Sports and clothing market trends in Turkey

Sports Shoes Turkey

Sports Shoes and Sports Clothing Market and Trends in Turkey

Brief History of Turkey

Turkey is an internationally recognized center for sports enthusiasm and participation. The interest in sports is culturally bound both historically and as an aspect of Turkey's general international cosmopolitan nature. This is especially true as a result of the modern emphasis on European involvement and a relatively open international but specifically western travel emphasis both to and from the nation. Aspects of western influence, but specifically UK influence are bound in the Turkish culture as a result of years of European and other allied assistance to overthrow what remained of the Ottoman Empire and collectively remove occupying forces from Greece from the nation. Turkey was in fact the only nation that negotiated a treaty with the Allied forces at the close of WWI and became independent of the old established government and encroaching allied powers as well as the short occupation of the nation by Greece.

An independent Turkey was born in the modern era, and European cooperation was the resulting national trend in government and business. As a mater of rational congress, individual and state sponsored cooperation was offered to European entities to facilitate profit and the export of goods that were thought essential to Europe and therefore Europeans and their traders were willing to pay well for. One clear example of this is the age old spice trade that could not reach Europe without some transgression across Ottoman lands.

To some degree the centralization of power also demanded the continued centralization of economic dominance, by the state, so these age old compromises and pacts that were the development of regional propriety began to be seen by the central government as in need of its own official stamp. So, as an extension of the egalitarian manner in which individual principalities and faiths were allowed relative independence the state created trade capitulations to further develop European trade control.

In the early modern period the Ottoman government did not conceive of such capitulations as treaties between equals. Rather, the Ottomans imagined the foreigners as members of a particular taife, or group, living within their polity. 15 Just as the state bestowed particular privileges upon religious, economic, and social clusters, so did it grant certain favors to subjects of foreign states; just as the state required from its subjects taxes and imposed upon them sumptuary conditions in return for these privileges, so did it demand from foreign merchants and envoys a surcharge upon goods traded and certain restrictions in residences and attire.

Eventually, these capitulations became strong incentive to enter into yet another power play for dominance. Additionally, these early capitulations and their later renewal with European nations and trade organizations led to diplomatic communication, which in turn led to a Europeanization of the republic of the old Ottoman guard and the later Republic of Turkey. To some degree this placed the empire in a position of equality with Europe.

In the climate of the competing interests of the Ottoman empire, there is a clear sense that the biggest challenges, they faced, outside of their own internal conflict was the competition of the European powers. The change from a militaristic society to one that was built on trade and technological development challenged the empire in that it created a competition system that the Ottomans were not pre4pared to meet. Though in the early days the empire had been strongly focused on intellectual and technological development, there is a clear sense that this goal got lost along the road, with social and political upheaval and the struggle for daily control and order.

In contrast to the early modern expansionist period of the Ottoman Empire, backed by its efficient military-bureaucratic structure, it was the inherent conservatism of the nineteenth-century regime which allowed the whole system to stagnate. The emphasis on tradition stifled the intellectual vibrancy that had characterised Islamic culture before the 1500s, and compromised its former military supremacy. All this was happening at a time when western Europe was developing rapidly. New advances in agriculture, in technology, in transport and in communications gave the West the ability to project its power beyond Europe. The Ottoman Empire did not develop a strong bourgeois class, beyond the old merchant elites, and there was therefore economic as well as intellectual stagnation. The conservatism of the privileged ruling elite in Constantinople, corrupt military leaders and the relative decline of the Ottoman economy compared with the industrial, commercial and financial 'take-off' of the West left the empire in a dilapidated state. Rising inflation, worsened by financial mismanagement, embezzlement of state revenue... any physical protest by the empire's impoverished subjects was met with severe repression since the army was the last institution, and a remarkably resilient one, to be able to uphold Turkish rule.... The provincial cavalry armies which had protected the frontiers of the empire were rendered obsolete by the Europeans' advances in musket technology

The development of a desire to modernize did occur and yet the empire was at a serious disadvantage, as the economy of the empire could not bear the burden of infrastructural and economic change and development. The desire to modernize, to some degree came to little and to late for the empire

To modernise, the Ottomans had to pay for the new technology. Yet their traditional exports in silks, textiles and spices were being rapidly undercut by robust European currencies, faster ships that could carry greater volumes of cheap goods, and mass produced textiles that were more cost-effective than hand-made fabrics. However, in the face of this new competition, the conservative leaders fell back on their faith in the 'inherent superiority' of Islam. In doing so they lost any effective power over the periphery of their empire, and, by the twentieth century, over Turkey itself.

Being that all these trade agreements and standards were in place during the Ottoman empire, and were in many ways agreeable and positive for the new independent state many of them retained their hold on the nation as principle after independence had been established and as a result of the negotiating influence of the WWI Allied powers. Turkey in fact is still ingrained in the development of a membership in the European Union and EU member states are Turkey's leading trade partners in the world, in all trades with a high level of Sports trade occurring between the EU and turkey.

Sports Enthusiasm in Turkey

The resulting, open door trade policy and the cultural influence of it resulted in the development of a strong sports culture, focusing emphatically on European style sports and enthusiasm in additional to traditional Turkish sports such as oil wrestling. The resulting collectivity and connectivity made Turkey into one of the regions most ardent manufacturing and trade centers, as if had been historically, but with a modern emphasis, which bleeds over into Turkey's relatively strong position in trades like sports memorabilia and gear, including athletic shoes and apparel.

Sports enthusiasm and infrastructure, was in fact a large part of the modernization of Turkey, under the reign of Ataturk and those modern rulers who followed.

In the modern world football (soccer) is the most popular sport in Turkey, with a large majority hold on the population who overwhelmingly support the competitive nature of the game and many aspects of trade supporting it. In fact the cultural and modernization revolutions stressed by Ataturk, as the first modern leader of post ottoman Turkey supported greater development of voluntary organizations, such as sports clubs and increased industrialization and trade modernity surrounding sports gear, including athletic shoes and clothing. This trend has only grown today as the modern Turkey boasts a large part of European and other international trade in shoes and apparel, a large part of which is focused on casual and athletic apparel and gear. Turkey is in fact 11th among the top players in athletic shoe manufacture and retail, much of which is marketed locally and in the Americas and in Eastern and Western Europe.

Turkish sports enthusiasm can be categorized into three main groups, while they are certainly not mutually exclusive; football/soccer enthusiasts (Turkey has a growing influence over the European football associations and is increasingly involved in competition between all the leagues of Europe oil wrestling (traditional Turkish sport) enthusiasts and lastly those who are involved in water sports and other outdoorsy sports offerings. Though there are many other sports followed by and participated in by Turkish nationals and tourists alike, with the major state emphasis being on Olympic sports this very simple diagram shows the predominance of sports as a pastime and personal activity in the nation.

As one can see from the above diagraph football is by far the most popular sport in the nation, and it is supported by many trade and business outlets, a great many of which are franchised from the U.S. And Europe (supported by Chinese and other manufacturers), with a few essential national brands. The same can be said of all sports in Turkey, yet football seems to hold the greatest attention from the consuming public, with the most sales being associated with football shoes and other gear. Turkey, clearly has a proud and longstanding history with sports and sports enthusiasm. Sports, as a cultural access point in fact is written into the Turkish constitution, as an aspect of cultural and personal growth goals for the entire nation.

Turkey is one of the rare countries in the world which has an article related to sports in her Constitution. Article 59 of the Constitution says, "The State takes measures to develop the physical and mental health of Turkish citizens of all ages and encourages the spread of sports among the masses. The State protects successful athletes." In recent years, with investments made in the field of sports, scientific research and the increase in importance placed by the State on sports policy, sports in Turkey became a well-liked and interesting event both as a performance sport and for the utilization of free time. Activities are continuing for sports, which became an essential passion and a way of life in the developed countries of the world, to take the place it deserves in Turkey just before the twenty-first century as an important social activity. With this objective, sports engaged in by the masses are encouraged, that is one of the basic components of raising a physically and mentally healthy society, the concentration is being directed at all the areas of Olympic sports rather than on a single branch, the predominance of the state is being decreased while the contribution of the private sector is increased and measures are being taken for the rational utilization of the facilities.

Galatasaray Football (Soccer) Team celebrating the UEFA cup Championship in 1999-2000 season

The current trend in Turkey, supported by the state is for the development of competitive athletes, in both team and individual Olympic sports. Traditional state support and massive individual sports enthusiasm has also led to a significant number of private clubs and organizations, supporting football/soccer and other sports. This participation begins with the very young and continues to a professional adult competitive level and is highly ingrained in the culture of the nation.

Sport in Turkey is being encouraged and supported by the state and sports clubs are given financial aid. The main targets of the sports policy of the state are to increase the number of athletes, to attain superior successes at international sports competitions, to prepare suitable sports environment for encouraging and providing for every individual at every age to engage in sports activities. Large sports facilities and investments in Turkey are realized by the state to a great extent. However, an important increase in the number of sports facilities of sports clubs and private organizations can be mentioned with the start of the development of the perception of sponsorship and marketing of sports in recent years. Of the total 2,574 sport facilities in Turkey, 261 belong to the private sector.

State supported events and clubs pepper the nation, in addition to private clubs, which often receive support and sponsorship from the state authority, the highest of which is the Directorate General of Youth and Sports, a subsidiary annexed to the Prime Ministry.

The Directorate General, which was established in 1938, has provincial directorates that perform its services in 81 provinces. A total of 6,499 personnel are working for the central and provincial organization of the Directorate General. Referees, provincial representatives, coaches, observers, etc. also undertake voluntary duties at the organization.

Again the stress of the state officiated and supported programs is to support Olympic sports, while others are included as national interest in them waxes and wanes.

Within the structure of the Directorate General, there are, currently, 37 sports federations. These are Marksmanship and Hunting, Track and Field, Basketball, Horseback Riding, Bicycling, Boxing, Badminton, Ice Sports, Billiards, Bridge, Gymnastics, Mountaineering, Fencing, Wrestling, Golf, Weightlifting, Handball, Scouting, Judo, Karate, Skiing, Rowing, Table Tennis, Archery, Automobile Sports, Underwater and Water Skiing, Chess, Tennis, Taekwon-do, Volleyball, Body building, Swimming, Sailing, Handicapped, Universities, Traditional Sports Branches and Sports-for-All. The Turkish Soccer Federation became autonomous in 1992. Furthermore, certain sports are performed within the structure of sports clubs or by citizens in spite of there not being federations for these sports in Turkey.

The national and regional governments are highly involved in the development of sports in Turkey and in fact the goals and standards of the sports programs in Turkey are decided on and developed annually by the Prime Minister in the form of Sports Education Plans, at the bequest of needs and requests coming from national and provincial Directorates of Youth and Sports as well as other leaders and stakeholders in the sports systems, both private and public.

The most important goal of the Directorate General of Youth and Sports is to provide that citizens of all ages engage in sports for the development of their physical and mental health. Furthermore, handicapped citizens are supported and encouraged by the state to engage in sports and to participate in sports activities.

The most important organization providing services in the field of sports, other than the Directorate General of Youth and Sports, is the Turkish National Olympic Committee. Furthermore, the Confederation of Turkish Amateur Sports Clubs, and numerous associations and foundations are among voluntary sports organizations.

A profile of sports clubs information states that the organizations both private and public stress mass participation in sports, on the fields and in the seats for the sake of personal and cultural development. "The perception of mass sports and widespread sports is accepted as the most important component for the development of competitive sports in Turkey."

Those who are engaged in performance sports in Turkey participate in the sports activities within the structure of the 6,169 Sports Clubs. Galatasaray, Fenerbahce, Be-ikta?, Efes Pilsen, ulker, Eczac-ba?

, Vak-fbank, Tofa?, Enka, Neta? And Arcelik are among the major Sports Clubs. A great majority of the sports clubs concentrate on soccer. Furthermore, there are individually licensed athletes who do not belong to any sports club and engage in sports and participate in competitions. The number of licensed sportsmen in Turkey is 176.906.

The statistic shared above is actually a very old statistic as the current, 2008 information offered by the Directorate General of Youth and Sports at the opening of the Beijing summer Olympics noted that the actual number of licensed sportsmen is about 2.5 million and climbing.

Pointing to Turkey's extremely young population, Atalay [Youth and Sports General Director 2008] said: "We have diversified our numbers of licensed athletes, bringing the number up to 2.5 million from around 400,000. But when you look at the general panorama in terms of our population, we still have a ways to go. Our goal is to have 10 million licensed athletes in the next decade. In fact, in a nation of 70 million, with more than half of being youth, this number should reach 20 or 30 million. When we reach these numbers, we will take our place as one of the top five nations in the Olympic Games and we will come away with the most medals of any nation."

The national sports demographic is in fact diverse and growing daily, in turkey, which is essential to growth in marketing and support of retail sports industry outlets, of which there are many. For the most part Turkey, among all the nations in the region simply has a feeling of "sports" in the air.

Table 2 Sportsmen According to Their Branches 2006

Branches Sportsman Referee Honorary Trainer Permanent Trainer in Staff

Marksmanship

Athleticism

Badminton

Basketball

Billiards

Bicycle

Bridge

Gymnastics

Mountaineering

Disabled

Wrestling

4(contracted)

Handball

1(contracted) permanent

Sports for everybody

Scout craft

Judo

Karate

Archery

Motor Sports

Chess

Underwater Sports

Tae kwon do

Tennis

Volleyball

Body Building

Sailing

Swimming

Folk dancing

Martial arts

Canoe-Rafting

Ski and Sliding

Traditional Sports

Oiled wrestling

Football

Grass Hockey

LAM

Sports Shoes Market in Turkey

The sport shoe and apparel industry in Turkey is increasing in size and opportunity, sports are both literally and figuratively in the air in this nation. Turkey has a traditional, relatively strong foothold on the sports shoe industry, in the are of manufacture but has also been recognized by national and international brands as an emerging potentially exponential market. The number of participants in sports increases yearly, as is seen by the growth of the number of licensed sportsmen in the nation and the emphasis of the state and the culture on sports as an excellent social and cultural personal development tool. Sports clothing, in the form of sports participation and marketing is also an essential aspect of the market in Turkey.

Turkey, as a traditional shoe and athletic shoe manufacturing nation, has been traditionally in full force as the leader in domestic shoe sales in the nation. Yet, this trend is being replaced by active franchisees and multinational corporations, who are globalizing into this ripe market. The fundamentally strong nature of the manufacturing segment in Turkey could lead to greater ability of these large corporations to build and sell in the Turkish domestic market, as well as to import shoes from manufacturing locations all over the world. Currently the trend in Turkey is disturbing for the domestic Turkish market as domestic sales are being eclipsed by international market entrants. Yet, this trend is a powerful incentive to get into the market as quickly as possible, before it matures to new globalized standards, and while Turkey's number of sportsmen continues to grow, exponentially in every popular sport genre.

Nike and internationally recognized U.S. brand, with Nike only and multi-branded locations, according to the Turkish-U.S. business council has an exclusive Turkey Division office headquarters, associated with manufacture and sales in Turkey as well as 49 Nike only locations and 300 multi-brand location in Turkey. Adidas, another leader (German) in sports shoes and apparel has 16 Adidas only and multi-brand outlets carrying Adidas gear in four major metropolitan areas in Turkey. It is also important to note that Adidas recently purchased rival Reebok's distribution rights in Turkey, and will likely expand resulting from this shift, following the 2006 merger between the two companies.

Trends and Opportunities

The overall trend in the sports apparel and shoe industry in Turkey is continued emphasis on the strength of football/soccer enthusiasm and participation as well as continued diversification into other sports. Basketball, Volleyball, Golf, Skiing, and tennis will all continue to make strides in the number of licensed sportsmen/women as well as in participation. One interesting thought might also be the development of tourist sports such as skiing, is that many people who travel do not desire to take bulky gear with them on long flights or ocean voyages and therefore may seek out opportunities to purchase or rent gear that then demands marketed skill to provide. This is also true of golf, while domestic sports retail will also continue to grow in Turkey and globalization of marketing will continue to be the trend, allowing foreign market competitors, with or without Turkish manufacturing to sell in the nation. Multi-branding anf franchise opportunities will also likely continue to be good options for investors as brands have become increasingly dependant upon franchise joint venture investment to grow in numbers and brand recognition and to provide products for new and traditional retail markets that serve the consumer with many brand options for both the casual and serious sportsman. State investment in sports participation and enthusiasm also drives the general feeling of Turkey as a nation that is above all sports friendly and supportive of athletic endeavors, including sponsorship and resource allocation for gear. This aspect of the culture will drive diversification in the market as well as international brand recognition and therefore demand for recognized and/or presupposed leader products in the market. Finally, with international and national infrastructural growth of the internet Turkey will likely emerge as a leader in online shopping for athletic merchandise, making brand recognition and local expansion of retail stores essential to further growth.

Market Demand

Market Demand in Turkey will likely remain very high and grow in the future. The current climate of globalization will change the shopping experience in Turkey and lead to more diversified alternatives and products, across the board, but especially in athletic apparel and marketing opportunities. Sports, marketing even when it is not associated with sports events is a hot button reality in Turkey, as the nationalistic pride and broad acceptance of sports as a cultural necessity drives imagery and standards. As one can see from the short table, below there is plenty of room for growth in the Turkish sports gear market. Emphasis on multi-branding and traditional franchise markets will likely continue, as larger brands edge out the domestic market and new mulit-national chains such as Footlocker (1 Turkey outlet in Istanbul) and Athletes' Foot (0 current locations in Turkey) seek to gain a hold of possible market locations for multi-brand sales.

Broad information on sporting apparel, cross over stores is not available for Turkey in every area, but the above chart includes sport and shoe sales locations that seel shoes and apparel. In Turkey, for the most part exclusive shoe stores do not sell athletic shoes, but sell high quality men's and women's designer dress and casual shoes, while multi-sport retail outlets sell athletic shoes. Performance shoes and apparel are available together in this market, while sports marketing apparel is available almost anywhere that casual clothing is sold. The domestic clothing market is dominant, as apposed to the athletic shoe market where global inroads are being made

Table 5: Sports Clotihng and Sports Shoes Distribution Channels in Turkey from 1998 to 2008 Market Size and market development forecast up to 2015

Table 6: Market sizes (%, and in USD) for sports shoes

Table 6 & Table 7: Market sizes (%, and in USD) for sports clothing sales

Worldwide sales of sports equipment, apparel, and footwear increased a healthy 4% to $278.4 billion (185.6 billion euros) in 2007, even as the U.S. share of the market decreased from 40% to 36%, according to a new report from the NPD Group."

07 Sporting Goods Sales Up 3.0%; Sports Apparel Market Up 2.4%

In '07, total manufacturers' sales (in wholesale dollars) for the sporting goods and fitness industry in the U.S. grew at an annual rate of 3%. While down from higher growth rates in '05 (6.8%) and '06 (5.8%), the sporting goods industry has continued its streak of outperforming GDP for non-durable goods, which was 2.2% -- according to the U.S. government in '07. The sporting goods industry also saw stability in the sports apparel, fitness equipment and team sports markets. The following chart lists a breakdown of the sports apparel market for '07, according to U.S. wholesale value of annual manufacturers' shipments, with comparisons to '06 (SGMA)."

MANUFACTURER SALES of SPORTS APPAREL

CATEGORY '07 (MILLIONS) '06 (MILLIONS) % +/-

TOTAL BRANDED ATHLETIC APPAREL $14,682 $14,454 1.6%

Outerwear

Fleece/Sweat

Warm-ups

Shirts/Tops

Pants

Shorts/Skirts

Dresses

Underwear

Swimwear

Caps/Hats

Socks

Sports Bras

Accessories

TOTAL PERFORMANCE APPAREL $1,225 $1,185 3.4% s

Base Layer

TOTAL FITNESS APPAREL $314 $300 4.7% s

TOTAL BRANDED ACTIVEWEAR $12,154 $11,800 3.0%

TOTAL BRANDED ATHLETIC

ACTIVE APPAREL $28,374 $27,739 2.3%

TOTAL TEAM UNIFORMS $1,127 $1,083 4.1%

Football

Basketball

Soccer

Baseball

Volleyball

TOTAL SPORTS APPAREL $29,502 $28,822 2.4%

Table 8: Product Categories by Sport in Turkey's Sports Clothing and Sports Shoes Market

Prospective Buyers

Prospective buyers for sports shoes and products in Turkey run the gambit of consumers with youth and tourists being more interested in purchasing sports gear and others seeking sports memorabilia or marketing gear. The culture of sports in Turkey will likely keep the market broad, under these terms for many years to come.

Competition Market Issues and Obstacles Import Tariffs and Taxes on Sports Clothing and Sports Shoes

Sports shoe and apparel competition, currently lies among the larger providers but mainly from domestic Turkish manufacturers with retail outlets in Turkey in established retail locations. Super store, franchise multi-brand sales are likely to do the best if introduced into the current market. Taxes and tarrifs will also limit import sales as such issues often do, and as the pressures upon communities grow as a result of globalization, potential lost jobs and domestic sales these restrictions may increase, as has been seen in other markets. The U.S. currently has no free trade agreement with Turkey, unlike the EU states who enjoy the benefits of Turkey's desired membership into the EU states.

Taxes and Other Import Fees

The tax system in Turkey is currently in a period of flux as the system is revamped to meet the demands of EU membership. This makes it very important to deal with and assess tax issues on a frequent basis, as business owner. Employing a local tax accountant and/or assessor with current knowledge of the local system, is essential to success as is understanding fully through broker representation what tariffs will be assessed what products and when such is expected to be paid.

Market Entry

The most effective way to enter the Turkish market in shoes and sports apparel would be to invest in a franchise that sells a multi-brand unit system, a big box sports store of sorts. Though other alternatives exist such as street fairs, outdoor markets, trade fairs and the like such events tend to be focused on local and domestic market sales and businesses, while new westernized shopping centers cater to foreign business. A full country and regional market analysis is essential as is zoning prices and products to the specific area of entry. Local distributors may more aggressively seek international franchise and multi-brand investment in the near future, but are currently seeking foreign or export sales, and retain their own market share of retail sales, where such already exists. International distributors, especially China and India are also always seeking distribution points in emerging markets, such as Turkey. Marketing on television is aggressive and competitive in Turkey as many regions see excessive advertisements involving sports imagery, regardless of the nature of the actual product, for this reason brand development through print and public ads are essential to success of any nature.

Conclusion

Turkey has a diverse population who all seem to be interest in sports with a highly effective state supported sports system, both private and public. All people in Turkey and subsequently Turkey's visitors feel the sports vibe when they visit the nation and the result is an active and potentially exponential emerging global market for sports shoes and apparel. Currently the transitions that are occurring in the nation to attempt to come into line with EU membership are altering the manner in which business has been done traditionally in Turkey as are other globalizing factors in business. The large sports companies are already jumping on the Turkey bandwagon and entrants must seek similar models, such as multi-branding franchise opportunities to enter the market in the modernized westernized centers. Competition between domestic and international players will likely intensify over the next few years and could cause a backlash, but currently the iron is hot for investing in and entering the market in Turkey in this niche.