits Sports footwear 6402 Other footwear with outer soles & uppers of rubber or plastic 640212 Ski boots. training shoes. knitted 61124100 of synthetic fibres 611249 Women's/girls' swimwear of other textile materials. with uppers of leather 64031910 Other sports footwear with outer soles of leather 64031920 Other sports footwear with outer soles of rubber 6404 Footwear with outer soles of rubber.dgft. plastic. etc. not knitted 62111100 Swimwear for men or boys 621112 Swimwear for women or girls. leather or composition leather and uppers of leather 640312 Ski boots and cross-country ski footwear and snowboard boots 64031200 Ski-boots. cross-country ski footwear and snowboard boots 640319 Footwear with outer soles of rubber.gov. and uppers of textile materials 640411 Sports footwear. plastic. swim wear not knitted 621111 Swimwear for men or boys. plastic. knitted 61123100 of synthetic fibres 611239 Men's/boys’ swimwear of other textile materials.Description Sports Equipment 61122040 of synthetic fibres 61122050 of artificial fibres 61122090 Other fibres 611231 Men's/boys’ swimwear of synthetic fibres. gym shoes.in/ HS Code 79 . cross-country ski footwear & snowboard boots 64021210 of rubber 64021290 of other materials 640219 Other sports footwear with outer soles & upper of rubber/plastic 64021910 of rubber 64021990 Other 6403 Footwear with outer soles of rubber. not knitted 62111200 Swimwear for women or girls 621120 Ski suits. ski-suits.
• Mode 2: “Consumption Abroad” refers to the physical movement of the consumer of the service to the location where the service is provided and consumed. whether it be a member or not. Article XI: Payments and Transfers). In other words.Appendix B An Overview of GATS GATS. The clause on Transparency (Article III) requires each member country to publish all measures of general applications which pertain to or affect the operation of the Agreement. It is analogous to FDI in services. In Modes 1 and 2 the service supplier is not present within the territory of the member. which are negotiated undertakings particular to each GATS signatory. • Mode 3: “Commercial Presence” refers to the establishment of foreign affiliates and subsidiaries of foreign service companies. subject to review. partnerships. The GATS contains two sorts of provisions. electronic delivery of information and data among others. 80 . However. joint ventures. Most Favored Nation (MFN) and Transparency) and some only to scheduled specific commitments (for example. if a WTO member Country offers a certain privilege to any other country. in their initial commitments in the Uruguay Round. Under the MFN Treatment (Article II). services are traded in four different modes: • Mode 1: “Cross-Border Supply of Services” refers to the delivery of services across countries such as the cross-country movement of passengers and freight. • Mode 4: “Presence of Natural Persons” refers to natural persons who are themselves service suppliers. legally enforceable rules governing trade in services. Countries are also required to publish international agreements pertaining to or affecting trade in services. the Council of Trade in Services will have to be informed— at least annually—of the introduction of any new laws or any changes to existing laws. representative offices and branches. established in the Uruguay Round of WTO negotiations (1986-1994). while in Modes 3 and 4 the service supplier is present within the territory of the member. Under GATS. The second are specific commitments. The main aim of GATS is to progressively liberalise trade and investment in services through periodic rounds of negotiations. a member is obliged to provide to another Member treatment which is no less favorable than that which it provides to any other country. regulations and administrative guidelines. is the first ever set of multilateral. it has to extend the same treatment to all WTO member countries). as well as natural persons who are employees of service suppliers temporarily present in the other member’s market to provide services. some of which apply to all service sectors (for example. GATS allowed member countries to undertake exemptions to this clause. The first are general obligations. whether a member or not (that is. WTO member countries can make requests regarding specific information which the concerned country will have to provide promptly.
Thus. It is possible for countries not to grant full market access and deny national treatment by putting limitations and conditions on market access and conditions and qualifications on national treatment in particular sectors/sub-sectors. member countries negotiate and undertake commitments to liberalize market access and/or national treatment in specific sectors in what is known as Sectoral Schedule of Commitments and across all or several sectors in the Horizontal Schedule of Commitments. For each mode a country can impose two types of restrictions (limitations): market access and/or national treatment. qualifications and standards applicable to services. then it is said to have kept the sector/mode “Unbound”. if any. It is expected that successive rounds of negotiations will secure further liberalization by adding more sectors to a country’s schedule and removing limitations and qualifications. It follows a positive list approach which indicates that there is no a priori exclusion of any service sector and that countries are free to choose the service sectors/sub-sectors and modes within those sectors/sub-sectors for scheduling commitments. 81 .The GATS aims to progressively liberalise service trade under the four modes of service supply. A national treatment restriction exists when foreign services or service providers are allowed to enter the market but are treated less favorably than domestic service providers. A country is said to have made “Partial” commitment if the commitment is subject to some restrictions on market access or national treatment. The GATS covers all services except those supplied in the exercise of government authority. A country is said to have imposed a market access restriction if it does not allow (or partially allows with some restrictions) foreign service providers to enter and operate in domestic market. During the successive rounds of negotiations. It is also possible for countries to make commitments which are outside the scope of market access and national treatment as defined in the GATS. In its schedule a country is said to have made a “Full” commitment in a particular mode/sector if there are no restrictions on market access or national treatment. This provides scope for making commitments in such regulatory areas as licensing. in sectors/sub-sectors already in the schedule. Both the sectoral and horizontal schedules have to be read together to understand the extent and nature of commitments undertaken in a particular sector. This is done mode-wise for each sector/subsector. If a country does not make any commitment to liberalize a particular sector or mode of supply and retains the right to impose restrictions in the future. market access and national treatment are negotiated obligations. These are called Additional Commitments (Article XVIII). This is done by recording such limitations and qualifications in the commitment schedules under market access and national treatment columns.
shop-in shop. Nike. Adidas Cosco.S. etc. • Traditional retail outlets like toys and games shops. exclusive sports merchandise shops. Lotto. Largely Domestic Cosco. Puma. Tracer Foreign Reebok. etc. • Modern retail outlets like department stores. 82 • Traditional retail outlets like toys and games shops.S. • Traditional retail outlets like toys and games shops. S. •A small proportion is locally manufactured • Largely Domestic: • Traditional retail outlets like toys and games . E. Nivia Sports. their Procurement and Modes of Retailing Selected Sports and Some of the Related Sports Equipments Cricket Bat Some Popular Brands (Indian/Foreign) Equipment Procurement (Domestic/ Imported) Largely Domestic Modes of Retailing Indian BDM. Shoes Lawn Tennis Lawn Tennis Racket Lawn Tennis Ball Dunlop. Cosco. Topflight Cosco.G.. Largely Domestic Adidas. Reebok. exclusive sports merchandise shops. • Modern retail outlets like department stores. etc. Nivia Sports Shoes Football Ball Victor Football E. etc. Reebok.S. Yonex. Head Dunlop.S. Spartan. • Modern retail outlets like department stores. factory outlets. Golf Golf Kits Vicky Golf Sticks Exercise Sport/Fitness Dunlop VX Fitness. Babolat Wilson. etc.. Head Cosco. Nike. Nike Adidas. multi-brand outlets exclusive brand outlets. etc. • Largely • Multi-brand modern imported retail outlets. factory outlets. S. Yonex. etc. multi-brand outlets exclusive brand outlets.S. Nivia Sports Callaway. shop-in shop. Adidas. exclusive brand outlets. Topflight. multi-brand outlets exclusive brand outlets. Precor. Nivia Sports Wilson.Appendix C Table C1: Popular Brands. exclusive sports merchandise shops. shop-in shop. factory outlets. Callaway. Nike Adidas.
shops. skipping like department stores. Stex. Triton Light-weight. Aerofit . etc. Largely Domestic Skates Disney. exclusive sports merchandise shops. etc. Viva • Traditional retail outlets like toys and games shops. Viva (manufact urers not retailers) Swimming Trendy Sports Speedo. exclusive brand outlets. Kettler. um machinery: • Non-store format: TeleLargely Shopping. • Traditional retail outlets like toys and games shops. the survey Precor. exclusive brand outlets. LifeFitness. etc. exclusive sports merchandise shops. • Modern retail outlets like department stores. Navjit Hockey Sticks Lancer. etc. etc. exclusive sports cheap merchandise shops. etc. Roller Skating Yonker Speed Racer. ropes exclusive brand outlets. equipment like • Modern retail outlets mats.Sport/Fitness Activities Fitness. • Fitness/gymnasi etc. direct Imported shopping No imported Largely Domestic • Traditional retail outlets like sports merchandise brands were shops. Aquafit. • Modern retail outlets like department stores. toys and games mentioned in shops. Puma Largely Domestic Source: Compiled by the authors 83 .
0 29.5 8.5 1.0 3.0 100 Table D4 : Sample Distribution by Occupation Occupation Middle/Senior Officer/Executive Junior Officer/Executive Supervisory Level Clerical Salesman Self-Employed Professionals Entrepreneurs (Employees >10) Entrepreneurs (Employees <10) Entrepreneurs (Employees None) Shop Owner Petty Trader Home Makers/Housewives Students Any Other (Private Service etc.0 17.0 1.0 6.5 2.Appendix D Table D1 : Sample Distribution by Gender Gender Male Female Total Number 166 34 200 Per cent Share 83.) Total Number 40 58 13 3 4 20 10 12 2 12 1 5 17 3 200 84 Per cent Share 20.0 49.5 38.0 2.5 2.5 1.0 100 Table D2 : Sample Distribution by Gender Age Group (in Years) 19-22 23-30 31-60 Above 60 Total Number 14 98 84 4 200 Per cent Share 7.0 100 Table D3 : Sample Distribution by Educational Qualification Qualification Schooling (SSC/HSC) Graduate Post Graduate Any Other Total Number 6 7 111 76 200 Per cent Share 3.0 6.0 0.0 42.5 55.0 10.0 6.5 100 .0 5.
5 12 72.5 94 81 62 100 85 .Table D5 : Sample Distribution by Ownership Ownership Club Membership Two Wheeler Small Family Car Luxury Car LCD/Plasma TV DVD Player Debit Card Credit Card Total Number 12 170 131 24 145 188 162 124 200 Per cent Share 6 85 65.
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