Sporting Goods Business in Central Europe

There are a number of different options available to sporting goods or sports clothing companies when it comes to doing business in Central Europe (CE); larger companies tend to choose wholesalers which can also be called sole distributors or general agents. For branded goods, this is perhaps the only sensible option as they require a certain level of brand promotion as well as the after sales service for their customers. Wholesalers act as an important middleman because they can then sell clothing and other goods on to not only big department stores but also independent retailers.

Furthermore, big retailing chains of sporting goods can also be accessed by the wholesalers which means that the goods are reaching their maximum possible audience. Store chains often tend to do much of the importing themselves but that doesn't mean they don't also use wholesalers; even the voluntary chains operate in the same way. If a product is sold to retailers directly, they are normally unbranded or a relatively unknown brand.

How the CE Market Operates

Some retail chains will design their own products to stock in their stores but this never really reaches further than clothing and simple accessories. It is also important to note that mail order companies very rarely use wholesalers but prefer to buy directly. When it comes to international markets, companies very much like to keep the processes ‘in-house’ which means that they import from their own factories. They do sometimes accept products from different countries and set up a CMT contract but they mostly act in their own markets and use products sewn/finished at home. An exporter interested in doing CMT work for these companies should contact the head offices. Some manufacturers import garments that have been sewn abroad under a CMT type contract.

Using a partner such as a commission agent is another option for exporters of sporting goods although these are becoming harder to find due to a decline in the amount of commission agents specialising in the sports business across Central Europe. Most commission agents would prefer to work with well-known brands as it takes away the risk element of developing products that match up with the requirements of each Central European country. Commission agents tend not to sell to manufacturers or wholesalers but instead, department stores and sometimes even mail order companies.

There can be a number of different people involved in the design process for sporting goods and sporting apparel including the direct importing retail chains, wholesalers, and mail order companies. The manufacturer will always have the biggest impact on this process but the help they receive from their partner in Central Europe is seen as vital. They will help with the overall development as they are tucked away in another part of the world and don't necessarily know the needs of the individual markets unlike their local partner.

There is no real ‘best’ option for a business partner or typical route to market for a sporting goods manufacturer as it depends on a number of factors including what the product is, the price range, the fashion appeal, how well the brand is known along with other things to consider. Some manufacturers who are trying to enter a market with a lesser-known brand choose to work with other manufacturers who already have a foothold in the market. For example, manufacturers from the Far East like to sell their products under American or European brand names because it is the easiest way into the market. In return, the American and European countries find that OEM manufacturing (Original Equipment Manufacturer) offers advantages such as lower labour costs, so they often choose to off shore this process, normally to low wage countries which include many countries in the Far East.

Products that are simpler with a lower price tend to be easier to get into the market as there are more partner options to enter the CE market. Firstly, one option would be to go through established wholesalers or even direct to larger retail chains. If the products are cheaper versions of more well-known products, they may struggle to take hold in the higher-end CE countries but would fare better in lower-end Central Eastern European (CEE) countries.

Specialist sporting goods retail outlets offer a rewarding route to market, these outlets are the most important type for the market, but there is consolidation in this area. Of course, mail order companies and department stores are also important but do not have as much of an overall effect and tend not to be as profitable. It is important to note that many small independent sports stores are being pushed out of the market by the sheer increase in the amount of sporting goods chain stores across Central Europe.

Trade Shows

Germany is one of the biggest providers of trade shows for the sporting goods industry with market leading international expos such as Eurobike, ISPO, Fibo, the OutDoor Show as well as many more specialized exhibitions. With Germany hosting the majority of the leading international sporting goods trade fairs in Central Europe there are however notable events in CE countries such as Poland and the Czech Republic. It would be typical for a sporting goods company looking to target the whole of Central Europe to attend a German event with trade shows in other CE countries offering a more targeted route to that respective market.

Far East or American sporting goods manufactures tend to use international Expos as a way to find distributors. Once they are established, then their distributors will often take a more active role, either joining the manufacturer at the trade fair or representing them on their own.

How Do Consumers Buy?

The sports garments market can very much be separated in two depending on the time of year. For producers, there is a big delay in between when they have to send off and prepare their stock to when they hit the shelves for the consumers. For example, the winter stock normally hits the shelves anywhere between September/October when the weather starts to chill. However, the retailers have to purchase this stock and prepare for it in spring so that the deliveries come at the right time; some importers even start planning winter stock the year before. Mail order companies generally receive their stock a couple of months in advance so they can picture each garment for their catalogues.

When it comes to sports clothes, the market is similar in that importers tend to place orders for winter clothing at the beginning of summer. Again, this process begins two months earlier for mail order companies so they can prepare their seasonal catalogues. High fashion items are imported a little later than the generic ones as tastes can change extremely quickly and stores don't want to be holding the wrong stock.

Some items are ordered all year round like gym wear, although there may be a small change in design, cut and trim in order to adjust for the changing weather. Central Europe experiences significant changes in weather from summer to winter so the importing process is vital; if orders are delayed or they arrive late, the importer would normally cancel or request a discount because it will lead to stock they can’t shift until the following season. For example, a ski coat after New Year or a swimming costume after May is too late so will be difficult to sell.

Sporting goods follow a similar pattern although they are slightly less dependent on the weather and the changing seasons. Some sports may be more popular during different times of the year or even during big events like the World Cup or the Olympics, but they are less affected. Retailers normally order from retailers two seasons apart; for example, autumn for spring. Overseas manufacturers may receive the orders slightly later for the same time period.

Delivery times in the sports clothing, garment and goods industry is absolutely pivotal because retailers need to have the right stock for the time of year all year round. If a delivery comes late, retailers normally ask for a discount if they know the stock can be sold but if it can’t, it will be sent right back.

Summary

Central Europe is a big consumer for all sports goods and clothing and actually provides stiff competition for Western Europe. Many consumers in the CE countries choose to wear casual sports clothing on the weekend and after work as opposed to anything else which means that sales are high in comparison to better developed Western European countries. When it comes to choice of clothing, branding is very important to Central European buyers. There are many international manufacturers and retail chains that promote the big brand names with their hold on the market not looking like it will change any time soon.

Sporting goods suppliers new to the market do have a chance of success, but they will need to work with the right type of CE sporting goods business partners who will use their brand name to sell the products. Introducing completely new names in Central Europe is extremely tough because consumers are happy to choose brands they have heard of and have used before. Trade fairs can be utilised but these in no way guarantee results. Again, the same applies to sports goods. CeSport offers another route to market; our service includes researching specific markets based on our clients’ requirements. We use our databases and resources in the marketplace to identify targeted contacts such as distributors, agents, and retailers. We will additionally educate and inform you about the Ce Sports industry via a multi-language presentation on our website and digital publications that have highly targeted and fluid distribution in the CE region.

In contrast to a trade show that lasts for only a few days, we can effectively present your sports business as a 12-month ongoing trade show to potential trade partners in the Central European region. Our in-house research team will also qualify and filter enquiries, a service which saves our clients considerable time and energy.

Some companies make the mistake of thinking commercial agents have the power to introduce a new brand, but unfortunately this is not something that they can facilitate; this is why they are dwindling and those that survive are choosing to represent well-known brands. Mail order companies should be considered by anyone looking into entering the market, as a brand name isn't as significant when ordering online.

CeSport is the leading platform and business partner search company for sporting goods businesses to find partners in Central Europe we have over 500 new items and articles featured on our site which are open to view for companies interested in developing their business in the CE region if you would like your company featured then let us know by contacting us on twitter @cesporteu or search(at)cesport.eu ;You might also be interested in these articles;
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