The sale of sports goods and equipment in Pimpri-Chinchwad has been constantly increasing at about 15 percent annually. However, traders believe that the difficult business environment and shrinking profit margins will deteriorate the growth to 5 percent in the region.
So far, the rising disposable incomes in fast emerging cities such as Pimpri-Chinchwad allowed people the liberty to spend on recreational and leisure activities such as sports.
As per Indian Council for Research on International Economic Relations, recreation consumption in India that includes expenditure on sports will rise about 8.9 percent a year from $1 billion in 2005 to $6 billion in 2025.
Most of this growth is dependent on how other sports, like football, hockey, lawn tennis and badminton, are developed like cricket.
Home Turf
Pooja Totla, owner of Shree Sports Company from Chinchwad said that though there is demand but the margins have lessened over the years.
"When I started off, getting a loan from a bank was difficult. Our profit margins after we started were around 30 percent and taxes were also lesser. Now, profit margins have depleted to just 5 to 10 percent dented with higher taxes," said Pooja who opened her shop about 25 years ago with an investment of around Rs 2.5 lakh.
Apart from this taxation issues, traders are also forced to stock branded items. Anil Kalra, partner in Shakti Sports based in Pimpri informed that branded items are in great demand. "People want value for their money they spend and there is a great awareness about brands. It is not that they want international brands but definitely good Indian brands," he said.
Kalra had invested around Rs 50 lakh back in the year 1998 that also included real estate costs. "If one has to start this business today the investment would be around Rs 3 crore. The cost increment is due to inflation and price hikes of items and land prices," he said.
Pooja from Shree Sports added, "About 80 percent of our items are branded and the rest are sourced from local markets. Mostly the selection of any brand depends upon the mentality of the coach and parents purchase brands that are recommended by the coach."
Health & Fitness
Sunil Sehgal, owner of Yash Sports informed that awareness regarding health and body fitness has motivated people to take up sports.
"Younger generation is now signing up for fitness activities. This has given rise to the number of gymnasiums, yoga centres and Aerobics centres in Pimpri-Chinchwad," said Sehgal who opened his shop in residential area of Pradhikaran in 1999 with an investment of Rs 3 lakh.
Sehgal informed that initially he was growing at about 30 percent a year but now it has come down to around 10 to 15 percent depending upon the sports product.
Lack Of Infrastructure
Speaking about the reasons behind the declining growth, business observers pointed at the lack of basic sports infrastructure facilities in Pimpri-Chinchwad Township.
Kalra from Shakti Sports also said that the city lacks good quality coaches. "We do not have appropriate grounds to play. Neighbouring Pune have developed the taste for all kind of sports. They have lavish grounds right in the heart of city. But the scenario is very disheartening in Pimpri-Chinchwad. We also lack professional sports training academies," he said.
He also predicted that Local Body Tax (LBT) will further raise the price of sports products by at least 10 percent to 12 percent.
Sehgal on other hand pointed out that there is too much political interference as far as sports is concerned. "We have Madanlal Dhingra Stadium in Pradhikaran but civic body aims to provide it at lease and earn money from it. This luxury is affordable to rich class. But middle and upper middle class people will not be in a position to afford this sports luxury. This thus affects the local talent of the region," he said.
Competition
Jalandhar's 1,200-odd sports goods manufacturers a majority of them being SMEs generate annual revenues of Rs 700 crore, including exports. The shops owners of Pimpri-Chinchwad tend to purchase these items from the various branded and non-branded shops of Jalandhar.
Pooja said, "Competition helps us to grow. Even today there are selected shops who have committed customers and their business is growing. However, now people are more aware of the price. People search online and make sure that they pay only for genuine items."
Like other markets, local sports goods market faces a threat from Chinese products. "Sports products are under severe threat from them. Some Indian manufacturers have stopped production and are trading for Chinese products which are cheaper and inferior," added Kalra.
