Many developed and developing nations have focused on sports as these are great enabler of equal opportunity and generate employment. In the US, sports account for 3% of the economy. China, too, has ramped up its focus on sports over the past few years. Globally, the sports market is estimated to be $700 billion. What opportunities does India offer?
Over the past two years of my entrepreneurial journey with Athletto, I had the opportunity to meet with many entrepreneurs, industry experts, investors and bureaucrats in the sports sector. They all agreed that the sector presented a tremendous growth opportunity in coming decades. However, they all differed in their estimation of the size of the market, which ranged from a few million dollars to tens of billions of dollars.
On probing these figures, I found almost no documented reports on the market size for sports grounds and their revenue potential. That is when we, at Athletto, decided to find out ourselves.
A report by management consulting firm KPMG pegs the global sports market between $600 billion and $700 billion. This is almost 1% of the global gross domestic product and greater than the GDP of 15 countries. Not only does this sector help improve the health and fitness of the people, it also uplifts the spirits of the masses and unites a diverse nation like India.
According to a 2014 report by AT Kearney, ‘Winning in the Business of Sports’, the sports industry can be divided into the following segments: sports events; sports apparel, equipment and footwear; sports clubs (fitness, health and sports training); infrastructure construction, food and beverage, and betting.
Of these, sports infrastructure is a recognised industry in India and is estimated at Rs 80,000 crore ($11.9 billion). The report added that the sports sponsorship market in the country grew approximately 12% year-on-year in 2015 to reach Rs 5,190 crore.
India's gold mine
However, a category that industry watchers skip over is leisure sports, which is an amalgamation of infrastructure development, sports events, marketing, retail and training. It operates on a pay-by-the-hour model and offers coaching and memberships to sports clubs. This segment presents an opportunity to make a sustainable and profitable business through technological intervention and digitisation.
In India, we have more than 15 lakh sports facilities, a number we would find difficult to believe. But yes, that's a fact! The market size for using sports grounds itself is northward of $20 billion in India.
Sports infrastructure in India can be categorised as privately owned, government owned, clubs/gymkhanas, schools, colleges, residential, and corporate. These grounds can be used for an array of sports-based activities including, corporate sports outings, team building activities and sports tournaments.
We at Athletto tried to figure out the patterns of play of Indians across various age groups, including how much they play and frequency of play. India has 710 million people in the age group of seven years to 40 years. From this segment, leisure sports can be aimed at over 200 million people.
Our focus is on recreational youth and adults. We observed youth between ages seven to 24 years play a minimum of one unique sport for 20 days per month. Recreational adults played six to eight days per month on an average, usually more than one sport mostly for their leisure and fitness purposes.
With the growing demand for facilities and sports infrastructure, what is needed is to bring the two together. The core problem that needs to be addressed is to ensure these facilities are accessible to the masses and that they are optimally utilised.
1. Making sports infrastructure usable and maintaining them for the purpose of sports. Some venues are used more for concerts, plays, or exhibitions rather than sports.
2. Standardising sports venues with minimum basic facilities like toilets and washrooms.
3. Digitising them and keeping it open to the public such that it is beneficial for all the stakeholders.
4. Introducing a pay-and-play policy with an online cashless booking facility that makes it convenient for the masses to do seamless online transactions. This provision is also in line with Prime Minister Narendra Modi's vision of a cashless society and Digital India.
Another problem, echoed by many, is the dearth of sports infrastructure, as most don’t see sports facilities around them. The main reason for this is most of these sports facilities are in the interior (streets and corners) and not on the high streets and main roads, unlike gyms, spas, salons, restaurants, etc.
One needs to expend a huge amount of effort to discover sports facilities and in the process of finding one, most people give up. Some people don’t even try looking for a facility because they assume there are none around them. Digitising sports infrastructure will solve this problem.
However, contrary to public opinion on the lack of sports infrastructure, from my experience at Bangalore in the past year, I have witnessed more than 100 new privately owned badminton courts and more than 25 new football turfs being opened for the public on a pay-and-play basis. We will see more and more sporting infrastructure being built as the returns from such sports venues are high, in the range of 60-90% a year, as compared to other investment opportunities which at best give 20-30% returns.
Ujwal Sutaria is co-founder of sports-tech startup Athletto, which helps people discover and book sports and fitness facilities, coaching services and players.
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