The market for sport and outdoor products has shown solid growth over the last 10 years, and is forecasted to continue to develop positively in the coming 10 years as well.
At Thule Group, we are active in different markets and regions across the world. Although specific product categories and geographic areas can develop differently, we believe that the following fundamental trends will contribute to long-term growth in the outdoor and bags market:
- Increased consumer focus on active lives: As consumers’ disposable income has risen over time, we have seen increasing value allocated to sports and outdoor activities.
- Consumers are enjoying multiple activities: Consumers are more likely to engage in a variety of sports and outdoor activities than in the past – e.g. hiking one day, biking another and kayaking a third. This drives the need for consumers to be able to carry gear for multiple activities.
- Consumers are active longer: As consumers tend to be active at older ages, we have seen increases in sales among the 40+ age group. A group who enjoys sports and outdoor activities and who tends to have more disposable income to spend on high-quality, premium products.
- Parents want to continue enjoying their activities, even with their small kids: We have seen that the current generation of young parents increasingly want to maintain their active lives and keep in shape immediately after having their children. With busy lives, young parents want to share this experience with their kids, thereby driving the need for solutions that let them bring their kids along when exercising or getting out into nature.
- Consumers want to be connected at all times and share their experiences: With the ever-growing trend of interconnectivity and desire to share their favorite moments, consumers bring along their electronic devices during more activities, driving the need for solutions to transport and protect those devices.
- Consumers are increasingly aware of which brands and products they want: With the ability to search information that is readily and globally available, consumers either seek out the cheapest solution or brands that they can connect to and trust, and that offer product features and more options for their needs. This drives the trend towards globally leading brands that stand for strong values – always delivering high-quality products that are functionally smart, aesthetically pleasing and more high-end.
- Growing GDP and a related increasing consumer interest in sport and outdoor activities in developing economies: With increased income and ability to live active lives in emerging markets, a new consumer base is growing in countries such as Russia, Eastern Europe, and Latin America, and starting to establish itself in China and South East Asia.
We have been growing in this sector over the past few years and work extensively with a focus on organic growth to secure the necessary product portfolio and organizational structure to capture opportunities. In addition, we will continue to explore strategic add-on acquisitions in product categories we want to pursue. The most recent was in 2016, when Thule Group acquired the Dutch company GMG B.V., a leading manufacturer of child bike seats in the BeNeLux markets. The acquisition of GMG B.V. was a complement to the existing range of Thule RideAlong child bicycle seats and fit the strategy to grow in key category Active with Kids. The category has experienced strong growth through the recent launches of products like the Thule Glide jogging stroller and the Thule Sapling child carrier backpack. We also organically entered several new product categories, for example with products in the area of bike racks, bike pannier bags and bike transport cases, sport and travel bags, as well as technical backpacks.
Capitalizing on opportunities in the emerging markets of Russia, China, and Brazil, we also forged ahead through more focused efforts in these markets.
At Thule Group, we see a growing trend among major retailers to reduce their number of suppliers, relying more and more on key suppliers for product innovation and breadth, as well as supply chain and customer service. These retailers have begun demanding more from their partners in terms of timely delivery of goods, consumer service, inventory control, strong well-positioned brands, and consumer insights. Having worked closely with the world’s leading retailers, companies like Thule Group are better able to serve retail. And over the past few years our retail efforts – under the banner of the Thule Retail Partner program, with staff training, planogram reviews, and merchandizing programs – were further cemented for continued growth.