ASIA’S PHYSICAL ACTIVITY ECONOMY

In recent years Asia Pacific's physical activity market has grown rapidly and is set to lead the rest of the world in the value of this sector. The Global Wellness Institute estimated the value of Asia’s physical activity economy – which comprises of not just sports activities, but the enablers of sports i.e. sportswear, equipment and technology – was worth $240 billion in 2018 and the businesses of these enablers have grown even larger due to increases in participation rates and the recent pandemic. Asia’s physical activity economy was worth around 30% of the world market. The $240 billion was divided almost 50-50 into recreational physical activities and the sportswear, equipment and technology sectors.

However, Asia’s sports industry will only continue growing bigger. Asia is expected to overtake the North American market (the only region bigger than it at the moment) as early as 2023 to be the world’s largest physical activity market. By 2023, the Asian market is projected to grow 9.2% annually and reach $373 billion in value. In the same time period Asia-Pacific will be accounting for 40% of the entire world’s themselves will drive almost one-third of the world’s growth. market growth. Most of this growth can be attributed to China and India, who by themselves will drive almost one-third of the world’s growth.

ASIA’S LARGEST RECREATIONAL PHYSICAL ACTIVITY MARKETS

Asia’s recreational physical activity market is led by China, with a market valued at $109.3 billion and second globally only to the USA. However, four of the top ten and six of the top twenty largest markets worldwide hail from the Asia-Pacific, according to Global Wellness Institute. Notably, Japan is third worldwide with a $43.9 billion market. Even relatively small regions like Singapore and Hong Kong’s recreational physical activity markets perform admirably on the world stage.

Along with Hong Kong and Singapore, the top six Asian markets (who are all in the top 20 physical activity markets in the world) have highly developed physical activity markets. These mature markets have more intense competition between more established players. Their growth has also been driven by the active participation of their governments, who promote physical activity through public education programs. Some examples are South Korea’s Program 7330 and Singapore’s Active Health program. China itself has been experiencing explosive growth because of its government’s support through sports policies, the proliferation of gyms and fitness studios in it's Tier 1 cities, and the widespread adoption of fitness apps and online platforms.

On the other hand, Southeast Asian countries (even Indonesia and Thailand, who are in Asia’s top 10 physical activity markets) generally have smaller markets, lower levels of participation and Asia’s lowest participation rate for the fitness industry. This indicates that there is plenty of room for growth in the region.

ASIA’S UNDERDEVELOPED SPORTS EVENTS INDUSTRY

Despite the significant growth that can be seen in the remainder of Asia’s sports industry, there is still a segment within Asia that is at a less mature state. This is Asia’s sports events industry, which despite having 51.2% of the world’s share of sports events users, only accounts for 17.2% of its sports events revenues. One key issue is the low level of average revenue per user, or ARPU, in Asia. According to Statista, Asia’s ARPU is still at $28, or one-third of the worldwide average of $84. If Asia’s ARPU increases to the worldwide average, its industry can expand from jus $1.65 billion now to $4.95 billion!

TRENDS IN THE ASIA-PACIFIC (APAC) SPORTS MEDIA MARKET

In 11 key APAC markets (Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore and Thailand), Rapid TV News claims that aggregate sports media revenues are expected to grow at a 6.7% CAGR from 2019 and reach $7.2 billion by 2024. Sports TV revenues are expected to remain flat and reach $4.3 billion 2024, while over-the-top (OTT) providers are projected to experience immense growth and reach $2.9 billion by 2024 after growing at a CAGR of 22% from 2019. Furthermore, OTT platforms are predicted to almost double its share of sports media revenues from 21% in 2019 to 40% in 2024, while simultaneously doubling its share of sports media monetization outside of China from 12% to 23% in 2024.

Regionally, sports rights investments in China, India, Australia and Japan are being driven by a strong domestic sports ecosystem while being supported by premium international rights for football, basketball and baseball. In 2019, football had the largest share of rights value in APAC by sport, with 28%, and the Premier League was APAC’s top property by media rights value with a value of over $600 billion.

SPORTS TECH IN ASIA PACIFIC TO DOMINATE GLOBALLY

The market of sports technology worldwide has been growing at an immense rate and was valued at $9.8 billion in 2018 by Grand View Research. They projected global sports tech too grow at a CAGR of 20.3% from 2019 to 2025. Impressively, by 2025, Asia-Pacific itself is projected to exceed the market’s global value back in 2018. APAC is projected to register a CAGR of 23% from 2019 to 2025 to eventually reach $10.8 billion.

There are various core drivers behind growth of such magnitude, including three key catalysts. Firstly, the considerable renovations in sports stadiums worldwide and the rapidly increasing construction of smart stadiums due to rising investments in sports. Smart stadiums are being built to offer more complete experiences around events with improved efficiency and security, along with the addition of stadium apps to engage users. Secondly, the significant growth of wearables due to rising athlete adoption and better technology for data collection and management. This is especially true as the industry transitions to a more data-driven sports culture with fitness tracking improving training and in-game decisions. Thirdly, major sports events are being held in APAC, despite postponements from the COVID-19 pandemic. Events like the Tokyo 2021 Olympics and the Beijing Winter 2022 Olympics provided massive boosts to sports investment and enabled innovation in technology.

Several factors that may restrain growth however, include the high initial investment needed, the potentially long timeframe for return on technology investments, a rising risk of technology glitches, as well as complexities in replacing and upgrading incumbent systems.

ASIA’S ESPORTS BOOMING ECONOMY

Another area where Asia Pacific has a dominant position globally is esports and continues to grow led by an expanding user base, game publisher and government support of the industry in many countries. China leads all markets with revenues esports industry increasing 25% year on year in 2019, raking in 117.53 billion yuan from PC client esports games, mobile esports games, as well as offline events, esports live streaming and sponsorship. The market is projected to reach140.57 billion yuan in 2020 and 165.14 billion yuan in 2021.

Revenues from esports tournaments and live streaming, will be the main propellant of the market’s growth. Esports ecosystem revenue surged more than 60% year on year in 2019, and is predicted to jump 41.1% year on year in 2020 to reach 40.91 billion yuan, constituting close to 30% of the market’s total revenue.

Mobile esports games’ revenues will increase at a much lower rate of 16.8% in 2020 compared to 2019, but will still remain the largest segment, accounting for 46.1% of all revenue generated by the market.

While the revenue from PC games is also projected to increase at a steady rate, it has and will continue to account for a smaller share of the market. By the end of 2020, PC esports games will likely comprise only a quarter of China’s esports market revenue. In comparison, in 2017, the percentage was 42.7%.

According to the report, the number of esports players and viewers will also expand to around 520 million by 2020, growing 10.3% year on year, with female users driving the increase. While females only comprise less than one-fifth of all esports players and viewers in China, they will make up 36% of all users by the end 2020.

And the growth is not limited to China with Southeast Asia leading the way globally with developments in mobile gaming and Japan’s industry growing with the recognition of esports as an industry and a potential career.

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