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Business trends

Nike, Yonex and sporting good peers prep for post-COVID-19 world

Makers brace for storm of pent-up demand with new products and online sales

Nike's Alphafly is notable for its thick soles and a carbon plate that provides more bounce in each stride. (Photo courtesy of Nike)

TOKYO -- No one can predict when the new coronavirus pandemic will be fully brought under control in Japan, but sporting goods and apparel companies are already preparing for the post-coronavirus period with new products. Yonex has started selling a new racket for tennis enthusiasts, and U.S.-based Nike has added new colors to its popular thick-soled shoes.

The Tokyo Olympics, which have already been delayed once, are about a year away. The current situation is tough, but companies are laying the groundwork for future growth.

Yonex last released a new racket three years ago, when it debuted its Astrel brand. Jointly developed with former tennis athlete Kimiko Date, the new product is aimed at tennis enthusiasts in their thirties and older. The racket features gutting that is set equally close to create a sweet spot -- the area where a racket can effectively return a ball -- that is 7% bigger than that of a regular circular racket. Its grommets are also 12% lighter than in previous models.

The new racket also makes use of Yonex's specialized carbon fiber processing technology. The carbon fibers are mixed with a strong and sticky resin and used throughout the entire racket. Compared to previous models, that reduces the racket's weight by five grams and makes it 5% stronger.

The company earns nearly 50% of its sales in Japan. When the pandemic was fully underway, sports and other club activities at schools had to be suspended and all sorts of tournaments were canceled. The company's March sales fell 20% from the same month last year. The situation remained difficult in April and May, enough so that the company abandoned its medium-term business plan which was set to end this fiscal year. But Yonex continued to develop new products to be ready to capture demand for sporting goods in the "post-coronavirus" era.

On July 2, Nike added new colors for its "Air Zoom Alphafly," which had temporarily sold out before. That model of thick-soled shoe set a record at the Hakone relay race at the beginning of the year. The shoes have a unique cushioning material, called "Zoom Air pods," in the soles and have a greater amount than previous models of "Zoom X," the lightest sole material Nike has developed.

Yonex's new racket targets tennis players in their thirties and older. (Photo courtesy of Yonex)

Nike has resumed operations in Japan while observing coronavirus-related directives issued by local governments. CEO John Donahoe said the pandemic has made consumers aware of the necessity for good health and exercise, adding that sports will become more important than ever. ASICS has also launched a new shoe for women, and Mizuno is selling clothing with cooling fans attached.

The sporting goods market in Japan in 2019 is forecast to have grown 2.1% from the previous year to 1.57 trillion yen ($14.6 billion), according to Tokyo-based Yano Research Institute. That would be the fourth consecutive year of growth. Demand for sporting goods received an extra boost last year from the Rugby World Cup. If postponement of the Tokyo Olympics is not factored in, the market is expected to grow 1.8% to 1.6 trillion yen in 2020.

Tokyo-based market research company INTAGE surveyed more than 800 people in mid-May and found that just under 60% of them said insufficient exercise and physical weakness were problems that emerged from staying at home. Therefore, iIt seems the potential demand for sporting goods is increasing.

Many sporting goods and apparel companies had been performing well until 2019. That was driven by clothing at the office becoming more casual as well as the "athleisure" trend, in which sports clothes are incorporated into everyday wear. Companies had provided clothing and equipment like rackets for the Tokyo Olympics and were expecting further growth -- until the coronavirus hit. With specialty stores suspending business and the Games postponed, it has turned out to be a challenging year.

ASICS is one of the Tokyo Olympics' "Gold Partners," or top sponsors. Companies like Yonex, Adidas Japan and Sumitomo Rubber Industries, which owns the Dunlop brand, serve as "sole suppliers" for the Games, meaning they provide balls for matches and services for athletes. This year was supposed to be an opportunity for those brands to draw worldwide attention, but the chance has now been pushed back, leading to a significant impact on the companies and brands.

Still, there have been some silver linings for them during the coronavirus crisis. All of the companies have greatly increased their online sales, which had previously been low. ASICS increased its sales for the period from January to March by 60% from the same period last year, and full fiscal year sales at Goldwin jumped by 45%.

Companies will focus on promoting sales by linking e-commerce with physical stores, as well as greater use of social media. Yonex has generally focused on distributing to specialty stores, but in April it launched its own retail website.

Now with the Olympics postponed, there is plenty of time to work on sales promotion. ASICS released its "Metal Racer," which is intended to compete with Nike's thick-soled shoes. Mizuno is also rolling out its own shoes with built-in plates.

It may take time for such seeds to bear fruit, but demand for sporting goods is likely to increase after the coronavirus subsides. Companies will have to rack their brains to get by until then.

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