Industry

Studying The Malaysian Activewear Scene for Q1 of 2018

By Yi Jun

April 20, 2018

The beginning of the year seems to be a good timeframe for brands to drive apparel sales, especially in activewear. The all-too-familiar “new year, new me” resolution is an opportunity for retailers and brands to push their products. The common tradition gets people to work towards a goal, and most of it revolves around the pursuit for a healthier life. Before the clock even struck 12 on December 31st, ample articles about activewear began populating the Web. With Q1 of 2018 now closed, one might wonder if the first quarter of the year reaped the same rewards as brands and retailers had hoped.

One way to gauge the activewear scene during the Q1 period is to study brands that offer the same category. While you can easily just search Q1 reports, it’s tough to ignore the fact there is more than one factor that determines a brand’s success… or failure. From consumer demands to selling the right product at the right time, these are just a few contributing components to the overall report. In other words, the numbers you see are more than just statistical figures. The Malaysian activewear scene, for example, is one to watch. This might lead you to ask…

Why Malaysia?

The activewear scene here is in a unique position as it is still a growing market. Statistics showed that Malaysia is one of the least active in the region, but on the flip side, there are various fitness startups and ventures that aim to turn things around. While the discontinuation of popular homegrown label Move by Twenty3, indicated that the market may be faltering, data obtained from Statista proved otherwise. According to the revenue of the ‘fitness’ segment, the activewear scene is worth US$38 million so far in 2018 in Malaysia.

Another interesting angle here is that fast-fashion may be surpassing athletics apparels in terms of faster sellout and replenishment rates. Fast-fashion like H&M and Forever 21 have since hopped on the bandwagon, launching an athleisure-centric activewear line. Retailers specialising in performance-wear are now incorporating appeal and versatility. Sportswear powerhouses like Nike are starting to include in ‘fashion styles’, as in the words of Nike’s president Trevor Edwards, “one of the things that we recognise, certainly in the women’s business, is that there is no performance without style”.

With that, this article aims to unravel the activewear scene for Q1 of 2018, primarily in overall performance, assortments and colours in Malaysia.

Activewear in Sportswear MY

Nike or Adidas comes to mind one thinks of sportswear. While both did not originate from Malaysia, they are definitely pioneers in the industry. First things first, how did two of the biggest sportswear giants performed from January to March 2018?

Nike Leads The Field

performance for nike and adidas

 

Before diving into assortments and colours, let’s first establish the sales performances for both sportswear giants. For Q1 of  2018, Nike took the lead. As depicted in the image above, Nike had a solid 74.3% sellout rate, without the help of discounts. Adidas, on the other hand, saw a 42.9% sellout, which is 30% less of what Nike had. In addition to that, 24.3% of the products were on discount, mostly within the range of 30-34%. This implied that discounts may have had an impact on sellout and replenishment.

As mentioned, the numbers you see are more than what meets the eye. In order to fully understand the scene, it is important to take a look at the assortments and colours strategised.

It’s Not Nike or Adidas Without The Shoes

Between the two brands, Nike had more SKUs than Adidas, with almost double the total amount. Both had the same top three categories: activewear shoes, activewear tops & t-shirts and activewear pants & leggings. The synonymous structure could be due to the fact that both are competitors and have similar target markets.

sellout assortment rate for nike

 

sellout assortment rate for adidas

 

For Nike, the sellout rates for all three were the highest amongst the rest of the categories. While more activewear tops & t-shirts were sold than pants & leggings, the latter almost cleared out 80% of its original stock. Adidas, on the other hand, saw a similar pattern, but slightly missed the mark with its activewear pants & leggings. Even though this category was the third most highly-stocked, it was accessories – socks, tights, hats – that were more in demand. In addition, Adidas’ sellout rates were mostly in the 30-40% range, while Nike saw much higher returns.

For the number one spot for both retailers, activewear shoes were the most-stocked category for Q1 of 2018… but of course, this comes as no surprise. According to Omnilytics, the most out-of-stock items for the same period were their popular lifestyle shoes.

nike popular shoes volt and total orange

Image Source: Nike

Two of Nike’s shoes caught the most attention during Q1 of 2018. Volt and Total Orange, from the Nike Air Max 270 collection, were completely sold out in Nike’s e-Commerce site after launching in February 2018. Volt went out-of-stock two weeks after, while Total Orange took 12 days. While the shoes have a lightweight design for easy movement, one might assume that it sold out amongst the sea of collections due to its highly-driven athleisure design.

Black Dominates Colour Charts

top 3 colours for nike and adidas

 

As seen in the pie charts above, black covers more than half of the overall colour palette. This isn’t anything out of the ordinary since black is traditionally an evergreen colour. After all, the primary colour had the highest number for out-of-stock rates as well.  Nike and Adidas had the same top two colours, but it seemed that Nike favoured monochrome colours, while Adidas injected a pop of blue into their collection.

Activewear in Fast Fashion MY

From what was a predominantly sportswear arena, the activewear scene is now populated with many other labels, including fast fashion. If Nike and Adidas are two of the biggest sportswear retailers, then H&M and Forever 21 are the biggest players in fast fashion. H&M launched H&M Sport four years ago, while Forever 21 launched their own respective activewear line two years after.

H&M Takes The Crown

strategies for h&m and forever 21

 

As H&M and Forever 21 have other clothing lines to focus on, the activewear collection is much smaller in comparison with Nike and Adidas. However, both fast fashion retailers have relatively higher sellout rates. H&M had an 84% sellout, completed with an 85.5% replenishment. Forever 21, albeit lower than Nike, still finished strong with a 72.9% sellout. Just like Adidas, Forever 21 utilised a discount strategy at almost the same common discount range.

If placed on a scale along with the sportswear retailers, H&M would be crowned champion, followed by Nike, Forever 21 and Adidas. Marshal Cohen, chief industry analyst at a market research firm NPD Group, said that for fast fashion to break into activewear, there needs to be some sort of “element of legitimacy” for “consumers need to believe it’s at the same level as Nike and Lululemon, even if the vast majority aren’t going to be using it to work out”. According to data obtained from Omnilytics, it seemed that consumers are buying into activewear by fast fashion retailers in Malaysia.

However, one important criterion to factor in is the price point. An activewear top in Nike can cost up to a price tag of RM250, while the same category in H&M may just be well under RM150. The athleisure trend, especially for fast fashion that offers it at a cheaper price point, can be more enticing for consumers since essentially, they can wear the same outfit from the gym to dinner… but at a lower cost.

Different Priorities for Fast-Fashion

sellout assortment rate h&m

 

sellout assortment rate for forever 21

 

Both retailers have all of the same top three categories but of different rankings. For H&M, priority was given to activewear tops & t-shirts, while the latter brand focused on activewear pants & leggings. The only constant in this comparison was that sports bras remained its position at the third spot. While both had slightly different products to focus on, the decision paid off, as the out-of-stock sequence was in accordance to the highest stocked ranking as well. Additionally, all of the sellout rates for both brands were above the 70% range.

Fast Fashion Goes for Safe Colours Too

top 3 colours for h&m and forever 21

 

Just like sportswear retailers, black dominated fast fashion as well. In fact, fast fashion emphasised more on darker shades, with both retailers allocating more than 60% of this colour palette. H&M had both the top three colours from Nike and Adidas: Nike’s greys and Adidas’ blues. Forever 21, in contrast, featured mostly whites… along with a surprise of the colour pink. This may be due to the millennial pink trend that has not faded just yet or could be impacted by their younger demographic.

So, How Did The Malaysian Activewear Market Fare in Q1 of 2018?

While fast fashion has a reputation for not being fast enough, the verdict here proves otherwise. H&M performed better than Nike in higher sellout rates, even though Nike was marketed as the strongest competitor in athletics apparel. Forever 21 performed better than Adidas in the same category, even though the former does not offer footwear.

Of course, it involves other factors, such as price points or marketing efforts during the said period. H&M may have only taken the crown in sellouts due to its affordability, as well as its ability to produce trendy athleisure wear that can be worn any time of the day. With this flexibility, consumers may feel that purchasing workout leggings at half the cost in fast fashion is more economical.

With that said, one of the most common themes amongst all of the retailers listed is that both know what their consumers want (with the exception of Adidas’ slightly missed opportunity), and seemed to be able to deliver in time. Fast fashion may have only gained the upper-hand here due to its cheaper alternatives, but it does certainly mean that traditional athletic apparel has competition. Even though there are many other activewear retailers in the industry, this is still relevant to all: delivering the right product at the right time will garner higher returns, especially at a short tight frame of three months.

How will Q2 of 2018 fare?

omnilytics retail market free demo competitor analysis

 

Like to see more of this? Sign up to receive the latest industry insights, news, and weekly updates delivered straight to your inbox.

The data above was obtained from Omnilytics, real-time market data platform. The numbers and statistics may vary, as the platform is updated every day. The time period of the information taken was between 1st January, 2018 to 31st March, 2018.