Can sportswear brands stay ahead as costs rise?
Chinese brands and changing consumer habits are testing established players.
Sportswear companies are under growing pressure to defend growth as higher costs, war, and more cautious consumer spending reshape the global market, according to Euromonitor International Ltd.
“Consumers will still spend, but will scrutinise the value of each purchase more closely,” it said in a July report. “Successful brands will need to justify higher prices through stronger propositions, whether technical performance, durability, or community.”
Global gross domestic product growth is projected at 2.9% this year, whilst inflation is forecast at 4.6%, with higher energy prices and disrupted trade flows adding to cost pressures across the apparel and footwear industry.
Sportswear brands face additional pressure because many performance textiles and synthetic fibres are made from crude oil.
Disruptions around the Strait of Hormuz due to the Iran war have raised material and logistics costs, forcing companies to balance margins against softer consumer demand.
At the same time, rising living costs are prompting shoppers to scrutinise purchases more closely, increasing the importance of product performance, durability, and community engagement.
Wellness is expected to remain a priority for higher-income consumers, creating opportunities beyond apparel through services, technology, and experience-led products.
Euromonitor said market volatility is accelerating mergers, acquisitions, and initial public offerings as companies pursue greater scale, stronger supply chains, diversification, and lower tariff exposure.
Recent deals include Gildan Activewear Inc.'s acquisition of Hanesbrands and Anta Sports Products Ltd.'s purchase of a 29% stake in Puma.
Meanwhile, Chinese brands are expanding globally by combining affordability, innovation, speed, and technology, Eromonitor said. It cited Bosideng International Holdings Ltd.'s collaboration with Kim Jones and Urban Revivo's overseas expansion as examples.
“This will intensify competition, pushing established international players to accelerate innovation cycles and strengthen digital engagement,” it added.
The Asia-Pacific region is forecast to be the fastest-growing sportswear market through 2030, whilst North America, Europe, the Middle East, and Africa will remain the biggest contributors to global value sales.
Outdoor activities, running, racket sports, and the continued rise of women's sports are expected to support demand.
Questions to ponder
- How can sportswear brands protect margins without weakening consumer demand?
- How will Chinese brands reshape global competition in sportswear over the next decade?
- Beyond apparel, where should sportswear companies invest to sustain growth?
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EXPERT OPINION
Sportswear brands will struggle if they rely on price increases alone. Shoppers are more selective, so brands need to give them a clear reason to pay more: better performance, durability, design or service. The strongest response is a mix of sharper product ranges, fewer weak styles, lower discounting and closer work with suppliers. Diversifying sourcing can reduce exposure to tariffs and disruptions, while better forecasting can limit excess stock and markdowns. Ralph Lauren’s approach offers a lesson: elevate the assortment and customer experience, then use targeted promotions rather than blanket discounts. That protects value perception while keeping margins under control.
Sportswear brands can protect margins by shifting from fashion-led products to functional apparel that delivers durability, comfort, and value. As consumers become increasingly value-conscious amid macroeconomic uncertainty, demand for functional apparel is projected to grow 74% by 2033, demonstrating that customers are willing to pay for quality rather than trends. This strategy has helped Uniqlo become one of the world's largest apparel retailers.
Meanwhile, Chinese firms such as Shein and Temu are reshaping competition through AI-driven demand forecasting and agile supply chains, enabling faster product launches, lower inventory risk, and significantly less unsold stock than traditional retailers.
To remain competitive, sportswear brands should invest beyond apparel in AI, digital supply chains, and data analytics. These technologies improve demand forecasting, shorten product development cycles, optimize inventory, and personalise customer experiences, allowing brands to compete on both operational efficiency and consumer value rather than price alone.