Professional Documents
Culture Documents
Colombia
began in 2008. However, it slipping back into a deficit of 1.0% of total GDP in
2013, owing to lower tax collection. Nevertheless, its stable government
finances helped Colombia lower its public debt level from 36.0% of total GDP in
2009 to 32.1% in 2013, far lower than the Latin American average of 49.2% in
the same year.
Colombia has a strong banking sector, characterised by rigorous regulation;
strong profits; and increased solvency, all of which came on the back of
consolidation and regulations enforced, as a result of its domestic credit crisis
in the 1990s. This made the sector resilient to the global financial crisis which
began in 2008. The proportion of non-performing loans to total gross loans
declined from 4.0% in 2009 to 2.8% in 2013 and is expected to come down
further to 2.7% in 2014. In comparison, Mexico had a non-performing loans
ratio of 3.2%, while Brazils was 2.9% in 2013.
Political Stability and Regulatory Quality
Colombia ranked 187th (out of 203 countries) in the World Banks Political
Stability and Absence of Violence Index 2012 (latest data available), worsening
from its 179th position in 2011 (out of 204 countries), as illegal armed groups,
such as the Revolutionary Armed Forces of Colombia (FARC) and National
Liberation Army (ELN), as well as organised crime groups continue to affect the
political and social stability of Colombia. The country accordingly stood at the
last position among all the Latin American countries in the 2012 rankings, with
Venezuela (167th) and Peru (162nd) being its closest countries.
On the brighter side, Colombian president Juan Manuel Santos has continued
former President Alvaro Uribes (20022010) policy of democratic security and
engaged in peace talks with FARC, which has slightly helped allay securityrelated fears in the country.
Colombias ranking in the World Banks Regulatory Quality Index progressively
improved from 91st (out of 201 economies) in 2009 to 74th (out of 202
countries) in 2012 (latest data available), on the back of improved regulations
towards financial supervision and overhauling of the oil and mining royalties
system (July 2011). At this position, it lagged behind Chile (15th) and Mexico
(67th), but is ahead of Brazil (92nd) in the 2012 rankings.
Global Competitiveness Index
In the Global Competitiveness Index (GCI) 2013 published by the World
Economic Forum, Colombia ranked 69th out of 148 countries, unchanged from
its position in the GCI 2012 rankings out of 144 countries. Market size (31st)
and Macroeconomic environment (33rd) were its best performing categories,
while Institutions (110th) and Goods market efficiency (102nd) were its worst
performing categories in the GCI 2013.
Corruption
cautious due to prolonged recovery from the 2008-2009 global financial crisis.
In 2013, however, its FDI outflows grew to COP14.3 trillion (US$7.7 billion) in
2013, as businesses stepped up their investments in the USA. In real terms,
this marks a growth of 152% between 2008 and 2013 and reflects the
increased liberalisation of international trade in Colombia.
Infrastructure
Colombias poor infrastructure is reflected in its 117th ranking globally (out of
148 countries) in Quality of overall infrastructure of the GCI 2013 report. Its
worst performing categories were Quality of roads (130th) and Quality of
railroad infrastructure (113th), while its best performing categories were
Available airline seat km/week, millions (39th) and Quality of electricity
supply (63rd) in the GCI 2013.
The infrastructure sector is set to receive a boost, as the government is keen
on building 4,970 miles of roads by 2021 with a total investment of COP48.1
trillion (US$25.0 billion). Plans are also underway to spend COP963 trillion
(US$500 billion) towards expanding and upgrading facilities at Barranquilla,
Armenia, Neiva, Popayn and Cartago airports. In total, its transport
infrastructure segment is set to receive investments of close to COP193 trillion
(US$100 billion) by 2021.
TAX ENVIRONMENT
Colombia improves ranking in Paying Taxes in Doing Business 2014
Ease of Paying Taxes
Colombia ranked 104th out of 189 countries in the Paying Taxes category in
Doing Business 2014, improving significantly from its 167th ranking out 178
countries in Doing Business 2008. The improvement is a result of the
establishment of mandatory electronic filing and payment for some of the
major taxes between 2008 and 2012 and the approval of major tax reform
legislation (Law 1607) in December 2012. The reform modified certain tax
rates, simplified some and created new taxes and regulations. A new tax on net
profits Income tax for equality (CREE) was created, which is levied at a
rate of 9.0% in 2014 and 2015, and 8.0% from 2016 onwards.
Despite the improvements, Paying Taxes remained the second worst
performing category for Colombia in Doing Business 2014, after Enforcing
Contracts (155th). Colombia, therefore, fares worse than Chile (38th), but is
way ahead of Brazil (159th) and Argentina (153rd) in Doing Business 2014.
Thanks to the use of electronic tax filing, it takes businesses 203 hours per
year to prepare, file, pay or withhold its taxes and contributions in Colombia,
according to Doing Business 2014, significantly lower than the Latin American
and Caribbean average of 369 hours per year.
The size of the informal economy in Colombia is huge, on the back of high
levels of tax evasion; the prevalence of drug trafficking; and employment in the
informal sector.
With the view to tackling tax evasion, the government is looking to restrict
Colombians access to offshore tax havens and increase the number of tax
auditors in the country.
Tax rates
Domestic and foreign companies based in Colombia pay a corporation tax rate
of 25.0% in 2014, while foreign companies with no physical presence in the
country pay 33.0% corporation tax rate. Meanwhile, a reduced 15.0%
corporation tax rate is applicable on companies located in the free trade zones.
In comparison, Argentina has a standard corporate tax rate of 35.0%, while
Brazils is 25.0% in 2014.
Colombias total tax rate of 76.0 % of total profits, according to Doing Business
2014, is higher than Brazils 68.3% total tax rate, but lower than Argentinas
108%. However, Colombias labour tax of 28.8% of total profits, according to
Doing Business 2014.
The standard rate of value-added tax (VAT) in Colombia is 16.0% in 2014, which
is levied on the sale of goods, imported items and provision of services. A
reduced 5.0% VAT is applicable on certain goods and services, such as property
and food items, while a zero percentage VAT is applicable to export goods. In
comparison, Mexico has a 16.0% VAT rate, while Argentina has a 21.0% VAT
rate in 2014.
INNOVATION AND TECHNOLOGY
Colombia had the second highest mobile telephone penetration rate in Latin
America in 2013
Uptake of Technology
Liberalisation and increased competition in the Colombian ICT sector has
helped the country improve its ICT penetration from 2008 until 2013. In 2013,
its mobile telephone possession rate stood at 94.7% of total households,
compared with 83.8% in 2008 and the third highest mobile telephone
possession rate in Latin American, after Chiles 96.5% and Brazils 95.7% in
2013. The credit for this goes to government initiatives, such as the Vive
Digital plan (first launched for the 2010-2014 period and extended to the
2014-2018 period); the Productive Transformation Programme (2007); and the
revised ICT Law (2009), all of which were primarily aimed at improving telecom
penetration in the country.
The proportion of the total population using the Internet in Colombia reached
52.8% in 2013, improving from only 25.6% in 2008, on the back of the strong
growth of online commerce in the country. The size of the Internet retailing
market in Colombia increased by a real 491% from 2008 until 2013, to COP1.3
trillion (US$700 million) in 2013. Despite the growth, Colombia remained shy of
Chiles 64.5% and Argentinas 59.8% total population Internet usage in 2013.
Meanwhile, the proportion of its total businesses using the Internet was 99.8%
in 2013, the second highest in Latin America, after Argentinas 100% in 2013.
Networked Readiness Index
The improvements in Colombias ICT infrastructure; increased ICT affordability;
and the consequent uptake of ICT by individuals helped Colombia improve its
ranking in the Networked Readiness Index (NRI) from 73rd (out of 142
countries) in 2012 to 63rd out of 148 countries in 2014. This puts it significantly
behind Chile (35th) but slightly ahead of Brazil (69th) and Argentina (100th) in
the NRI 2014 rankings.
Research and Development
Colombias total expenditure on research and development (R&D) increased
from COP864 billion (US$439 million) in 2008 to COP1.4 trillion (US$741 million)
in 2013, registering real growth of 38.2% from 2008 until 2013. However, as a
proportion of total GDP, its total overall R&D expenditure remained stable at
0.2% throughout the period from 2008 until 2013, standing significantly lower
in comparison to the Latin American of 0.8% in 2013.
Colombias R&D activities are focused on software development, science and
technology, as well as development of new medical products. The government
allows companies to deduct their R&D-related expenses incurred during the
year from their total tax income for the same year and also provides R&D tax
credit and grants.
Patent Numbers, Protection and Targets
Colombias increased focus on innovation and technology helped increase its
patent grants by the National Patent Office from 409 in 2008 to 1,804 in 2013.
Meanwhile, its patent grants by the European Patent Office (EPO) increased
from 2.0 patents in 2008 to 3.0 in 2013, while those by the United States
Patent and Trademark Office (USPTO) increased from 6.0 in 2008 to 11.8
patents in 2013. The increase in the number of patent grants by the NPO is due
to a reduction in patent examination times at the NPO, as a result of the patent
law implemented under the Andean Community Decision 486 of 2000, which
are closely in line with the international Agreement on Trade-Related Aspects of
Intellectual Property Rights; the Patent Cooperation Treaty; the Paris
Convention on Industrial Property; and the UPOV Convention. However,
widespread prevalence of piracy continues to pose a significant threat to
legitimate intellectual property in the country.
LABOUR MARKET AND POPULATION SKILL SET
Labour market suffers from acute skills shortage
Government Expenditure on Education / Education Standards
The adult literacy rate in Colombia improved slightly from 93.4% of the adult
population aged 15 and over in 2008 to 93.8% in 2013, as a result of the
Integral School Literacy Programme, which has been in place since 2006 with
the view to improve the level of literacy among adults, particularly women. The
female adult literacy rate improved from 93.4% of the female adult population
aged 15 and over in 2008 to 93.9% in 2013, while the male adult literacy level
improved from 93.3% of the male adult population aged 15 and over in 2008 to
93.7% in 2013.
Higher Education and Skills Shortages
In 2013, only 12.5% of the Colombian population aged 15 and above had a
higher education degree, increasing from 11.5% in 2008 and falling closely in
line with the Latin American average of 12.8% during the same year. This is
partly due to high school dropout rates and partly due to the poor quality of
primary and secondary education in the country, as a result of which students
perform poorly in pre-university exams.
The jobs market faces a shortage of graduates, particularly in sectors requiring
technical skills, such as engineering, accounting and production operations.
Social Sciences, Business and Law had the highest proportion of total
graduates at 49.5% in 2013, due to the higher salaries in these sectors.
Meanwhile, Agriculture attracted the smallest proportion of graduates, at 2.2%
of total graduates, during the same year, owing to low pay scales in the sector.
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Emerging market economies (EMEs) are experiencing a change in household
structure, driven by various social, economic and demographic factors. The
share of couple with children households is declining, though it is still the most
popular household type in many EMEs. Meanwhile, single-person, couple
without children and single-parent households are growing fast, thus leading to
changes in consumption and dwelling patterns and creating new opportunities
for consumer businesses in EMEs.
Key points
The household structure in 25 key EMEs is changing, as the proportion of
couple with children households to total households declined from 44.9% in
2007 to 42.9% in 2012;
On the other hand, the shares of single-person, couple without children and
single-parent households are on the rise as a result of population ageing, the
higher rate of female participation in the workforce, rising divorce rates and the
growth of urban single lifestyles. In 2012, the aggregate number of singleperson households accounted for 13.0% of total households in EMEs, up from
11.4% in 2007;
As households become smaller, the demand for apartments will rise across
EMEs, especially in urban areas due to a lack of space and high living costs.
The share of households living in apartments in EMEs increased from 29.8% of
all households in 2007, to 33.4% in 2012, and is forecast to reach 35.5% by
2020. This will create opportunities for the construction, home furniture and
household appliances sectors in EMEs;
The growth of single-person and couple without children households will fuel
discretionary consumption in EMEs as these households tend to have more
available budget for items such as leisure and recreation, eating out and
clothing. By 2020, the share of discretionary spending spending on all
categories except essential items including food and non-alcoholic beverages
and housing is estimated to reach 59.1% of total expenditure in EMEs,
compared to 57.2% in 2012;
Backed by population growth and the rising trend of smaller households, the
number of households in EMEs should reach 1.3 billion by 2020. This will
support consumer expenditure, which is forecast to expand strongly by 47.1%
in fixed US$ constant terms during the 2013-2020 period.
Couples with children remain the largest household group
Despite a declining trend, couples with children continue to be the most
dominant household type in most EMEs. However, there is a noticeable
diversity among these countries:
In 2012, the aggregate number of households in EMEs reached 1.1 billion, up
by 10.1% since 2007. Couple with children households accounted for 42.9% of
EMEs total households in 2012. This, however, represents a decline from a
share of 44.9% seen in 2007, reflecting a change in culture and lifestyles in
these countries;
In ten out of 25 EMEs, couple with children households made up over 50.0% of
their total households in 2012. Within EMEs, the Philippines had the highest
proportion of couple with children households, at 63.6% of all households in
2012, followed by Indonesia (59.1%) and Morocco (56.1%);
Meanwhile, EMEs with a smaller share of couple with children households are
mostly found in Eastern Europe. Ukraine and Russia had the lowest proportion
of couple with children households at 23.4% and 26.3% of total households in
2012 respectively. This is due to the relatively low fertility rates in Eastern
Europe countries, compared to Asian Pacific or the Middle East and African
economies;
Asian countries like China, Indonesia and Thailand witnessed the highest
decrease in the proportion of couple with children households between 2007
and 2012. In China, for example, the share of couple with children households
declined from 42.5% of total households in 2007 to 38.3% in 2012. Birth rates
in China have been low due to the governments one-child policy since 1979.
Also, rising wealth, urbanization and changes in social attitude are factors
leading to the decline of traditional families in these emerging Asian countries.
But other household types are growing
Driven by multiple social, economic and demographic factors, EMEs have seen
an increase in single-person, couple without children and single-parent
households:
In 2012, 13.0% of EMEs total households were single-person households, up
from 11.4% in 2007. Single-person households often include young
professionals, never-marrieds or divorcees and older widows. Population
ageing, increasing divorce rates and growth of urban single lifestyles are the
major factors contributing to the rising trend of single-person households in
EMEs;
Amongst the 25 EMEs, China has experienced the largest increase in the
proportion of single-person households during the period, from 12.5% of all
households in 2007 to 15.7% in 2012, mainly due to the countrys rapid
urbanisation process. Meanwhile, single-person households remained the most
dominant household type in some Eastern European emerging economies such
as Hungary and Ukraine accounting for 33.3% and 33.6% of their total
households respectively;
The proportion of couple without children households in EMEs also increased
from 15.8% of the aggregate total households in 2007 to 17.3% in 2012. In
Turkey, for example, couples without children made up 16.0% of total
households in 2012, up from 15.5% in 2007. As more women in EMEs are
working, there is a growing number of couples who opt for no children or late
childbirth;
The share of single-parent households to the aggregate total households in
EMEs reached 6.2% in 2012, slightly up from 6.0% in 2007. Amongst the 25
EMEs, single-parent households are most common in Latin American emerging
economies such as Mexico and Argentina. Due to a 21.5% increase in the
number of divorces during the period of 2007-2012, the proportion of singleparent households in Mexico rose from 17.8% of all households in 2007 to
18.2% in 2012.
Impacts on dwelling and spending patterns
The growth of smaller households including single-person, couple without
children and single-parent households will drive the demand for smaller
housing units, especially for apartments in cities where it has become
increasingly expensive and crowded. In fact, the number of households living in
apartments in EMEs grew by 23.4% between 2007 and 2012, significantly
higher than a 3.8% increase in the number of households living in houses.
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Esperanza de vida (Hombres):
Colombia
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CHINA:
With an enormous consumer market, China is an attractive proposition for
foreign investment, but market entry is faced with considerable barriers. A
slowing economy could create challenges for the countrys labour market, but
relatively low wages still hold appeal for businesses. Corruption is widespread
and rankings in this sphere have deteriorated. Nevertheless, a sizeable rise in
patent grants points to an increasingly innovations-focused economy.
Ease of Doing Business
China ranked 90th out of 189 countries in the World Banks Ease of Doing
Business (Doing Business) 2015 report. Its 2015 ranking compared favourably
with that of Indonesia (114th) but was significantly worse that Japans (29th).
Enforcing contracts was Chinas best performing category (35th) in Doing
Business 2015, as the time taken to resolve disputes at 406 days and costs
involved at 15.1% of claim were better than the East Asia & Pacific averages of
554 days and 48.6% respectively. Chinas worst performing category in Doing
Business 2015 was Dealing with Construction Permits, ranking at 179th out of
189 countries. The number of procedures at 22.0; the time taken to build a
warehouse at 274 days and the costs involved at 7.6% of warehouse value
were worse than the regional averages of 14.6, 134 days and 2.1%
respectively.
Starting a Business saw the largest category change, rising from 151st in
Doing Business 2014 to 128th in Doing Business 2015 (both out of 189
countries), given that China eradicated the need to acquire a capital
verification report from an auditing company, as well as scrapping the
minimum capital requirement in both Beijing and Shanghai.
Government Finances, Inflation and Credit Availability
Chinese business confidence dropped markedly in October 2014, as it became
clear that the economy was slowing. Having recovered from the lows
experienced then, business confidence fell again at the start of 2015, owing to
lower orders and a slowdown in output.
Annual inflation in China reduced from 5.5% in 2011 to 2.1% in 2014, owing to
lower manufacturer and food prices. Meanwhile, the general government net
budget deficit equated to only 1.0% of total GDP in 2014, versus 1.8% in 2009,
demonstrating that government finances were very manageable. Public debt
rose from 35.8% of total GDP in 2009 to 40.0% in 2014, as the government
increased its focus on infrastructure spending. However, it is noteworthy that a
considerable amount of activity is off-balance sheet in China, particularly at
the local level, therefore, government finance measures could be higher than
officially indicated.
Nonperforming loans (NPL) remained low throughout the 2009-2014 period,
starting at 1.6% of total gross loans in 2009 and falling to 1.1% in 2014.
Nevertheless, a sizeable shadow-banking sector could mask the true extent of
credit availability and loan defaults, but increased regulation of this sector
could result in higher NPL ratios in the future, as could the inability of local
governments to repay considerable debts accumulated since the global
financial crisis of 2008-2009.
Global Competitiveness Index
In the World Economic Forums Global Competitiveness Index (GCI) 2014, China
ranked 28th out of 144 economies, versus 29th out of 148 economies in the
previous year.
Its best ranking was achieved for Market size (2nd), given that it is the worlds
largest country by population, whilst its worst ranking was in Technological
readiness (83rd) in the GCI 2014.
Political Stability and Regulatory Quality
Although China is characterised by the one-party Communist system, with
stringent controls over the populace, the rapid rise in economic freedom has
created discontent amongst Chinas rural communities that are increasingly
being left behind their urban counterparts.
In the World Banks Political Stability and Absence of Violence Index, China
ranked 147th out of 203 countries in 2013 (latest data available), falling from
139th out of 202 countries in 2009, as social dissatisfaction amongst rural
communities and strained relations with some of its regional neighbours, such
as Japan over territorial disputes, added to instability. Its 2013 ranking
compared unfavourably with Japans (34th) and South Koreas (85th).
In the World Banks Regulatory Quality Index, China ranked 117th out of 202
countries in 2013 (latest data available), with its ranking deteriorating from
111th out of 201 countries in 2009, as the growth in shadow banking after the
onset of the global financial crisis of 2008-2009 negatively affected the
countrys regulatory backdrop. Its 2013 ranking was below both Japans (34th)
and South Koreas (41st).
Corruption
Corruption is a growing problem in China, as demonstrated by its relatively low
ranking of 100th out of 175 countries in Transparency Internationals Corruption
Perceptions Index (CPI) 2014, comparing badly with Japans (15th) and South
Koreas (43rd). Its ranking deteriorated markedly from 80th out of 177
countries in the CPI 2013, the biggest decline of any country globally, owing to
a lack of transparency in its judiciary and government apparatus, as well as
limited regulation for its private sector. Additionally, public executives have
been hiding profits in offshore jurisdictions.
Since coming to power in 2013, President Xi Jinping has launched a massive
campaign against corruption that gained momentum in 2014, targeting both
private and public individuals, irrespective of their rank. By October 2014, the
anti-corruption drive had snared over 13,000 officials, whilst over CNY200
million (US$32.0 million) was uncovered at the residence of an official in May
2014.
TRADE ENVIRONMENT, REGULATIONS AND INFRASTRUCTURE
Considerable barriers exist to foreign investment
Government Attitude to Foreign Direct Investment (FDI)
With Chinas vast market and economic potential, it is one
attractive countries for foreign investment globally. However,
restrictions apply for FDI, whilst human capital costs are on
transparency gaps and corruption continue to hamper investment
of the most
considerable
the rise and
prospects.
Although China is keen to attract FDI to its shores, the government will only
open up industries that it considers suitable for FDI promotion and can bar
foreign entities from investing in sectors of strategic national importance or
those that are in direct competition with national monopolies or other domestic
companies. Furthermore, as FDI is under state scrutiny, its regulation and laws
are subject to constant change, which can make any investment in China very
volatile. Limits are also placed on foreign shareholdings in certain sectors:
value-added telecoms services are limited to 50.0% ownership, as are life
insurance companies.
After becoming president in 2013, Xi Jinping has attempted to open up China to
foreign businesses and at the Third Plenum of the 18th Party Congress in
November 2013, a set of reforms were outlined that are aimed at making FDI
more accessible, which include the potential for national treatment at all stages
of foreign investment and the prospect of making all sectors open to FDI (with
the exception of those that are overtly outlined for exclusion).
China has free trade agreements (FTAs) with a number of countries and
economic blocs, including Pakistan, Chile, Switzerland and ASEAN (Association
of Southeast Asian Nations). Negotiations are under way for FTAs with Norway,
Australia and South Korea, whilst China is also considering FTAs with India and
Colombia. The country has been a member of the World Trade Organization
(WTO) since 2001.
Trends in FDI Flows
Following the global financial crisis of 2008-2009, Chinese FDI inflows
recovered strongly from CNY649 billion (US$95.0 billion) in 2009 to CNY768
billion (US$124 billion) in 2013 (latest data available), demonstrating the
continuing draw of its large consumer market (the second largest globally in
2014 in US$ terms) and industrial base.
Nonetheless, Chinas FDI intensity equated to only 1.3% in 2013 (latest data
available), down from 1.9% in 2009, which compared poorly with that of
Malaysia at 3.9% and the Asia Pacific average of 1.8% in 2013, given its volatile
treatment of foreign investors.
Meanwhile, FDI outflows nearly doubled in local currency terms in the 20092013 period (latest data available), rising from CNY386 billion in 2009 (US$56.5
billion) to CNY626 billion (US$101 billion) in 2013, indicative of the increasing
firepower of Chinese companies abroad.
Infrastructure
As a result of Chinas massive urbanisation drive, the country has become a
key market for infrastructure projects. However, the breakneck speed with
which China has implemented this development has placed its infrastructure at
risk of excess capacity and poor quality. These issues are coupled with the
burgeoning debt that local government bodies have undertaken to fulfil their
infrastructure requirements. Despite these challenges, China ranked relatively
well at 46th out of 144 economies in the GCI 2014.
President Xi Jinping has recognised the need to upgrade the quality of Chinas
infrastructure offering and in November 2014, the government gave the goahead for CNY693 billion (US$113 billion) worth of infrastructure projects,
aimed at addressing this issue as well as giving an injection to Chinas slowing
economy. Railways and the airport sector are set to benefit from this
investment.
TAX ENVIRONMENT
Reforms have somewhat eased a challenging tax environment
Ease of Paying Taxes
In Doing Business 2015, China ranked a lowly 120th out of 189 countries for
Paying Taxes, illustrating that its tax environment is challenging for
businesses. Nevertheless, according to Doing Business 2015, China did simplify
its tax regime by allowing companies to file and pay for their taxes
Internet business usage expanded rapidly in the 2009-2014 period from 68.8%
of total businesses in 2009 to 78.3% in 2014, but the latter figure was below
Japans at 99.3%. Meanwhile, only 49.3% of the total population used the
Internet in 2014 (compared with 85.3% in South Korea), up from 28.9% in
2009, owing to Chinas large rural population that was mostly still unconnected
(46.3% of the total population in 2014).
Networked Readiness Index
In the World Economic Forums Networked Readiness Index (NRI) 2014, China
ranked 62nd out of 148 economies, down from 58th out of 144 economies in
the NRI 2013. The fall in ranking was due to the lack of fulfilment of its ICT
potential and overall progress in this sphere. Its 2014 ranking compared
unfavourably with that of South Korea (10th) and Japan (16th).
Research and Development
Total research and development (R&D) expenditure was CNY1.4 trillion (US$226
billion) in 2014, increasing considerably by 100% in real terms since 2009, as
China attempted to close the gap in its innovations deficit. In 2014, total R&D
expenditure equated to 2.1% of total GDP, rising from 1.7% in 2009. However,
the figure was still below Japans at 3.3% in 2014, demonstrating that China
could significantly improve its R&D intensity.
China has a number of R&D incentives in place to increase company
expenditure in the area of innovation and technology, including a 15.0%
reduced corporation tax rate for qualifying high-technology companies. There is
also a 150% expenses super reduction in 2015 for relevant R&D activities.
Additionally, the government is also focusing on the development of Smart City
technology (where technological innovation is used to cut costs and increase
efficiency for a citys inhabitants).
Patent Numbers, Protection and Targets
In order to plug the gap in the realm of innovation, China has increased its
patent grants significantly. Indeed, the number of patents granted at the
National Patent Office rose dramatically from 128,389 in 2009 to 301,683 in
2014. Total patent grants at the European Patent Office (EPO) also increased
strongly from 361 in 2009 to 1,115 in 2014 (63.5% ICT-related), whilst at the
United States Patent and Trademark Office (USPTO), patent grants also rose
substantially from 1,028 in 2009 to 4,917 in 2014 (61.3% ICT-related). This
demonstrates Chinas success in gradually transforming itself from a
manufacturer to an innovator. The Chinese state has set an ambitious target of
trebling its patent applications by 2020 from its 2013 base, with an aim of filing
14 patents per 10,000 people by 2020 versus a filing of 4 patents per 10,000 in
2013.
Although China has reviewed many of its intellectual property rights
legislations, abuse of these laws is still widespread, as many are still not
rate in China are unavailable, anecdotal evidence suggests that there is a glut
of graduates in the jobs markets that are unable to find suitable roles, pointing
to rising youth unemployment at this level of educational attainment.
The Construction sector posted the biggest rise in its share of total
employment, rising from 9.6% of the total employed population in 2009 to
15.6% in 2014, as rapid urbanisation continued to create demand for
construction workers and partly fuel economic growth.
Conversely, the Public Administration and Defence; Education; Health;
Community, Social and Personal Service Activities; Other Activities sector saw
the largest decline in its share of employment, falling from 28.9% of the total
employed population in 2009 to 24.7% in 2014, as local governments
attempted to curb rising costs.
The Chinese female employment rate increased slightly from 71.3% of the
working age (15-64) female population in 2009 to 73.3% in 2014. However,
there is a considerable gender gap between the female and male employment
rates, with the latter equating to 88.4% of the working age (15-64) male
population in 2014, owing to Chinas patriarchal society and the emphasis that
it places on the more traditional female roles of homemaking and childcare.
Nevertheless, the female employment rate in China was extremely high by
regional comparisons (59.6% in South Korea in 2014), given the need for
female labour to contribute to the stellar success of the Chinese economy in
recent years, and government prioritisation of increasing female education
standards.
Wages and Productivity
Chinas labour market is relatively flexible, as demonstrated by its ranking of
37th out of 144 economies in the Labor market efficiency category of the GCI
2014. Within this category, there are considerable variations in ranking,
ranging from 15th for Hiring and firing practices, illustrating flexibility, to
120th for Redundancy costs, weeks of salary, which shows substantial rigidity.
Having said that, flexibility is aided, as workers do not have the right to strike;
but despite this rule, employee unrest is a common feature.
The wage per hour in manufacturing in China was CNY20.6 (US$3.4) in China in
2014, whilst the average wage per hour was CNY23.1 (US$3.8) in the same
year. This compared well with the developed economies in the region, such as
Japan (US$20.0 and US$17.5 respectively) in 2014, illustrating that Chinese
wages were still competitive compared with their more advanced counterparts,
but were higher than Indonesias wages at US$1.0 and US$0.9 respectively in
that year.
Meanwhile, Chinas minimum wage per month totalled CNY1,620 (US$264) in
2014, which was considerably below Japans at US$1,250, highlighting that
business costs in China are substantially lower in terms of their wage bills than
their more developed peers in the region. However, competition from
developing countries in the region, such as Indonesia where the monthly
minimum wage was only US$75.1 in 2014, is a growing concern for policy
makers.
Productivity in China (defined as GDP per person employed) stood at
US$13,322 in 2014, up from US$9,322 in 2009. Whilst this has increased
meaningfully in the 2009-2014 period, owing to investment by businesses in
the sectors that were driving Chinese economic growth, namely its labourintensive manufacturing industries (29.0% of the total employed population in
2014), it was still below South Koreas at US$49,870 in 2014. However, these
labour-intensive industries also acted as a drag on productivity, as did the
household registry system known as hukou that was devised to control the
large swathes of migrant workers pouring into the cities, which has had the
effect of supressing workers ability to move to more productive jobs that best
matches their skills.
Country Briefing | 17 Feb 2015
http://www.portal.euromonitor.com.ezproxy.eafit.edu.co/portal/analysis/relatedt
ab
http://acreixell.com/2013/10/21/preguntas-y-dudas-sobre-el-negocio-de-lasbicis-electricas-e-mail-de-un-lector/
http://acreixell.com/2012/12/30/una-empresa-de-excursiones-en-bicicletaelectrica-en-una-ciudad-con-un-centro-historico-interesante/
Household Ownership of Durable Goods by Region | Historic | % of households
nge View
2009
2010
2011
2012
2013
2014
Amazonia
36,5
36,3
35,4
34,5
35,2
35,1
Pacifica
35,5
35,2
34,4
33,5
34,2
34,1
Atlantica
34,5
34,3
33,4
32,6
33,3
33,1
Central
33,7
33,5
32,6
31,8
32,5
32,4
Oriental
32,8
32,6
31,8
31,0
31,7
31,6
Bogota
29,4
29,2
28,5
27,8
28,5
28,4
Total
33,5
33,3
32,5
31,7
32,4
32,3
Colombia
Possession of Bicycle
Colombia
Possession of Bicycle
Unemployed
35,7
35,5
34,6
33,8
34,5
34,3
Employee
33,1
32,9
32,1
31,3
32,0
31,9
32,6
32,4
31,6
30,9
31,6
31,4
Other
35,5
35,3
34,5
33,6
34,4
34,2
Total
33,5
33,3
32,5
31,7
32,4
32,3
Working Conditions
Colombias Labour Code states that employees are expected to work a
maximum of 48 hours per week. This is the longest working week in Latin
America. Exceptions to this law include working teenagers between the ages of
15 and 17 years-old who can work up to a maximum of 30 hours per week with
a maximum work load of six hours per day. As well, working teenagers over 17
years-old may work up to 40 hours per week with a maximum work load of
eight hours per day. In 2010, the minimum wage in Colombia was Col$515,000.
The amount is agreed to every year by the government and the various
working associations in the country. All employers are obliged to provide their
employees with a paid holiday period of 15 working days per year.
The days and hours under which employees normally work vary according to
the nature of the job performed. According to Colombias Labour Code, the 48hour week may be distributed from Mondays to Fridays or Mondays to
Saturdays. A typical working day will commence at 7:30am and end around
5:30pm with a 1.5 hour lunch break. Factory workers often work in shifts. A
typical night shift will start at 10pm and finish at 6am. However, employees
working night shifts get paid a night surcharge of an additional 35% of day
wages. In Colombia, hours worked over the number of the regular working
hours are considered overtime, which may not exceed two hours per day and
12 hours per week. Overtime hours are always compensated with an additional
25% surcharge. Overtime charges do not apply to management or
administrative staff or other salaried workers.
According to a recent study published by Regus, 84% of employers in Colombia
offer flexible working hours to their employees. According to the Labour Code,
employees and employers may agree that the 48-hour work week may be
completed in more than six days and the number of working hours may be
distributed within the week with a minimum of four hours per day and a
maximum of ten. Employees with kids often take advantage of flexible working
hours as they are able to spend more time with their families.
The workplace dress codes vary. Employees working for banks or insurance
companies are required to wear more formal business clothing, although some
companies allow their employees to dress down and wear jeans and casual
clothing on Fridays. Managers in industrial organisations are not required to
dress formally, and they often wear casual pants and shirts to work. Factory
workers and cleaners are usually provided with uniforms that allow them to
perform their jobs in a secure and comfortable manner. However, there has
been a recent trend of companies providing their employees with uniforms at
all hierarchical levels. This trend has been seen most often in the banking and
financial sector as well as in the travel and accommodation sectors. Arturo
Calle, a major apparel company, has estimated that the use of uniforms in the
workplace has grown by 12% per year since 2008. Many employees wear
uniforms because they are subsidised by the employers, allowing them to
spend less for clothing.
Women in the Workplace
There were 6.7 million working women in Colombia in 2010. Women are found
more often working in some sectors rather than others. For example, more
often than not women work as nurses, kindergarten and elementary school
teachers, domestic workers inside family homes, executive secretaries,
physician assistants and receptionists. As well, factory workers in apparel
companies are usually women. In contrast, it is not common for women to work
as bus or taxi drivers, electricians or factory workers in metalworking
industries. According to DANE, 65% of the working women in Colombia are
concentrated in two main sectors: tourism (most employees in hotels and
restaurants are women) and social and community services.
According to the International Labour Organisation (ILO), there are strong
patterns of gender discrimination in the Colombian labour market. DANE
recently revealed that working men earned salaries 26% higher than those of
women in 2010. Unemployment rates for women are also higher than those for
men. In 2010, according to DANE, the unemployment rate for men was 9.2%
while the unemployment rate for women was nearly 16%.
Traditionally, Colombian companies have preferred to hire women for entrylevel positions and men for executive positions. However, this has changed
somewhat as more women have attained higher education qualifications.
Indeed, there are many more women working at various levels in the banking
and finance and tourism sectors. Within manufacturing environments, however,
there are fewer women managers (with the exception of clothing
manufacturing) as many male factory employees would find it difficult to be
supervised by women.
All working women are entitled to 14 weeks of maternity leave. Women may
start to make use of this time two weeks before their due date. The Labour
Code states that maternity leave is also applicable to any woman adopting a
child below the age of seven years-old. In these cases, the due date will be
replaced by the date of the official reception of the child. Once they have
completed their maternity leave and returned to their normal work duties, new
mothers are entitled to two breaks of thirty minutes per day to breastfeed their
children.
Commuting
The most common ways that Colombians get to work are via passenger cars,
motorcycles and public transport. Executives tend to drive their own vehicles to
work and it is not common for them to use public transportation. Some
organisations even provide company cars for the use of general managers. It is
also common for mid-level employees to have their own cars and drive them to
work. Less affluent employees often use public transport or their own
motorcycles. Motorcycles have become very popular among commuters as the
costs related to their use and maintenance are lower than the costs related to
passenger cars. While the number of passenger cars in Colombia increased by
26% since 2005 (reaching a total of two million in 2010) the number of
motorcycles increased by 108% (reaching a total of 2.7 million in 2010).
Only a few Colombian cities have modern urban transport systems. Medellin,
Colombias second-largest city, is the only city with a modern railway system
for urban transport, the Metro de Medellin. According to Metro de Medellin, the
system served more than 159 million passengers in 2010. Other cities, such as
Bogot, Cali, Pereira, Barranquilla, Cucuta and Bucaramanga, maintain rapid
bus systems. These usually consist of several lines and numerous elevated
stations in the centre of main avenues. Typically, two or four lanes down the
centre of the street are dedicated exclusively to bus traffic. In the case of
Bogota, Colombias capital and largest city, 1.6 million passengers per day use
the Transmilenio bus system. Manizales and Medellin also have systems known
as Metrocable. In the remainder of the cities, there are no organised
transportation networks and urban transport is limited to just a number of
buses and transport companies.
Buses are the most common public urban transport vehicles, followed by
busetas. Busetas are buses of a smaller size and lower passenger capacity.
According to DANE, 34% of the passengers that use public urban transport
travel by bus while almost 30% use busetas. The rest of the commuters use
minibuses, also referred to as colectivos and, in the cities where they are
available, urban transport systems. Taxis are considered by commuters to be
expensive and they are usually used only in cases of emergency, such as when
workers are late or if their usual mode of transport is not available.
The average length of a commute to work in Colombia depends on the city.
Commutes in large metropolitan areas, such as Bogota, Medellin and Cali, tend
to average of 38.5 minutes. According to the World Bank, this average would
be 32% higher if these cities did not have modern urban transport systems
such as the Metro de Medellin or rapid bus systems. Commutes in smaller cities
such as Pereira, Cartagena and Bucaramanga average about 25 minutes. The
average cost of commuting also varies depending on the city and of the means
of transport used. In Bogota and Cali, the average cost of commuting in 2010
was Col$$1.70 while in Medellin it was Col$1.75. In other cities, the average
cost of a commute by bus was Col$1.10, Col$1.40 for those commuting in
busetas and Col$1.50 for those commuting in minibuses or colectivos.
Travel by bus in urban areas is mostly informal and operates on a cash basis,
meaning that commuters pay for the service at the time of use. Only in cities
with modern urban transport systems may commuters buy travel permits.
Travel permits are not popular amongst Colombian commuters as they are not
discounted.
It is often difficult to find parking spaces in urban areas and this affects the
commuting decisions of many Colombian workers. Parking in main streets in
city centres is mostly forbidden and unsecure. Some cities have buildings
dedicated to providing parking spaces. Fees may be paid monthly (at an
estimated cost of Col$60) or by the hour, with an estimated value of Col$2.
Some cities have implemented a programme known as Pico y Placa (Peak and
License Plate). This programme restricts private and public vehicles with
license plate numbers ending in specified digits from travelling on city streets
between certain times. These policies are intended to encourage commuters to
use public transport. Additionally, Bogota holds the worlds largest car-free
weekday event, encouraging motorists to give up their car for one day and use
an alternative means of transport.
Cycling is becoming an increasingly popular commuting option in the largest
metropolitan cities of Colombia. Cycling routes can be found in many large
metropolitan cities but smaller cities and towns lack an adequate infrastructure
to promote cycling as a commuting alternative. Bogota offers the most
extensive network of cycling routes, also referred to as ciclorrutas. The network
comprises over 300 kilometres of paths dedicated exclusively to the use of
bicycles. Some Transmilenio Stations (the citys Bus Rapid Transport System)
are integrated with the cycling network through bicycle parking facilities.
Medellin has a shorter cycling network of 33 kilometres, in which 45,000 people
commute every day.
Alternative Work Options
For the most part, Colombian workers tend to want to work in traditional fulltime jobs and alternative work options are not eagerly sought after. According
to Banco de la Repblica, the monthly income of full-time employees is double
the income of part-time or informal employees. In 2010, the average monthly
income of an informal employee was estimated to be Col$550 while for a fulltime employee it was estimated to be Col$1, 050. As well, most of the
alternative work options tend to be informal jobs without access to healthcare
and pension benefits. According to the economic journal Portafolio, by the end
of 2011 there were more than 12.5 million informal workers in the Colombian
labour market, with 8.3 million earning less than the minimal wage.
Between 2005 and 2010, the number of part-time workers increased by just
over 5% to reach 25,300 in 2010. According to DANE, 57% of part-time
employees in Colombia are women. The reason behind this is that men are still
considered to be the main providers of household income in the Colombian
society. Hence, men will accept part-time jobs only on a temporarily basis; they
tend to quit as soon as they find a full-time work that provides more security
and stability. Women, on the other hand, seek out part-time jobs in order to
help increase household income. Many women work as domestic and
housekeeping employees. As well, there are many female part-time workers in
restaurants and hotels and in the public sector.
The number of self-employed Colombians increased by 22% between 2005 and
2010, reaching 8.2 million in 2010. This trend reflects the positive attitude
many Colombians have towards being your own boss. Women often prefer to
be self-employed as it allows them to combine their work with household
chores and looking after their children. Self-employed women often work with
catalogue sales (Ventas por Catlogo) in which they advertise, sell and
distribute a wide range of products, such as cosmetics, diet foods and clothing.
Women get paid on commission based on the volume of their sales. Some
professional men prefer to be self-employed as do younger entrepreneurs who
often decide to take advantage of the subsidies provided by the Colombian
government to start up new businesses. These include bank loans at low
interest rates as well as free advisory services.
Working at home is common only for those who are self-employed. Employers
do not typically encourage full-time employees to work from home. On the
other hand, this is expected to change in coming years and it is projected that
the number of workers working from home will increase by 30% between 2010
and 2020.
Retirement
The number of pensioners in Colombia increased by 24.5% between 2005 and
2010, reaching 4.9 million in 2010. Women accounted for 64% of the total
retired population in 2010. It was estimated that at the end of 2010, 11% of the
Colombian population were pensioners. By 2020, that percentage is expected
to reach 15%. Before 2010, men could retire at the age of 55 years and women
could retire at the age of 50 years, after proving they had worked for a
minimum of twenty years. In 2010, the Ministry of Social Protection increased
the retirement age to 62 years for men and 60 years for women.
Pensions in Colombia correspond to 75% of the average wages earned by the
employee during the last year of work. Although retirement in Colombia is not
compulsory, most employees look forward to this stage of their lives. A high
number of Colombians see their retirement as an opportunity to change their
lifestyles without having to worry about work. This perception is not likely to
change in the future, as most employees tend to retire from work once they
have met the age and working time requirements.
As Colombias healthcare system is seen as inefficient and often providing poor
attention to all patients, pensioners and older adults tend to buy private health
bike lanes. With drivers facing heavy fines, passenger numbers on the citys
TransMilenio bus service rose sharply.
Run for reforestation (February 2015)
On February the 22nd, the Green Race will take place in Bogotas Simon Bolvar
Park as part of efforts to raise awareness of such issues as climate change,
deforestation and biodiversity, as well as the impact of air pollution in urban
areas. This 10km run is being organised by the US embassy in partnership with
the Natura Foundation, which promotes sustainability. Six trees will be planted
for each of the events 5,000 participants as part of a Natura Foundation
campaign called United for the Forest. The race seeks to empower citizens
by raising awareness of the accelerated loss of biodiversity and what this
represents
for
the
green
heritage
of
Colombia,
website
Thecitypaperbogota.com reports.
Colombia named among the coolest travel destinations (January 2015)
Business magazine Forbes has named Colombia as one of the worlds Ten
coolest places to visit in 2015. The list was compiled by Owen Gaddis, luxury
travel manager at travel company Absolute Travel. Improved political stability
and the increased availability of luxury accommodation were cited among the
factors that led to the countrys inclusion. According to Forbes, The country
encompasses everything from pristine Caribbean coastlines, picturesque
cobblestone streets in Cartagena, the exotic Amazon rain forest and seven
UNESCO World Heritage sites to the buzzing metropolis of Bogota and some of
the worlds most vivacious people.
Educational parks aim to tackle inequality and violence (January 2015)
Sergio Fajardo, governor of the north western province of Antioquia, has
initiated a campaign called "Antioquia, the most educated". Through the
provision of educational parks (buildings where education can be safely
delivered), Fajardo aims to tackle such issues as inequality, violence and
corruption. According to Doris Sommer, director of the Cultural Agents Initiative
of the Department of Literature and Romance Languages at Harvard University
in the USA, Educational Parks represent an opportunity to install a new way of
teaching through exploration and experimentation.
Women turn to scooters for transport (January 2015)
According to the newspaper El Espectador, more and more women are opting
for scooters as their main form of transportation. They are perceived as a
practical, stylish and convenient way of getting to work, it adds. Many also use
them for leisure. They are particularly popular in Bogota. Gabriel Valderrama of
scooter-maker Piaggio Colombia says: "Women are more interested in colour,
design and exclusivity than men". A survey conducted by website TuMoto.com
during late 2014 found that the favourite model of local consumers was the
Kymco Agility Naked, followed by the Yamaha BWS 125 and the Akt Dynamic
R12.
coastal city of Cartagena was the highest ranked hotel in the country, largely
due to its location in the citys historic city centre and architectural splendour.
Online advertising market growing rapidly but still relatively small (October
2014)
According to Olga Britt from the Association of Advertising Agencies (IAB) in
Colombia, internet advertising continues to grow in importance. However, she
adds that "Its impact in relation to conventional advertising models remains
relatively small". She warns that old-style online advertising, such as pop ups
and banners, is not only ineffective but annoying to potential customers and
believes that content marketing and digital video represent the future of the
advertising industry in Colombia. According to Euromonitor International data,
online adspend in Colombia rose by 15% during 2013, to US$107 million.
Collaborative consumption taking off (September 2014)
Website Collaborativeconsumption.com looks at the growing number of
collaborative projects in Colombia, especially in Bogota and Medellin. Local
writer Gustavo Palacios notes that "The collaborative-economy concept is still
relatively new, but there is clearly no shortage of interest. Collaborative events
are a sell-out. However, given the high incidence of crime in Colombia,
building trust can be an issue. Local startups include carpooling platform
EasyWay and bike-sharing scheme Pedaleando por Bogota (Riding bikes in
Bogota), while American car-sharing company Uber has a presence in two
Colombian cities Bogota and Santiago de Cali.
Mango magnificence (September 2014)
Richard Campbell and Noris Ledesma travel around the world in search of rare
and exotic fruits to bring back to the Fairchild Tropical Botanic Garden in Miami.
This year they are focusing on Colombia, which is the worlds third-largest
exporter of mango pulp. They are showcasing three Colombian mango
varieties: the Azucar, Colombias national fruit; the Hilacha, a sweet orange
mango; and the Vallenato, a round, reddish mango. Ledesma, who is from
Colombia, noted that Colombians ate mangoes for breakfast, lunch, dinner and
as a snack in between. As Azucar and Hilacha mangoes have a short shelf life,
relatively few of them are exported, so local consumers do not have to share
them with the rest of the world.
Court rules that bullfighting is artistic and culturally significant (September
2014)
The high court has ordered the District Institute of Recreation and Sport to
reinstate bullfighting events at the Santa Mara bullfighting ring in Bogota. The
ruling stated that bullfighting is artistic and part of the national culture. Bogota
Mayor Gustavo Petro said that he was disappointed by the decision, and the
reaction on social media was broadly similar. Despite the growth of the animal
rights movement in Colombia, hundreds of bullfighting events are still held
nationwide every year. However, the number of events has declined markedly
over recent years.
Childhood obesity researchers point finger at TV ads (August 2014)
A study conducted by researchers at the Nutrition and Diet School at the
University of Antioqua during early 2013 has posited a link between TV
advertising and childhood obesity. An examination of 1,560 advertisements
over 52 hours of television found that 23.3% of them were for food and nonalcoholic beverages, with 56.3% of these shown during children's programmes.
Researcher Isabel Carmona told newspaper El Espectador that "Most of these
products are processed foods of very little nutritional value and lack fibre." The
study also found that 38.9% of children aged between five years and 12 years
spent a daily average of between two and four hours watching TV.
Government wants consumers to generate their own electricity (August 2014)
Despite Colombias abundant oil reserves, the government is encouraging
consumers to use more renewable energy. Senator Jos David Name said:
"Colombia needs to assess new sources of energy ahead of a likely energy
crisis in the medium to long term." He added that a new law was aimed at
encouraging citizens "to choose cleaner and more environmentally friendly
energy sources. This law will make it easier for Colombian households to
generate electricity on a small scale (either individually or in groups) and feed
any excess into the national grid. However, weekly newspaper Semana warns
that the country currently lacks the infrastructure to do this.
Say it with flowers (August 2014)
Since 1957, the city of Medelln has celebrated its Silleteros Parade (festival of
the flowers) every August, attracting thousands of tourists with a colourful
array of flowery medallions, locals in traditional costume and dancing. This
festival, which commemorates the end of slavery, sees large flowered
medallions carried through the citys streets by locals. With the region
surrounding Medellin one of the world's largest suppliers of fresh flowers, it is
also something of a showcase for this important local industry.
Football brings the country together (July 2014)
After an absence of 16 years, Colombia returned to the World Cup with a
performance that exceeded the expectations of most football fans. After
victories over Greece, Ivory Coast, Japan and Uruguay, the national team finally
succumbed to hosts Brazil, losing 2-1 in the quarter finals. Moreover,
Colombian striker James Rodriguez was the tournaments top scorer, with six
goals.
Student Pedro Gonzalez commented: "It doesn't matter if you're black or white,
tall or short whatever. Everyone is behind Colombia." However some
lamented a temporary ban imposed on sales of alcohol drinks by the municipal
authorities in Bogota. This was part of efforts to curb post-match violence and
drink-driving.
Traditional Andean foodstuff grows in popularity nationwide (July 2014)
Quinoa, a grain-like crop that is high in protein, has traditionally been
associated with the Andean region of Colombia, but it is now growing in
popularity in kitchens nationwide. As a result, domestic production is booming.
Writing in newspaper El Espectador, chef Harry Sasson notes that quinoa is
increasingly being used as a substitute for pasta, particularly among those
following gluten-free diets. "I must admit I was very impressed with this
product not only healthy but tasty," he wrote.
Mobile phone users freed liberated long contracts (July 2014)
From this month, mobile phone companies are no longer allowed to lock
subscribers into long contracts of 24 months or more. A spokeswoman for the
national communications regulator (CRC) claimed that "This measure will
improve quality of service and help to bring prices down."
Talking to TV channel Caracol, one consumer expressed relief that he would
now be free to switch providers in order to get a stronger mobile signal.
However, another feared that this change would ultimately result in higher
prices as providers moved to protect their profit margins.
Travel boom to the EU in prospect (June 2014)
The EU is to lift visa requirements for Colombians visiting the Schengen Area,
which encompasses most of the 28-country bloc. As a result, visa free travel in
Europe for up to 90 days is expected to become a reality for Colombians from
2015. Under the current regime, getting a visa involves a long and tedious
administrative process that puts many Colombians off visiting Europe.
Speaking to Spanish TV channel RTVE, one travel agency manager in Bogota
commented that many of her clients would be touring Europe as soon as the
visa requirement was lifted. Jean Claude Bessudo from travel agency Aviatur
predicted a 15% bump in travel to Europe.
It's Colombia, not Columbia! (June 2014)
The Wall Street Journal newspaper reports that Colombian digital media
executive Carlos Pardos campaign to make people aware of the correct
spelling of his countrys name has gone viral. The campaign is called Its
Colombia, not Columbia.
As a result, celebrities who have misspelled the countrys name, such as Paris
Hilton, Ozzy Osbourne and Justin Bieber, have been bombarded with messages
via such social networks as Facebook, Twitter, Instagram and Tumblr. Such
brands as Starbucks and media organisations like CNN and the BBC have also
come under scrutiny.
system, with many rural areas underserved, in addition to the elderly and the
unemployed.
Come to Colombia to learn Spanish (March 2014)
A growing number of courses in Colombian universities are teaching Spanish to
foreign tour guides. "The students come from Malaysia, Thailand, Indonesia,
Laos, Cambodia, Myanmar, China, South Korea and Brazil," according to
government official Patti Londoo. These courses last for four months, with the
students staying with local families during that time. This initiative is part of a
government programme launched last year that is designed to promote
Colombia as a place to learn Spanish. Londoo claimed that We have the best
Spanish in the world all Spanish speakers acknowledge that.
Programmes such as this illustrate how improved security is benefitting the
domestic tourism industry. The government is hoping that within a few years,
Colombia will be more famous for its landscape and culture than for drug
smuggling and violent kidnappings.
CrossFit all the rage with gym goers (March 2014)
Website Cromos.com.co reports that CrossFit is growing in popularity in
Colombian gyms. CrossFit is a mixture of aerobic exercise and weight training.
According to fitness expert Juan Rodrguez, it is a short-duration, high-intensity
workout that offers a lot of variation. People particularly enjoy the variety,
doing different things every day, " he said.
CrossFit also has a reputation for being addictive, with some adherents
overdoing it. It has also fuelled a boom in so-called garage gyms that are
sometimes run by trainers with little in the way of formal training, which can
lead to injuries. This has led some to erroneously conclude that the CrossFit
method is unsafe, Rodrguez claimed.
Public transport in Bogota not for the impatient (February 2014)
According to a global survey conducted during late 2013 by Moovit, a free
public transport trip planner for smartphones, Bogota is the fourth worst city in
the world in terms of the amount of time people have to wait for public
transport, after Los Angeles, Rome and Rio de Janeiro. Bogota's public transport
users were found to wait an average of 31 minutes. Overcrowding was also
found to be a major complaint among public transport users in the city. Locals
were found to spend an average of one hour and 42 minutes on public
transport daily the seventh highest figure in the world.
Shortage of IT skills a threat to economic growth? (February 2014)
Speaking to Spanish news agency EFE, Eduardo Rueda of IT company HewlettPackard (HP) warned that a lack of innovation could throttle economic growth in
Colombia. "There is an urgent need to improve the education system and fill
the gap created by a lack of professionals in information and communication
technologies (ICT), he asserted. In response to this, HP is set to launch two
Facebook said: "The market in Colombia is growing rapidly, and people are
increasingly using smartphones to access Facebook.
Teaching computer skills to coffee growers (October 2013)
A significant urban-rural digital divide persists in Colombia. In an effort to
tackle this, the National Federation of Coffee Growers (FNC) is leading a project
to teach small growers IT skills. As part of this initiative, they will learn how to
use computers and tablet devices to enter the FNC's website to find
information on everything from accounting and economic data to legal
assistance. "With this initiative, we hope that every coffee grower will come to
understand the benefits of technology," said Lautaro Spotorno of software
corporation SAP, which is partnering with the FNC in this initiative.
Men more likely to fall behind on their debt repayments (September 2013)
Speaking at the ninth Andean Credit and Collection Conference, which was held
in Bogota during mid-September, Martha Luca Meza of credit firm Covinoc
presented a profile of Colombia debtors, based on her companys portfolio of
123,604 clients. She said that men (who account for 57% of Covinocs client
base) were more likely than women to miss repayments.
She added that those in Cali in the west of the country and Eje Cafetero in the
northeast were more likely to fall into arrears than debtors in other parts of the
country. Euromonitor International data states that the outstanding balance of
consumer lending in Colombia grew by 52.6% in real terms between 2008 and
2012, to US$52.5 billion. 5.2% of this debt was non-performing in 2012.
Electric taxis arrive in Bogota (September 2013)
Electric taxis came into service in Bogota for the first time during early
September. The blue cars are powered by rechargeable batteries, and many
early users were impressed with their lack of noise, making them a more
attractive way to travel for some. They are suitable for cities and contribute
towards a cleaner environment. It is a pity there are not more of them, said
one user.
The city authorities hope that the presence of electric taxis will help to boost
sales of electric cars to private motorists. To this end, electric cars have been
exempted from import duty and some traffic restrictions.
Smartphone users want the latest and the coolest (September 2013)
Speaking to newspaper El Universal, Ricardo Triana of smartphone maker
Huawei claimed that Colombian consumers are getting impatient with their
Android phones. They are no longer fast enough or capable of running the
latest apps. As a result, they are trading up to higher-end models, he said. Ana
Mara Osorio Correa of Sony Mobile added that apart from functionality, the
look of a smartphone also played an important role in purchasing decisions.
However, some holdouts remain. Gonzalo Aguado, who does not own a mobile
phone, told the newspaper that People think I am weird. Value sales of
smartphones stood at US$2.2 billion in Colombia during 2012, up 6.6% on the
previous year in real terms.
Coca Cola taking cold drinks to the next level (August 2013)
Advertising agency Ogilvy & Mather has worked with Coca-Cola to launch a
limited edition coke bottle made out of ice in Colombia. The ice bottles are
made by pouring water into a silicone mould, freezing it at -26.1 degrees
Celsius and then filling the mould with Coke. They are wrapped with red rubber
bands for easy handling. These can be worn as bracelets after the ice melts.
According to the London-based Daily Telegraph newspaper, the ice bottles are
selling at the rate of 265 bottles an hour. However, some wonder if ice bottles
are unsanitary, as they may carry bacteria.
Government seeks to reduce the cost of medicines (August 2013)
In July, Health minister Alejandro Gaviria announced new regulations for pricing
medicines in an effort to curb inflation in this sector. After examining prices in
both Europe and other Latin American countries, the ministry established a
system that sets prices in Colombia at no more than the fourth cheapest
country in Latin America and Europe.
This move came after the Ministry found that 55 of the 59 most popular
medicines in Colombia were more expensive there than in Spain, where the
purchasing power of consumers is much greater. According to Gaviria, lenient
regulations have allowed prices to get out of control over the past decade.
Rise in sales of luxury cars (August 2013)
According to data from the Colombian vehicle registration office (RUNT),
demand for luxury cars boomed during the first quarter of 2013, with 3,906
new high-end vehicles sold. Business magazine La Semana attributes this
growth to the weakness of the US dollar, market liberalisation in the
automotive sector and an increased choice of luxury marques. All of these
factors have helped to push down prices. The most popular luxury marques are
Mercedes-Benz, BMW and Audi, followed by Volvo and Mini.
However, sales of cheaper vehicles fell at an annual rate of 10% during the first
quarter of 2013, according to RUNT. Euromonitor International data states that
the proportion of Colombian households with a passenger car rose from 11.6%
to 14.1% between 2007 and 2012.
Preparing children for a career in tourism (July 2013)
The mayor's office in Bogota has published a booklet to provide local
schoolchildren with a comprehensive overview of Colombia's tourist sector,
dealing with everything from the country's most historic sites to legislation
governing the sector. Called Schools Friends of Tourism, it is hoped that it
will encourage students to pursue careers in the sector.
Luis Fernando Rosas, director of the Tourist Institute (IDT) said: This is a tool to
stimulate future generations to pursue a career in a very promising sector, as
well as strengthening their understanding of the country's heritage. According
to Euromonitor International forecasts, the annual number of tourist arrivals in
Colombia will reach 2.2 million by 2016.
Same-sex unions now legally recognised (July 2013)
Since June, gay couples have been entitled to apply for legal recognition of
their relationships. This follows a Constitutional Court ruling that same-sex
couples are entitled to enjoy the same rights and benefits as heterosexual
couples. Although it remains unclear whether or not these unions will be
deemed marriages, many same-sex couples have begun submitting the
relevant paperwork to the authorities. There are many couples like us in this
country who believe that their relationships have reached a point where they
need to commit to civil marriage, gay rights activist Elizabeth Castillo
commented.
The reinvention of Medellin (July 2013)
Medellin, the second largest city in Colombia, which is located in the northwest
of the country, has been dubbed the most innovative city of the world by the
Wall Street Journal (WSJ) newspaper. Once wracked by drug-related violence,
Medellin's homicide rate plunged by nearly 80% between 1991 and 2010. The
city has built public libraries, parks and schools in poor hillside neighbourhoods,
as well as constructing a network of transportation routes linking these
neighbourhoods to the city's commercial and industrial centres.
According to the WSJ, The local government, businesses, community
organisations and universities have worked together to fight violence and
modernise the city, with a large number of community organisations, health
centres, and youth groups empowering locals to take ownership of their
neighbourhoods.
Tackling sun care myths (June 2013)
In an interview with the daily El Universal, Dr Hernando Harker discussed some
of the more common mistakes made by Colombian consumers with regard to
sun care. These included the fact that many Colombians believe that the higher
the sun protection factor (SPF) of a product, the smaller the quantity they need
to apply; that they only need to apply sun screen once a day; that working
indoors is protection in itself (skin blemishes and alterations can result from the
light emitted by computer monitors, Harker maintains); that most Colombians
are unaware that sunscreen and sun protection are separate things and should
be used together; and that sun protection products lead to skin discoloration.
Chilean mapping software popular with both consumers and businesses (June
2013)
The average age of first marriage for men rose from 27.3 years to 27.7 years
over the same period.
Rising environmental awareness percolating into consumer choices (May 2013)
Demand for environmentally friendly products is growing across a range of
markets in Colombia. Designer Nixa Sierra produces handbags and other
accessories using such materials as vinyl from old records, creating highquality items that are meant to last. We are concerned about the materials we
use and the quality of the items we produce, and we also try to give each of
them a personal and exclusive touch so that consumers grow fond of them and
want to keep them for longer, she says.
Another successful venture is 8M2, a retail outlet located in La Concordia
market in the centre of Bogota. It sells hampers containing a selection of
natural and environmentally friendly products. 8M2 also provides training
services for green businesses in the areas of product design, innovation and
productivity.
More demand for books in English (May 2013)
A survey conducted by Cerlalc (an NGO that aims to promote literacy in Latin
America) during late 2012 found that 67% of Colombians did not read, with
most saying this was simply because they did not like it. However, anecdotal
evidence suggests that a small, but significant, number of Colombians like to
read books in foreign languages. Indeed, in 2012, publishing company
Panamericana launched a new collection of books in English, ranging from
novels to cook books and works on home decoration.
According to Felipe Ossa, director of the national library, increased demand for
books in foreign languages is primarily being driven by the growing number of
expats who have settled in Colombia. We are beginning to see the return of
foreigners to Bogota, he said. He added that the growing number of
Colombians traveling or studying abroad and the growth of bilingual education
were also playing a role in this.
More than half of households now have cable TV (April 2013)
Euromonitor International data states that 52.5% of Colombian households had
access to cable television in 2012, up from 42.5% during 2007. This was the
third-highest figure in Latin America, behind Argentina (57.6% of households)
and Uruguay (57.5%). According to Gary McBride, president and CEO of the
Latin American Multichannel Advertising Council, poorer households have been
the main drivers of growth in cable penetration in Colombia, as most affluent
households already have it. He partly attributes this to increased affordability,
with fierce competition among cable providers driving down prices.
Continuity and change in family life (April 2013)
A study conducted in urban areas by the National Research Centre (CNC)
during 2012 found that most families eat together at least once a day. Men
have grown steadily in Colombia over recent years, increasing by 1.8% in 2012,
to US$167 million.
Recycling containers as fast food eateries (March 2013)
Container City is a new concept in quickservice dining in Bogota. People can
eat pizza, sushi, burgers and many other kinds of fast food in restaurants
housed in recycled containers. Container City took less than three months to
create, at a fraction of the cost of building it in the conventional manner. The
consensus among those who have visited it to date is that it is a fun way to eat,
while also being environmentally friendly.
Celebrating Colombian film (February 2013)
Colombia held its second annual Macondo film awards on November the 22nd,
2012. This year's ceremony was dominated by director Carlos Moreno's Todos
Tus Muertos (All Your Dead Ones), which won five awards, including best film,
best director and best original screenplay. US trade publication Hollywood
Reporter describes it as an oblique allegory for a desensitised society.
Diego Ramirez, vice president of the Colombian Academy of Motion Picture Arts
and Sciences, said the awards were a reflection of the rude health of domestic
film industry. According to Ramirez, The number of people working full time in
the industry has grown exponentially, and this required the creation of a
professional association. Film producers can now express their needs with a
single voice and help the sector to grow and develop.
Ramirez said that the domestic film industry now matched international
standards and that the number of Colombians watching home-produced films
had increased. He added: Domestic films cannot compete with foreign
blockbusters in terms of audience, but apart from this, people are now more
likely to watch a Colombian film than a foreign one. According to Euromonitor
International data, Colombians made 0.7 per-capita trips to the cinema in 2012,
up from 0.5 during 2007.
More in Bogota now walking or cycling (February 2013)
At least half of daily journeys made in Bogota and the Savannah (the plateau in
which the city is located) are made on foot, according to a study conducted
during late 2012 by research company Steer Davies Gleave for the Colombian
Consulting Centre (CNC). The second most popular means of transportation
was public transport, followed by car, taxi, bicycle and motorcycle.
A similar survey conducted in 2005 found that public transport was the most
popular option. Between 2005 and 2012, the popularity of walking increased by
two thirds. The study found that, unsurprisingly, those with the lowest incomes
were the most likely to walk. A 376km network of cycling routes has done much
to boost the popularity of this means of transport in and around the city over
recent years.
Tablet computers to be introduced into schools (February 2013)
Increased consumer interest in sport and fitness is also helping to drive growth
in sales of health and wellness food, such as organic, better for you and
functional/fortified offerings. Some follow the latest dietary fads, such as lowcarb diets (minimising consumption of grains and sugars).
Many are prepared to spend money to boost their performance, by investing in
a lightweight, carbon fibre bike frame or depilation in order to minimise wind
resistance and help them to move faster.
Sport and fitness enthusiasts are increasingly buying gadgets, such as
wristbands and watches, that track their performance, with advances in
technology and falling costs making such devices more practical to carry or
wear and more affordable.
Miniaturisation and the advent of high-definition video have helped to grow the
market for sports video cameras, while the rise of social media websites like
Facebook and such video sharing websites YouTube have made sharing video of
ones sporting activities with others much easier.
High-end smartphones are beginning to incorporate such features as motion
sensors and heart-rate monitoring, while apps relating to sports and fitness are
increasingly popular with smartphone users, particularly those that utilise
global positioning system (GPS) software.
In the long run, advances in smartphone and sensor technology could even put
some coaches out of work by providing real-time feedback on their body
position, for example.
Rather than concentrating on performance, some apps simply aim to make
exercising more fun a trend that has been dubbed gamification.
With a growing number of owners humanising their pets, they want their dogs
to be a part of their sporting lives. This is fuelling a small, but growing, market
for active or high performance pet wear.
Outlook
Urbanisation is set to continue apace over the coming years, particularly in
such emerging markets as China and India. The transition from a
predominantly rural to a predominantly urban demographic profile is usually
closely associated with reduced family size, giving parents more time to focus
on themselves and their own interests.
Urbanisation in these countries will also go hand-in-hand with increasingly
sedentary lifestyles, as employment shifts from manufacturing to the service
sector.
Obesity rates will continue to tend upwards, even in relatively svelte countries
like France and Sweden. The obesity issue is likely to become particularly
prominent in the Middle East.
Challenges
2008 2013
34.1 40.7
Venezuela
28.5 35.0
Mexico
28.5 34.4
32.8 34.1
26.6 33.2
Saudi Arabia
Australia
UK
27.5 28.9
24.3 28.6
24.5 26.6
Russia
24.4 26.3
Argentina
22.7 25.6
Germany
21.8 23.7
Hungary
21.1 22.8
18.2 20.1
17.1 19.0
Bulgaria
17.1 18.9
40.5 40.6
Greece
40.4 39.9
Bulgaria
37.5 39.5
Portugal
38.4 39.0
Norway
37.1 38.9
Venezuela
39.7 38.4
2008 2013
Turkey
UK
37.4 37.9
38.0 37.6
Mexico
38.9 37.5
35.8 36.4
Ireland
35.6 36.3
36.9 36.2
Colombia
36.1 36.0
36.1 35.8
37.1 35.6
scheme allows employers to pay for bicycles and bicycle equipment for their
employees, which the employee pays back through a salary sacrifice
arrangement of up to 12 months, with these repayments exempt from income
tax. All of this is helping to educate consumers on the importance of physical
fitness for their own long-term health and wellbeing, and encouraging them to
become more active.
According to Euromonitor Internationals Global Consumer Trends survey that
covered consumers in eight developed economies and emerging markets, just
over a quarter (25.9%) of consumers agreed with the contention that I am
very worried about my health due to my lifestyle. This figure ranged from less
than one in six consumers in France to 44% in Brazil. In general, consumers in
emerging markets were found to be significantly more worried by this than
their counterparts in developed economies.
Table 3
I am very worried about my health due to my lifestyle Selected
Countries 2011
Proportion of respondents answering yes
Brazil 44.0
China 32.1
France
15.2
Germany
16.2
India 28.6
Japan 31.7
UK
18.9
US
20.4
Taking its cue from Riefenstahls work, Calvin Klein showcased the male form in
ways never seen before and ushered in an era where men could be sexually
objectified (almost) as much as women. Indeed, the billboard of a well-muscled
young man in white briefs went up in Times Square in 1982 has been named
one of the Ten Pictures that Changed America by American Photographer
magazine. Meanwhile, the seminal 1977 documentary film Pumping Iron,
which focused on the burgeoning body building scene in Southern California,
propelled a young Arnold Schwarzenegger to fame, and helped to usher in a
decade where muscle-bound heroes like Schwarzenegger and Sylvester
Stallone dominated the silver screen. By the 2000s, the Hollywood zeitgeist
had shifted towards a subtler look, with an emphasis on muscles appearing
defined and cut, rather than large and bulging, perhaps epitomised by
Canadian actor Ryan Gosling.
In February 2014, the New York Times noted that Because the American movie
market now makes up less than a third of global box-office receipts, studios
tend to favour projects featuring explosions, car chases and doomsday
scenarios a universal language of violence that translates easily in China,
India, Brazil and Europe. Almost without exception, the movies star some
beefcake with pecs that make Ben-Hurs seem puny. There are now more
indistinguishable, barrel-chested, eight-packed aspiring stars than ever. Almost
any actor, even some of Hollywoods most scrawny, can be physically
transformed for the part if hes willing to put in the hard work, it added.
Inevitably, the images presented by mass media percolate down into popular
consciousness, hence the growing fascination of many consumers with
celebrity diets and workout regimes. When a celebrity gossip website reports
that Ryan Gosling is practicing Muay Thai (Thai boxing) for an upcoming role,
the young man in the street is likely to take heed. This trend is also visible in
professional sport just compare pictures of the current generation of elite
sportspeople with their peers a generation or two ago and the differences in
physique are unmistakable.
Sow the seeds of inadequacy, reap body dysmorphia?
Indeed, it can be difficult for the ordinary consumer not to feel vaguely
inadequate when faced with the extremely fit and well-defined physiques
showcased by popular culture (often with the aid of Photoshop), and it is
undoubtedly the case that such feelings of inadequacy are fuelling increased
consumer interest in sport and exercise. For young adults, the emphasis in on
achieving muscle definition, while middle aged and older consumers tend to
focus on maintaining a relatively youthful physique for as long as possible, and
delaying the inevitable physical deterioration that accompanies ageing. During
mid-2013, the UK-based Daily Mail newspaper reported that, Across London
the number of men joining gyms has soared. Five years ago, men accounted for
less than a quarter of gym users in the capital. Today they account for nearly
half.
In extremis, this can spill over into body dysmorphic disorder or body
dysmorphia, the incidence of which appears to have risen over recent decades.
Afflicted individuals think they have a defect in either one or more features of
their body, causing psychological and clinically significant distress or impairing
occupational or social functioning. A related condition is muscle dysmorphia or
bigorexia or the Adonis complex, where sufferers become convinced that
their physique is not sufficiently muscular.
There is a growing insecurity among men about their bodies, commented Dr
John Morgan, a consultant psychiatrist at St Thomass Hospital, told the Daily
Mail newspaper in the UK during mid-2013. A documentary called Vigor that
was screened on Spanish television in mid-2013 claimed that 10% of men who
regularly went to local gyms were afflicted by this condition, and that the abuse
of such drugs as anabolic steroids and human growth hormone by body
building enthusiasts was causing more deaths than anorexia in the country.
Writing in the Guardian in March 2014, columnist Melissa Bradshaw claimed
that The lenses of social media, reality TV and the womens weekly magazine
market (for which there is no male equivalent), seem to make it harder than
ever for women in particular to be content with themselves. Men have to live
up to bodily ideals too, often through athletic achievements, but women are
constantly being scrutinised either for their insecurities, or the way that they
deal with them.
Pot bellies no longer regarding as a sign of affluence in emerging markets
Whereas being slim and fit has long been established as a signifier of
prosperity and wellbeing in the west, until fairly recently this has not been the
case in many emerging markets, such as India and China, where famine is a
relatively recent memory among many families. Writing in the New York Times
in 2011, journalist Ranjani Iyer Mohanty noted that For a long time in India, fat
has meant good. For centuries the ideal Indian woman and child have been
Rubenesque, with no visible bone structure.
However, this is now changing rapidly. In Bollywood, the plump actors and
actresses of the 1970s and 1980s have been replaced by muscular men and
slender women. Meanwhile, Vogue and Harpers Bazaar are among the growing
list of international fashion magazines that publish Indian editions, all
promoting thinness as the beauty ideal.
Female attitudes towards sport shifting
Young women, particularly teens, have traditionally been one of the groups
most resistant to incorporating exercise into their lifestyles a significant
number of teenage girls resort to smoking as a weight-loss strategy, rather
than exercising. Indeed, studies in many countries have found that rates of
smoking prevalence are significantly higher among teenage girls than their
male counterparts.
Femininity versus sportiness?
Many girls are simply not interesting in sport and exercise at this age, often out
of a feeling that vigorous exercise will leave them red, sweaty and unattractive
to the opposite sex. Speaking to the Daily Telegraph in February 2014, Helen
Grant, Minister for Sport in the UK, controversially suggested that women who
felt unfeminine when playing sport could take up other activities, like ballet,
gymnastics, cheerleading and even roller-skating. Speaking to the Guardian,
Laura Bates of the Everyday Sexism project responded: Its actually
discouraging for a minister to say this. With our great athletes performing
fantastically at the Olympics, we still see media outlets focusing on the looks
and femininity, which the comments seem to do too.
A study conducted in the UK during 2012 by the Womens Sport and Fitness
Foundation, using data collected by the Institute of Youth Sport at
Loughborough University, found that just over half (51%) of teenage girls were
put off physical activity by their experiences of school sport and PE lessons.
45% thought that sport was too competitive, while a third thought that PE
teachers only paid attention to pupils who were good at sport. Just under half
(48%) of the girls agreed with the contention that getting sweaty is not
feminine, while almost a third of boys said that girls who were sporty were not
feminine. 76% of girls said they were self-conscious of their bodies. 57% of girls
said that girls often dropped physical activity because their friends did. The
study concluded that Being popular is not defined by being sporty for girls
but it is for boys. Boys receive more encouragement to be sporty from their
friends.
Fit is the new thin
However, there is evidence that such attitudes are beginning to shift, at least in
some countries. As paparazzi shots of female celebrities, particularly actresses,
models and pop singers, running or working out with their personal trainers
proliferate in celebrity magazines and online, for many, being slim is no longer
enough they must be slim and fit. Selfies (photos taken of oneself that are
posted online) have percolated into the mainstream over the past couple of
years, and the gym selfie has become a popular sub-genre, helping to push
the athletic look more into the mainstream.
In the UK, it is hoped that the huge medal haul of British women at the 2012
Olympics in London will act as a catalyst to get young women exercising.
Meanwhile, a growing number of young women are hitting the gym in an effort
to have a beach body to show off once summertime rolls around. All of this is
reflected in the pages of womens fashion and lifestyle magazines, where space
is increasingly being devoted to advice on exercise routines and features on
trendy workout clothes.
Some young actresses are feeling the heat. During December 2013, 23 yearold Oscar-winning actress Jennifer Lawrence (star of the popular The Hunger
Games film franchise) spoke of the pressure actresses were under to be slim,
adding that she thought it should be illegal to call somebody fat on TV. She
has also spoken of the pressure put on her by some of her employers to lose
weight.
Interest among women in extreme sports is also on the rise. In January 2014,
Spanish newspaper El Pas, noted that 2014 is all about extreme challenges.
Merely to be fit is no longer enough not even for women. The piece went on
to cite such examples (illustrated by photos) as actress Jenifer Lopez practicing
the mixed marshal art Krav Maga and model Izabel Goularts love of TRX
(bodyweight exercises performed using elastic cables).
Nonetheless, a significant gender gap remains. For example, a survey of
Euromonitor International analysts conducted during early 2014 found that
male respondents were more than twice as likely as their female counterparts
to have participated in a marathon over the previous five years. Male
respondents were three times more likely to have participated in surfing.
Table 4
Global Participation in Adventure Sports over the Previous Five
Years 2014
% of respondents participating Female
Marathon
4.2
8.5
5.9
7.5
12.2 9.0
9.5
5.9
Adventure race
3.3
6.0
Mountain biking
7.4
16.7 10.4
Trail running
Surfing
3.3
Male Total
4.1
unemployment (among those aged between 15 years and 24 years) had risen
to 15% in the US, 25% in France, 28% in Poland and 43% in Italy by 2013. In
Southern Europe in particular, a growing number of people are still living in the
parental home well into their 30s.
Chart 2
Number of years
2008 2013
21.3 22.8
Australia
20.7 21.3
Norway
19.6 21.0
Taiwan
19.4 20.9
US
19.3 20.6
Mexico
18.2 20.5
New Zealand
19.9 20.5
17.1 20.0
Argentina
18.3 19.8
17.3 19.1
17.7 18.3
Russia
16.6 18.2
Ukraine
16.3 17.8
Vietnam
15.8 17.5
Table 6
2008/2013
Number of years
2008 2013
18.9 19.8
17.7 19.1
Taiwan
17.6 19.1
Sweden
16.0 18.8
New Zealand
17.9 18.5
Canada
17.5 18.3
Norway
16.7 17.6
Mexico
15.6 16.6
14.6 16.4
15.5 16.0
Venezuela
16.0 15.8
14.4 15.6
that separates Cuba from Florida without using a shark cage, on her fifth
attempt. This astounding feat took her more than 53 hours.
Among the current generation of Baby Boomers, it is no longer unusual to find
60- or even 70-somethings engaged in fairly vigorous sporting activities, such
as tennis, cycling, jogging, exercise classes and cross-country skiing. A visit to
almost any gym will also provide ample evidence of the growing popularity of
exercise among older consumers. Future generations are likely to be even more
active.
In a comment thread on the New York Times website that discussed this issue,
one female poster living in Idaho said: Im 54 and have been running since my
20s. [My friends and I] plan to run into the foreseeable future, as well as hike,
backpack, bike, and swim with our husbands. Another added: I can no longer
throw a softball more than a few feet. But at nearly 86 and with an artificial hip
and open-heart 18 months ago, I cycle every day. A 65 year-old said: I hike
the hills with a pack several days per week, rain or shine, swim laps several
days per week, cross-country ski in the winter, bike and backpack in the
backcountry in the good weather.
60-somethings are also participating in triathlons, while there have even been
reports of 70-somethings taking part in ironman races. Naturally, most are
taking to exercise in gentler ways. Swimming is particularly popular with this
age group, especially among those with joint problems (as it is non-weight
bearing), while many also enjoy cycling. Some skiers shift from alpine/downhill
to cross-country skiing as they grow older, as the latter is generally much safer,
particularly in terms of the strain it places on joints.
Concerns about age-appropriate exercise speculative?
Until recently, the conventional wisdom was that running is an unsuitable
activity for older people, but research is emerging to challenge this. In January
2014, the New York Times reported that There is also little evidence to support
the widespread belief that high-impact exercise speeds the onset of arthritis. In
a 2013 study, adult runners, including many aged 45 or older, had a lower
incidence of knee osteoarthritis and hip replacement than age-matched
walkers, with the adults who accumulated the most mileage over the course of
seven years having the lowest risk, possibly, the studys author speculated,
because running improved the health of joint cartilage and kept them lean as
they aged. A lot of concerns about age-appropriate exercise modalities have
turned out to be more speculative than real over the years, commented Dr
Michael Joyner, an exercise physiologist at the Mayo Clinic in Rochester,
Minnesota.
You do what you can until nature says you cant
Commenting on this piece, a number of older people discussed their exercise
regimes. One said: I jog one mile and walk back briskly one mile, six days a
week. Been doing it for about fifteen years. After I return home I lift 50 pounds
10 times standing (curls) and 11 times lying on a weight bench. Im 69. I plan
100.0
Belgium
97.6
Argentina
92.9
Japan 92.5
Israel 92.2
Australia
89.8
Chile 89.7
Venezuela
88.8
Denmark
87.5
France
87.0
New Zealand
Finland
85.9
Taiwan
85.9
Sweden
85.1
86.3
Brazil 85.0
United Arab Emirates
84.6
Netherlands 83.9
South Korea 83.8
US
82.9
Saudi Arabia
82.7
Canada
81.0
Norway
80.6
UK
79.9
Mexico
78.7
Spain 78.1
Peru 77.9
Colombia
75.8
Germany
74.3
Russia
74.0
called white collar boxing, where men in professional occupations (the legal
and financial sectors, for example) participate in what has traditionally been a
working class sport. White collar boxing events have sprung up everywhere
from New York City and London to Moscow and Cape Town. There is even an
American reality TV show called White Collar Brawlers.
In an October 2013 report on the white collar boxing scene in London, the BBC
noted that A mid-life crisis used to mean buying a pair of trousers that are too
fashionable for the wearer, or doing something different with your hair.
Wealthier 30-somethings might have bought a motorbike, and the truly
reckless would flirt with the girl in accounts. But somewhere along the line it
became mandatory for middle-aged men (and some women) to assert their
undiminished vigour by taking on an extreme challenge: run a marathon, climb
Kilimanjaro, swim the Channel, that kind of thing.
It added that There has clearly been an element of inflation at play here a
concept that City workers should be comfortable with because fighting a
stranger in front of 400 spectators is what you do when a triathlon... Speak to
anybody involved in British boxing and they will tell you white-collar boxing is
growing fast, it noted.
You are not your job
This kind of activity forms a central theme of the 1999 film Fight Club (based
on a novel by Chuck Palahniuk), where the protagonist finds nihilistic relief from
the ennui of his job as an insurance assessor by forming an underground
fighting club. To quote one of its most famous monologues: You are not your
job. You are not how much you have in the bank... the things you own, end up
owning you. Its only after youve lost everything that youre free to do
anything. Fight Club represents that kind of freedom.
The rise of experiential consumption
Closely related to this reaction against sedentarism is an increased desire for
experiential consumption on the part of many consumers. For some,
experiences are becoming increasingly important, while such status symbols as
large homes and cars are becoming less so. Others want both. At the more
extreme end, these experiences can range from recreating a stage of the Tour
de France in the Alps, open water swimming and iron man events to a host of
so-called adventure races, like Tough Mudder (where participants tackle a
military-style assault course), which barely existed five years ago. In a January
2013 report, the Financial Times noted that, A regular Tough Mudder is one lap
of a boggy 10- to 13-mile obstacle course, designed by British Special Forces
personnel to push participants up to and beyond their physical and mental
limits.
In late 2012, the New York Times noted that About 25,700 others participated
[one] October weekend in an ordeal in Englishtown, New Jersey, known as
Tough Mudder, an extreme obstacle course that is becoming the macho sport
of choice for Type A men (and some women) who find marathons too easy and
triathlons meh... Along with other quasi-military obstacle courses like the
Spartan Race and Warrior Dash, Tough Mudder is the new gauntlet for bodyconscious Gen Xers.
Their hands are soft
It added that, The common motivator could be called the Walter Mitty
weekend-warrior complex. While the races draw a fair share of endurance
athletes and ex-military, many of the muddiest, most avid, most agro
participants hail from Wall Street. 30 year-old Bryan Garlick, an analyst at
Merrill Lynch in New York City, told the newspaper: Having competed in both,
triathlons are boring and road races are even more boring. Tough Mudder is the
only chance for a guy like me to feel like King Leonidas. According to Tough
Mudder founder Will Dean, Finance people are in a weird juxtaposition. They
may make 100 times more than their fathers, but their hands are soft. We
designed Tough Mudder to fill that void.
In a world where many people are increasingly connected to the virtual world,
such activities can perhaps help to ground them in the real one. Team work and
camaraderie tend to play a big role in such events, with participants urging
each other on and even helping one another out when they falter over a
particularly difficult obstacle. Indeed, some obstacles cannot be surmounted
without team work. The New York Times noted that Male bonding figures
prominently. The bonhomie is reinforced by challenges like the Everest and
Berlin Walls, which require the men to work together and, in some cases, stand
on one anothers shoulders. There are many one-arm bro-hugs, and even some
full embraces.
Tough Mudder has enjoyed phenomenal growth over recent years. Founded as
recently as 2010, over a million people had participated by the end of 2013. In
2012, it began to hold events in Western Europe. Dr Robert Heasley, a
sociology professor at the Indiana University of Pennsylvania and the president
of the American Mens Studies Association, commented: Obstacle courses like
these are the physical representation of masculinity, which is lacking for people
like lawyers, doctors, bankers and others in softer careers. By associating
themselves with the military and military training, these men are becoming
masculine by association, he added.
Welcome to hell
In Ireland, team sports like GAA (Gaelic football and hurling), soccer and rugby
all remain popular (in terms of both participation and viewing), while a growing
number of people are signing up to participate in long-distance ocean swims,
triathlons and adventure races. One adventure race held in Dublin during 2013
involved urban orienteering, a cycling treasure hunt, kayaking and abseiling.
Some adventure races have colourful names, like The Lough Derg Monster in
Killaloe, County Clare, and the Beast of Ballyhoura in Ballyhoura, County
Limerick. There is even a Tough Mudder Event planned for Ireland (in addition
to seven in the neighbouring UK) during 2014.
Similarly, in Spain, ocean swims and trail running events (such as the Soplao
10,000 off-road running and biking event, and the Reinosa winter triathlon
which encompasses running, cycling and cross-country skiing in the northern
province of Cantabria) have proliferated over recent years. The eighth edition
of the former event is due to be held in 2014. Moreover, the 2014 Soplao event
has been expanded to incorporate a 10km ocean swim for the first time. Those
who finish the gruelling course (which involves a significant ascent) gain the
right to call themselves a saploaman (or woman). 8,000 people from all over
Spain participated in this event, dubbed El infierno Cantrabo, (Cantabrian
hell) in 2013.
Experiential consumption can also play an important role in managing stress.
Euromonitor Internationals Global Consumer Trends survey found that 71% of
respondents in nine countries considered limiting daily stress levels to be either
very important or important to their health.
Table 8
Germany
UK
US
French film District B13, which featured parkour in many of its action scenes.
He then sought out YouTube clips of the sport to learn the techniques required.
With home internet access increasingly ubiquitous and mobile internet access
increasingly commonplace, the vast majority of the population are now internet
users in most developed markets, while the number is growing rapidly in
emerging markets. Relatively low-cost smartphones and tablet devices are
playing a key role in this. In China, for example, the number of internet cafs is
beginning to decline as smartphones become increasingly affordable to massmarket consumers and become their primary device for going online. There
were more than 278 million internet subscriptions in China during 2013
(making it second only to the US), up from a mere seven million in 2008.
Table 9
2008/2013
% of population
2008 2013
Norway
90.6 95.8
Sweden
90.0 95.1
Denmark
85.0 93.8
83.7 92.1
New Zealand
UK
72.0 91.3
78.4 88.7
Canada
76.7 88.4
78.0 85.2
France
70.7 85.0
66.0 84.2
Australia
71.7 84.0
Austria
72.9 82.6
Slovakia
66.1 82.0
US
74.0 81.9
Ireland
65.3 81.4
63.0 86.9
Million people
US
2008 2013
26.5 292.7
China 7.3
278.2
1.0
90.8
Brazil 3.5
90.3
Russia
25.7 89.3
India 3.2
72.1
15.1 51.1
Germany
13.6 37.6
France
11.4 37.4
Italy
8.1
35.6
Spain 3.1
28.1
Egypt 5.4
27.4
Australia
7.5
Poland
12.9 22.2
Canada
3.3
21.7
Vietnam
2.3
19.7
16.0
Turkey
14.1
0.8
25.7
posted online. While such cases are extreme, they do illustrate the increasing
importance of sport in the self-identities of a growing number of consumers.
For some, sport is now a way of differentiating themselves from the herd and
being identified as being part of an elite, adding meaning to their lives. Some
sociologists argue that such striving is an extension of the hypercompetitivity
that is integral to a globalised economy.
In search of virgin snow
A desire among consumers to differentiate themselves through their sporting
activities and prowess, and to experience something unique is evident in the
growing popularity of off-piste skiing. In January 2014, the Financial Times
observed that The sport has changed. Once, off-piste skiing was an activity
reserved for a tiny elite, something practised only when conditions were ideal.
That has changed with growing pace over the past decade, as new wider,
specially shaped skis have made it easier for relative novices to master deep
powder. It added: The result has been an explosion in the number of off-piste
skiers... the overriding sense is If I dont ski it now, someone else will. Virgin
snow is only virgin once.
Euromonitor Internationals Global Consumer Trends survey found that more
than three quarters of consumers in nine countries considered regular exercise
to be either very important or important. This proportion of respondents
considering exercise to be very important was highest in Brazil, India and
China, and lowest in Russia and Japan.
Table 11
Germany
UK
US
For a significant number of middle aged and older consumers, delaying the
ageing process is a major driver of participation in sport. In some countries,
most notably Japan and Germany, the median age of population is now over 40
years. As the global population ages, this demographic is becoming
increasingly important. Apart from health, vanity undoubtedly plays a
significant role in this, as consumers seek to maintain a fit appearance
particularly among the growing population of middle-aged singles. For
example, the number of divorced persons in the US rose by 8%, to just over 32
million, between 2008 and 2013, while in Germany, it grew by 9%, to 6.7
million.
Chart 5
up to 20 new climbers through the door each day... it is just one of the 10-15
new public climbing walls that open in the UK each year.
For some, such sports can be about getting a taste of danger while remaining
in a relatively safe environment. Indoor climbing is the safest way to do what
people perceive to be an extreme sport, in a relatively benign environment,
according to Rob Adie, the climbing walls officer for the British Mountaineering
Council. Its a bit like watching Formula One on the TV. It has also definitely
replaced gym use its a social experience, rather than just being stuck on a
treadmill, he added. In the past five years theres been a massive boom in
bouldering-only centres many climbing wall owners are finding there are a lot
of indoor climbers now who will never go outdoor climbing, he said.
One poster on the newspapers website commented: Not a cheap pastime but
incredibly sociable and people do pass on tips on routes and technique with
cheerful ease. Indoor climbing is also a sport in which a family or group of
friends can do it together and not be bothered that one is far better or more
experienced than the others as you climb at your individual level and improve
your grade. Another said: Its nice do to something where youre encouraging
each other, working together and supporting each other. However, what
attracts me most is that its really sociable and friendly.
A third added: The rise of indoor climbing has helped make this sport much,
much more accessible for the average person. Especially those of us without
cars, money for trips to Fontainbleu, or loads of free time. Those who moan
that indoor climbers arent doing it right if they choose not to or arent able to
climb outdoors should concentrate on themselves and worry less about what
other people are doing!
According to data published by Sport England in late 2013, the number of
participants in mountaineering in England rose from 67,000 to 77,000 between
2005/2006 and 2012/2013. Over the same period, the number adults
participating in canoeing increased from 36,500 to 43,000. Meanwhile,
participation in more traditional sports like tennis, football and rugby (both
union and league) fell.
Chart 8
2012/13
decade-plus. It had almost 137,000 members in 2012, with more than a third
of these (37%) female. Moreover, between 2000 and 2012, the number of
triathlon clubs in the US surged from a mere 50 to almost 1,000. US Triathlon
credits the introduction of triathlon into the Olympic Games in Sydney during
2000 as a major catalyst of this growth. It also notes that for some participants,
the ego boost provided by identifying oneself as a triathlete is an incentive.
The image of triathlon in the US was further boosted in early 2014, when the
NCAA (National Collegiate Athletic Association) approved triathlon as a fullscholarship, emerging sport for women.
Table 12
Number of clubs
2000 50
2005 375
2006 523
2007 544
2008 593
2009 624
2010 869
2011 938
2012 985
Source: 2012 US Triathlon Demographics Report
For some, such activities are more of a lifestyle than a sport, as many serious
triathletes train twice a day. Speaking to the Irish Times newspaper in June
2013, one expat triathlete living in Dubai said: It started off as a personal
challenge to do something for myself and get fit. I knew it was going to get
tough. Training in the summer involved going to bed at 6pm on weekends and
getting up at midnight to cycle through the desert to avoid the extreme heat.
You have no social life.
There are also a growing number of adventure race/triathlon hybrid events,
combining cycling and running with kayaking, rather than swimming, for
example. Shorter course events designed to gently ease beginners into the
sport are also proliferating. For example, the rather ambitiously named Hellfire
Adventure Duathlon, which was held in County Wicklow in Ireland during March
2014, consists of a relatively benign 17km cycle sandwiched between two 3km
runs. According to the races website, Its short enough for beginners looking
to dip their toe into adventure racing. US Triathlon notes that the largest
growth continues to be at the shorter sprint distances.
Endurophilia and masochism
At the other end of the spectrum, there is also increased participation in iron
man races, which involve a 3.9km swim, a 180km cycle and a 42km run (a full
marathon), and ultramarathons events where participants sometimes run
hundreds of kilometres over several days. One example of this is the 250km
Marathon Des Sables, which takes place in Morocco every April. Participants in
these types of events have even been dubbed endurophiles by some. The
marathon is no longer the pinnacle of sporting machismo, the Guardian noted
in 2009. Life is sanitised, effortless and risk free. Doing challenging sports
events is a way of altering this dull existence, one poster on this article
commented.
A growing army of iron men (and women)
In November 2013, website Triathlete-europe.competitor.com reported that
demand for iron man racing in Europe had reached a record high, noting that
most 2014 races in the region were already full. It added that Over 45,000
athletes racing in 2013, up 12% on last year. Kevin Stewart, managing
director of Ironman UK & Ireland, said: It is very likely all three UK events will
be sold out by Christmas. The UK has the largest number of participants racing
both on home and European soil over 8,000.
Can you handle a tough mudder?
Adventure races like Tough Mudder have grown rapidly in popularity in the US
over recent years and are spreading to Western Europe, with 20- and 30something men their core market. Tough Mudder is 15-20km course
incorporating hardcore military-style obstacles, including barbed wire, icecold water and even live electric wires, with names like the Arctic Enema and
Electroshock Therapy. According to the company, Tough Mudder is designed
to challenge strength, stamina, mental grit, and camaraderie. Tough Mudder
founder Will Dean has even been dubbed the Mark Zuckerberg of obstacle
racing.
In a report on this trend published in January 2014, the New Yorker magazine
noted that Young men have long engaged in tribal rituals of passage to test
courage and toughness... The overgrown adolescents of America have come up
with their own substitutes. It added: The popularity of obstacle races owes
something to the broader trend towards functional fitness, which
encompasses the likes of CrossFit, P90X, and boot camps. The idea is to
reclaim athleticism from the sanitised realm of the elliptical machine and get
back to the basics that kept our prehistoric forebears fit. In this light, it is
analogous to such dietary trends as the Paleo Diet, which attempts to mimic
how those same prehistoric forebears ate.
A Euromonitor International Analyst Pulse Survey conducted during early 2014
found that 12% of respondents in North America had participated in an
adventure race during the previous five years significantly higher than the
global rate (4.1%).
Chart 11
Participation in Adventure Races over the Previous Five Years by
Region 2014
2008 2013
84.7 85.3
Finland
85.0 85.0
80.8 81.5
Germany
79.5 80.9
Austria
74.0 79.3
Vietnam
77.4 77.4
Taiwan
73.2 75.3
74.4 74.6
68.4 72.5
Hungary
65.4 66.3
Slovakia
64.5 66.2
UK
63.7 65.7
Denmark
61.8 63.8
Poland
63.6 63.1
Ireland
61.4 62.8
2009 19.6
2010 20.5
2011 20.0
2012 19.7
Source: COLIPED
A study conducted by consultancy Millward Brown SMG/KRC during 2013 found
that Polish consumers bought more than one million bicycles in 2012, a quarter
more than in 2008. The most popular brand was found to be Kross, followed by
Arkus & Romet, Giant and Merida. 70% of respondents said they rode a bicycle
at least once during 2012, while 22% said they used one regularly. Speaking to
newspaper Gazeta Wyborcza, Tomasz Radzki of bike retailer Velo noted that
Cycling infrastructure is improving every year. He added that hybrid bikes (a
combination of mountain bike and road bike) were growing in popularity with
local consumers.
A Euromonitor International Analyst Pulse Survey conducted during early 2014
found that 11% of respondents had participated in mountain biking during the
previous five years. In North America, 28% of respondents had participated in
this activity.
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Table Of Contents
EXECUTIVE SUMMARY
Demand factors
Consumer behaviour
Commercial impact
Market opportunities
Outlook
DEMAND FACTORS
Growing awareness of obesity risks raises the perceived payoff from sport
The changing shape of role models
Female attitudes towards sport shifting
Shifts in Family Structure and Life Stages
Increasingly active retirees
Urbanisation and sedentarism have profound lifestyle impacts
The rise of experiential consumption
EXECUTIVE SUMMARY
Demand factors
Obesity is increasingly identified as a public health issue, receiving a huge
amount of media coverage. This has helped to raise public awareness of the
importance of exercise in general and participative sport in particular. This
issue is particularly acute in Anglo-Saxon societies, but its profile is on the rise
worldwide.
Partly as a result of this, governments around the world have initiated a myriad
strategies to encourage consumers to exercise more, for example through
increasing funding for public sports facilities or providing tax incentives.
Scientific research, particularly in the emerging field of epigenetics, has shed
some light on how exercise and health are related, and these results are
percolating into the public consciousness. One Swedish study found that even a
single session of vigorous exercise began to alter DNA methylation in genes in
a way that reduced the risk of developing diabetes.
and 1980s), with trail running growing in popularity and many events
oversubscribed.
Running is also growing in popularity in China and India, where marathons are
proliferating. However, poor air quality and security concerns lead many to
prefer running on treadmills in gyms.
Sharply increased rates of unemployment in such countries as Spain and
Ireland have left many consumers with more time on their hands, encouraging
them to spend more time running or in the gym, or to take up a new sport,
such as surfing.
The internet, particularly social networks, have helped to popularise such niche
or fringe sporting activities as muggle quidditch (a terrestrial version of a game
from Harry Potter), live-action role playing and zombie runs, while such as
films as The Hunger Games have helped to revive interest in archery.
Some young hipsters have embraced such sports as ptanque, a type of bowls
beloved by elderly men in French provincial towns, and even shuffleboard.
Commercial impact
Price competition among gyms and sports clubs has grown fiercer as
disposable incomes have been squeezed in many developed economies. This
has facilitated the rise of no-frills gyms. Nonetheless, membership continues to
grow in spite of the prevailing climate of economic uncertainty.
At the other end of the market, specialised boutique gyms that charge
premium prices are proliferating in large cities, such as New York and London.
These classes, which cover everything from ballet and pole dancing to spinning
(static cycling) tend to be particularly popular with women.
Consumers are seeking to maximise their performance and are increasingly
prepared to pay for specialised coaching and training to achieve this. Some use
coaches as more of a motivational tool, while others see it as an investment in
their long-term health and wellbeing. Some in North America even go so far as
to claim that coaches are the new therapists.
Sportswear sales have consistently outperformed the wider apparel market
over recent years, with outdoor clothing particularly popular. Sales of sportsinspired clothing, particularly yoga pants, have also been strong, as sportswear
becomes increasingly acceptable as daywear.
In a similar vein, sneaker culture is highly developed in many developed
economies and is spreading to emerging markets, such as China and the Czech
Republic. Running shoes have even begun to turn up in couture fashion shows.
Increased consumer interest in sport is also driving strong growth in demand
for sports equipment everything from bikes, surfboards and wetsuits to
sunglasses, and high-tech watches and heart-rate monitors. Affluent 30- and
40-somethings, particularly men, have been the main drivers of this. High-end
bicycles costing upwards of US$10,000 are particularly notable in this regard.
Off-trade consumption of sports drinks rose by 16% in volume terms between
2008 and 2013, in spite of the fact that evidence for their efficacy is somewhat
lacking at least for recreational athletes. In China, the fastest growing market
for sports drinks, they are usually perceived as functional drinks for young
consumers performing sports activities or watching sports events.
Off-trade consumption of energy drinks rose by 78% between 2008 and 2013.
Although sports participants tend not to be the primary market for these
products, some consume an energy drink before a workout in order to give
their energy level a short-term boost. Energy drink manufacturers, particularly
Red Bull, have spent a lot of marketing money to associate their brands with
extreme sports.
Products targeting those interested in sport and exercise are a growing niche
within the wider market for vitamin and dietary supplements. Demand for
sports supplements is growing, as mainstream consumers seek to enhance
physical properties, such as muscle mass, strength and endurance. However,
this area can be murky and is frequently controversial.
Having seen their heroes use performance enhancing drugs to get to the top in
sports as varied as baseball and cycling, it is perhaps unsurprising that such
products are growing in popularity with recreational athletes in spite of their
potentially harmful side effects. Products that help to build muscle, such as
human growth hormone (HGH) and anabolic steroids are used by some young
male gym goers who want to bulk up.
The market for sports nutrition has spread beyond its traditional core of
bodybuilders and extreme athletes to encompass a growing number of
mainstream consumers. Young men who are insecure about their physiques
have become a particularly lucrative market for sports nutrition.
The marketing of protein as a recovery product in powder, bar or drink form
has been a major driver of growth. Manufacturers have also worked hard to
dispel the idea that protein builds muscle mass leading to bulkier frames,
something that is off-putting to many women.
Market opportunities
Long blurry, the distinction between sportswear and leisure wear continues to
fade. Whereas once, sportswear-as-daywear was looked down upon as the
preserve of the shell-suited lower class, a growing number of middle class yoga
enthusiasts proudly wear their Lululemon yoga pants to the supermarket or the
caf.
Designer sportswear, such as Adidas by Stella McCartney, is also proliferating,
while fast fashion retailers are also launching sportswear collections. High-end
clothing has long been a feature of the skiwear market, but has now spread to
cycling.
Baltimore-based brand Under Armour has enjoyed great success selling figurehugging, performance sportswear in the mass market, particularly in the US.
It is also vigorously pursuing female consumers.
Traditionally, active travel has involved such activities as hiking, cycling and,
particularly, winter sports, but it is now much broader. Committed amateur
athletes are increasingly travelling both domestically and internationally to
train and receive specialised coaching, or to participate in events.
Enthusiastic amateurs are also increasingly travelling overnight or even
internationally to compete in events. They are sometimes after the cachet that
goes with participating in particularly hard-core events.
Many fitness fans are seeking to improve the quality of their food consumption
in order to maximise their energy levels eating more fruit and vegetables and
less meat (or substituting white for red meat), for example. Sports and fitness
fans also tend to show considerable interest in so-called superfoods.
Increased consumer interest in sport and fitness is also helping to drive growth
in sales of health and wellness food, such as organic, better for you and
functional/fortified offerings. Some follow the latest dietary fads, such as lowcarb diets (minimising consumption of grains and sugars).
Many are prepared to spend money to boost their performance, by investing in
a lightweight, carbon fibre bike frame or depilation in order to minimise wind
resistance and help them to move faster.
Sport and fitness enthusiasts are increasingly buying gadgets, such as
wristbands and watches, that track their performance, with advances in
technology and falling costs making such devices more practical to carry or
wear and more affordable.
Miniaturisation and the advent of high-definition video have helped to grow the
market for sports video cameras, while the rise of social media websites like
Facebook and such video sharing websites YouTube have made sharing video of
ones sporting activities with others much easier.
High-end smartphones are beginning to incorporate such features as motion
sensors and heart-rate monitoring, while apps relating to sports and fitness are
increasingly popular with smartphone users, particularly those that utilise
global positioning system (GPS) software.
In the long run, advances in smartphone and sensor technology could even put
some coaches out of work by providing real-time feedback on their body
position, for example.
Rather than concentrating on performance, some apps simply aim to make
exercising more fun a trend that has been dubbed gamification.
With a growing number of owners humanising their pets, they want their dogs
to be a part of their sporting lives. This is fuelling a small, but growing, market
for active or high performance pet wear.
Outlook
Urbanisation is set to continue apace over the coming years, particularly in
such emerging markets as China and India. The transition from a
predominantly rural to a predominantly urban demographic profile is usually
closely associated with reduced family size, giving parents more time to focus
on themselves and their own interests.
Urbanisation in these countries will also go hand-in-hand with increasingly
sedentary lifestyles, as employment shifts from manufacturing to the service
sector.
Obesity rates will continue to tend upwards, even in relatively svelte countries
like France and Sweden. The obesity issue is likely to become particularly
prominent in the Middle East.
The gym market will continue to polarise between high-end boutique
establishments and much cheaper, no-frills ones.
The growth of a new middle class in emerging markets will fuel consumer
interest in sports and exercise. The fact that crime rates are high in many
emerging market cities will favourably dispose many of them towards gym
membership, as it is regarded as safer than running on the streets. Such
markets are ripe for the development of low-cost gym chain.
Emerging clinical evidence suggests that although exercise is important for
maintaining cardiovascular wellbeing, it is not a panacea for a healthy lifestyle
and certainly not an antidote to an unhealthy diet. If such an idea were to gain
currency among consumers, their incentive to exercise vigorously could be
diminished. Some may conclude that regular brisk walks and more time spent
doing housework and gardening are just as beneficial.
The surface is just being scratched in terms of the use of technology in
participative sport and exercise. Such emerging technologies as Google Glass
(glasses that incorporate a computer screen), smart contact lenses and
wearable technology (eg apparel containing electronic devices, including
sensors) are likely to find numerous applications in the field of sports and
exercise over the coming years.
However, wearable tech also risks prompting a backlash among consumers,
some of whom maintain (rather tongue-in-cheek perhaps) that they do not
want to become cyborgs.
A number of studies have been published that provide a much greater degree
of clarity on how exercise can drastically alter how genes operate though not
the genes themselves and that these changes can be passed on to ones
offspring. This raises the fascinating prospect that the intensive exercise is not
only of benefit to the exerciser but also to their future offspring potentially
providing a whole new level of motivation to those who pursue vigorous
training regimes.
In a world where even young children now being pushed towards structured
sporting activities rather than unstructured play, and a growing number of
people aspire to being ironmen or ultramen, some may push back by
dropping out and moving away from such notions of rank and status.
Combined with the emerging neuroscience and philosophy of mindfulness, with
its emphasis on being present in the moment, this could undermine interest
in specialised equipment, apparel and technology designed to improve
performance. This impulse towards simplicity is reflected in increased interest
in barefoot running.
Summary 1 Global Participative Sport: Opportunities and Challenges
Opportunities
Challenges
Sports and
been quite
sports.
particularly
Table 1
2008/2013
2008 2013
34.1 40.7
Venezuela
28.5 35.0
Mexico
28.5 34.4
32.8 34.1
26.6 33.2
27.5 28.9
24.3 28.6
24.5 26.6
Russia
24.4 26.3
Argentina
22.7 25.6
Germany
21.8 23.7
Hungary
21.1 22.8
18.2 20.1
17.1 19.0
Bulgaria
17.1 18.9
Table 2
2008/2013
40.5 40.6
Greece
40.4 39.9
Bulgaria
37.5 39.5
Portugal
38.4 39.0
Norway
37.1 38.9
Venezuela
39.7 38.4
2008 2013
37.4 37.9
38.0 37.6
Mexico
38.9 37.5
35.8 36.4
Ireland
35.6 36.3
36.9 36.2
Colombia
36.1 36.0
36.1 35.8
37.1 35.6
Brazil 44.0
China 32.1
France
15.2
Germany
16.2
India 28.6
Japan 31.7
UK
18.9
US
20.4
However, this is now changing rapidly. In Bollywood, the plump actors and
actresses of the 1970s and 1980s have been replaced by muscular men and
slender women. Meanwhile, Vogue and Harpers Bazaar are among the growing
list of international fashion magazines that publish Indian editions, all
promoting thinness as the beauty ideal.
Female attitudes towards sport shifting
Young women, particularly teens, have traditionally been one of the groups
most resistant to incorporating exercise into their lifestyles a significant
number of teenage girls resort to smoking as a weight-loss strategy, rather
than exercising. Indeed, studies in many countries have found that rates of
smoking prevalence are significantly higher among teenage girls than their
male counterparts.
Femininity versus sportiness?
Many girls are simply not interesting in sport and exercise at this age, often out
of a feeling that vigorous exercise will leave them red, sweaty and unattractive
to the opposite sex. Speaking to the Daily Telegraph in February 2014, Helen
Grant, Minister for Sport in the UK, controversially suggested that women who
felt unfeminine when playing sport could take up other activities, like ballet,
gymnastics, cheerleading and even roller-skating. Speaking to the Guardian,
Laura Bates of the Everyday Sexism project responded: Its actually
discouraging for a minister to say this. With our great athletes performing
fantastically at the Olympics, we still see media outlets focusing on the looks
and femininity, which the comments seem to do too.
A study conducted in the UK during 2012 by the Womens Sport and Fitness
Foundation, using data collected by the Institute of Youth Sport at
Loughborough University, found that just over half (51%) of teenage girls were
put off physical activity by their experiences of school sport and PE lessons.
45% thought that sport was too competitive, while a third thought that PE
teachers only paid attention to pupils who were good at sport. Just under half
(48%) of the girls agreed with the contention that getting sweaty is not
feminine, while almost a third of boys said that girls who were sporty were not
feminine. 76% of girls said they were self-conscious of their bodies. 57% of girls
said that girls often dropped physical activity because their friends did. The
study concluded that Being popular is not defined by being sporty for girls
but it is for boys. Boys receive more encouragement to be sporty from their
friends.
Fit is the new thin
However, there is evidence that such attitudes are beginning to shift, at least in
some countries. As paparazzi shots of female celebrities, particularly actresses,
models and pop singers, running or working out with their personal trainers
proliferate in celebrity magazines and online, for many, being slim is no longer
enough they must be slim and fit. Selfies (photos taken of oneself that are
posted online) have percolated into the mainstream over the past couple of
years, and the gym selfie has become a popular sub-genre, helping to push
the athletic look more into the mainstream.
In the UK, it is hoped that the huge medal haul of British women at the 2012
Olympics in London will act as a catalyst to get young women exercising.
Meanwhile, a growing number of young women are hitting the gym in an effort
to have a beach body to show off once summertime rolls around. All of this is
reflected in the pages of womens fashion and lifestyle magazines, where space
is increasingly being devoted to advice on exercise routines and features on
trendy workout clothes.
Some young actresses are feeling the heat. During December 2013, 23 yearold Oscar-winning actress Jennifer Lawrence (star of the popular The Hunger
Games film franchise) spoke of the pressure actresses were under to be slim,
adding that she thought it should be illegal to call somebody fat on TV. She
has also spoken of the pressure put on her by some of her employers to lose
weight.
Interest among women in extreme sports is also on the rise. In January 2014,
Spanish newspaper El Pas, noted that 2014 is all about extreme challenges.
Merely to be fit is no longer enough not even for women. The piece went on
to cite such examples (illustrated by photos) as actress Jenifer Lopez practicing
the mixed marshal art Krav Maga and model Izabel Goularts love of TRX
(bodyweight exercises performed using elastic cables).
Nonetheless, a significant gender gap remains. For example, a survey of
Euromonitor International analysts conducted during early 2014 found that
male respondents were more than twice as likely as their female counterparts
to have participated in a marathon over the previous five years. Male
respondents were three times more likely to have participated in surfing.
Table 4
Global Participation in Adventure Sports over the Previous Five
Years 2014
% of respondents participating Female
Marathon
4.2
8.5
5.9
7.5
12.2 9.0
9.5
5.9
Adventure race
3.3
6.0
Mountain biking
7.4
16.7 10.4
Trail running
Surfing
3.3
Male Total
4.1
The timing of the progression from childhood to adulthood has shifted radically
over recent generations. Many young people are delaying marriage and
starting families (often into their 30s) in favour of staying in education, building
their careers or simply having fun. Average age at first marriage is now over 30
years in much of Western Europe (32.8 years for men and 30.2 years for
women in Germany during 2013, for example). Fertility rates are also on the
wane, with the number of children born per female in the US falling from 2.1 in
2007 to 1.9 in 2012, for example.
The so-called great recession that followed in the wake of the global financial
crisis has helped to entrench this trend towards delaying some of the
responsibilities of adulthood by making it increasingly difficult for young adults
(particularly in North America and Western Europe) to move out of the parental
home and achieve financial independence. For example, the rate of youth
unemployment (among those aged between 15 years and 24 years) had risen
to 15% in the US, 25% in France, 28% in Poland and 43% in Italy by 2013. In
Southern Europe in particular, a growing number of people are still living in the
parental home well into their 30s.
Chart 2
The global rates of participation in the related sports of windsurfing and kite
surfing stood at 2.8% (ranging from 5.3% in Asia to 0% in Latin America) and
1.9% (ranging from 2.9% in Europe, the Middle East and Africa to 0% in Latin
America and the US, Canada and the Caribbean), respectively.
Increasingly active retirees
As the Baby Boomer generation (those born between 1946 and 1964) begin to
retire, attitudes towards exercise and sporting participation are beginning to
shift among the elderly (those aged 65 or older). This generation lived through
the fitness boom of the 1970s and the 1980s, when such activities as jogging
and aerobics grew significantly in popularity. As a result, they tend to be more
interested in exercise than previous generations, and are looking forward to a
long and active retirement.
Retirement goes from years to decades
With life expectancy now approaching or exceeding 80 years in many
countries, and healthy life expectancy at 60 years now close to 20 years in
many developed economies, retirees are becoming more confident asking more
of their bodies than a round of golf. For example, in the US, healthy life
expectancy at age 60 rose from 17.7 years to 19.1 years for men in the US
between 2008 and 2013. For women, it increased from 19.3 years to 20.6 years
over the same period. In Australia during 2013, a 60 year-old woman could
expect a further 21.3 years of good health.
Table 5
2008/2013
Number of years
2008 2013
21.3 22.8
Australia
20.7 21.3
Norway
19.6 21.0
Taiwan
19.4 20.9
US
19.3 20.6
Mexico
18.2 20.5
New Zealand
19.9 20.5
17.1 20.0
Argentina
18.3 19.8
17.3 19.1
17.7 18.3
Russia
16.6 18.2
Ukraine
16.3 17.8
Vietnam
15.8 17.5
Number of years
2008 2013
18.9 19.8
17.7 19.1
Taiwan
17.6 19.1
Sweden
16.0 18.8
New Zealand
17.9 18.5
Canada
17.5 18.3
Norway
16.7 17.6
Mexico
15.6 16.6
14.6 16.4
15.5 16.0
Venezuela
16.0 15.8
14.4 15.6
a 2013 study, adult runners, including many aged 45 or older, had a lower
incidence of knee osteoarthritis and hip replacement than age-matched
walkers, with the adults who accumulated the most mileage over the course of
seven years having the lowest risk, possibly, the studys author speculated,
because running improved the health of joint cartilage and kept them lean as
they aged. A lot of concerns about age-appropriate exercise modalities have
turned out to be more speculative than real over the years, commented Dr
Michael Joyner, an exercise physiologist at the Mayo Clinic in Rochester,
Minnesota.
You do what you can until nature says you cant
Commenting on this piece, a number of older people discussed their exercise
regimes. One said: I jog one mile and walk back briskly one mile, six days a
week. Been doing it for about fifteen years. After I return home I lift 50 pounds
10 times standing (curls) and 11 times lying on a weight bench. Im 69. I plan
to continue this regimen as long as I can. It helps me control my type-two
diabetes. According to a second, As a 64 year old who has run for half his life
without joint problems, I can attest to the positive effects of high impact
exercise. I dont run as far as I used to (3-5 miles a run), and I use yoga to keep
my joints limber. A third added: Began running in 1970 at age 40. Im
currently still running and competing at age 83 significant slowing after 75.
Annual mileage peaked around 2,700, now about 1,800. You do what you can
until nature says you cant, an 86 year-old cyclist commented.
Urbanisation and sedentarism have profound lifestyle impacts
The advent of lifestyles where most people do not spend their working day
engaged in physical labour of one sort or another is a very recent development
in human history. Urbanisation has helped to accelerate this change
transferring billions of people from the countryside to the towns. This change,
which was sparked by the industrial revolution in the late 18th century, has
largely been completed in the developed world, but it is still very much ongoing
in emerging markets, particularly India and China. Indeed, a milestone was
reached in China a couple of years ago, when its rapidly expanding urban
population eclipsed its rural population for the first time ever.
In some countries, such as Belgium and Japan, over 90% of the population was
urbanised by 2013. Meanwhile, in countries as varied as the US, Denmark,
Morocco and Malaysia, the rural population is declining in absolute terms. For
example, the rural population in the US decreased from 56 million to 54 million
between 2008 and 2013. Over the same period, its urban population grew from
248 million to 262 million. This process is set to accelerate during the coming
years, with the rural population of the US forecast to decline to 53 million by
2018. The main driver of this is the fact that the young are leaving rural areas
in significant numbers to go the cities, leaving a disproportionately elderly
population behind.
Table 7
100.0
Belgium
97.6
Argentina
92.9
Japan 92.5
Israel 92.2
Australia
89.8
Chile 89.7
Venezuela
88.8
Denmark
87.5
France
87.0
New Zealand
Finland
85.9
Taiwan
85.9
Sweden
85.1
86.3
Brazil 85.0
United Arab Emirates
Netherlands 83.9
South Korea 83.8
US
82.9
Saudi Arabia
82.7
Canada
81.0
Norway
80.6
UK
79.9
Mexico
78.7
Spain 78.1
Peru 77.9
Colombia
75.8
Germany
74.3
84.6
Russia
74.0
Germany
US
% of population
2008 2013
Norway
90.6 95.8
Sweden
90.0 95.1
Denmark
85.0 93.8
83.7 92.1
New Zealand
UK
72.0 91.3
78.4 88.7
Canada
76.7 88.4
63.0 86.9
Germany
78.0 85.2
France
70.7 85.0
66.0 84.2
Australia
71.7 84.0
Austria
72.9 82.6
Slovakia
66.1 82.0
US
74.0 81.9
Ireland
65.3 81.4
Million people
US
2008 2013
26.5 292.7
China 7.3
278.2
1.0
90.8
Brazil 3.5
90.3
Russia
25.7 89.3
India 3.2
72.1
15.1 51.1
Germany
13.6 37.6
France
11.4 37.4
Italy
8.1
35.6
Spain 3.1
28.1
Egypt 5.4
27.4
Australia
7.5
Poland
12.9 22.2
25.7
Canada
3.3
21.7
Vietnam
2.3
19.7
16.0
Turkey
14.1
0.8
more couples into my office, Karen Gail Lewis, a counsellor in Cincinnati, Ohio,
told the Wall Street Journal in 2011. There have even been cases of divorce by
triathlon. The article went on to discuss the case of 46 year-old father-of-three
Jordan Waxman, a New Jersey-based banker and amateur ironman who at one
time spent up to two hours each weekday and up to five or six hours each
Saturday and Sunday training. His wife and family eventually staged an
intervention to get him to exercise less.
Nor is such enthusiasm solely confined to men, although it is more
commonplace. In November 2013, the UK-based Daily Mail newspaper reported
that 35 year-old Los Angeles resident Lea-Anne Ellison continued to pursue a
vigorous regime of cross training (including pull-ups and weight lifting) until
three days before the birth of her child. For some, she achieved a degree
notoriety when photos of her lifting heavy weights while heavily pregnant were
posted online. While such cases are extreme, they do illustrate the increasing
importance of sport in the self-identities of a growing number of consumers.
For some, sport is now a way of differentiating themselves from the herd and
being identified as being part of an elite, adding meaning to their lives. Some
sociologists argue that such striving is an extension of the hypercompetitivity
that is integral to a globalised economy.
In search of virgin snow
A desire among consumers to differentiate themselves through their sporting
activities and prowess, and to experience something unique is evident in the
growing popularity of off-piste skiing. In January 2014, the Financial Times
observed that The sport has changed. Once, off-piste skiing was an activity
reserved for a tiny elite, something practised only when conditions were ideal.
That has changed with growing pace over the past decade, as new wider,
specially shaped skis have made it easier for relative novices to master deep
powder. It added: The result has been an explosion in the number of off-piste
skiers... the overriding sense is If I dont ski it now, someone else will. Virgin
snow is only virgin once.
Euromonitor Internationals Global Consumer Trends survey found that more
than three quarters of consumers in nine countries considered regular exercise
to be either very important or important. This proportion of respondents
considering exercise to be very important was highest in Brazil, India and
China, and lowest in Russia and Japan.
Table 11
Germany
UK
US
participation in more traditional sports like tennis, football and rugby (both
union and league) fell.
Chart 8
2012/13
extreme) sports are fairly easy to fit into busy schedules, as they do not have
set training times.
Explosion in triathlon participation
Membership of British Triathlon Association, which currently has more than 500
affiliated clubs, increased from 6,400 in 2004/2005 to 15,274 in 2011/2012,
with the annual rate of growth accelerating to double digits by the end of this
period. In 2012, there were 856 registered triathlon events in England, Wales
and Scotland, with over 149,000 people participating, up by 6% on the previous
year.
Chart 10
Number of clubs
2000 50
2005 375
2006 523
2007 544
2008 593
2009 624
2010 869
2011 938
2012 985
Source: 2012 US Triathlon Demographics Report
For some, such activities are more of a lifestyle than a sport, as many serious
triathletes train twice a day. Speaking to the Irish Times newspaper in June
2013, one expat triathlete living in Dubai said: It started off as a personal
challenge to do something for myself and get fit. I knew it was going to get
tough. Training in the summer involved going to bed at 6pm on weekends and
getting up at midnight to cycle through the desert to avoid the extreme heat.
You have no social life.
There are also a growing number of adventure race/triathlon hybrid events,
combining cycling and running with kayaking, rather than swimming, for
example. Shorter course events designed to gently ease beginners into the
sport are also proliferating. For example, the rather ambitiously named Hellfire
Adventure Duathlon, which was held in County Wicklow in Ireland during March
2014, consists of a relatively benign 17km cycle sandwiched between two 3km
runs. According to the races website, Its short enough for beginners looking
to dip their toe into adventure racing. US Triathlon notes that the largest
growth continues to be at the shorter sprint distances.
Endurophilia and masochism
At the other end of the spectrum, there is also increased participation in iron
man races, which involve a 3.9km swim, a 180km cycle and a 42km run (a full
marathon), and ultramarathons events where participants sometimes run
hundreds of kilometres over several days. One example of this is the 250km
Marathon Des Sables, which takes place in Morocco every April. Participants in
these types of events have even been dubbed endurophiles by some. The
marathon is no longer the pinnacle of sporting machismo, the Guardian noted
in 2009. Life is sanitised, effortless and risk free. Doing challenging sports
events is a way of altering this dull existence, one poster on this article
commented.
A growing army of iron men (and women)
In November 2013, website Triathlete-europe.competitor.com reported that
demand for iron man racing in Europe had reached a record high, noting that
most 2014 races in the region were already full. It added that Over 45,000
athletes racing in 2013, up 12% on last year. Kevin Stewart, managing
director of Ironman UK & Ireland, said: It is very likely all three UK events will
be sold out by Christmas. The UK has the largest number of participants racing
both on home and European soil over 8,000.
Can you handle a tough mudder?
Adventure races like Tough Mudder have grown rapidly in popularity in the US
over recent years and are spreading to Western Europe, with 20- and 30something men their core market. Tough Mudder is 15-20km course
incorporating hardcore military-style obstacles, including barbed wire, icecold water and even live electric wires, with names like the Arctic Enema and
Electroshock Therapy. According to the company, Tough Mudder is designed
to challenge strength, stamina, mental grit, and camaraderie. Tough Mudder
founder Will Dean has even been dubbed the Mark Zuckerberg of obstacle
racing.
In a report on this trend published in January 2014, the New Yorker magazine
noted that Young men have long engaged in tribal rituals of passage to test
courage and toughness... The overgrown adolescents of America have come up
with their own substitutes. It added: The popularity of obstacle races owes
something to the broader trend towards functional fitness, which
encompasses the likes of CrossFit, P90X, and boot camps. The idea is to
reclaim athleticism from the sanitised realm of the elliptical machine and get
back to the basics that kept our prehistoric forebears fit. In this light, it is
analogous to such dietary trends as the Paleo Diet, which attempts to mimic
how those same prehistoric forebears ate.
A Euromonitor International Analyst Pulse Survey conducted during early 2014
found that 12% of respondents in North America had participated in an
adventure race during the previous five years significantly higher than the
global rate (4.1%).
Chart 11
Participation in Adventure Races over the Previous Five Years by
Region 2014
but small activist groups are pressuring town halls across the country, the
newspaper noted.
Professional success burnishes cyclings image in the UK
In the UK, the success of its athletes in the Olympic Games and the Tour de
France over recent years has played a role in encouraging more people to take
to the roads on two wheels. In August 2012, the Daily Mail newspaper claimed
that the success of Team GBs female cyclists, such as Victoria Pendleton, at
the London Olympics, had led to a surge in sales of womens bikes. In the
wake of Team GBs triumphant fortnight in the London 2012 Olympic velodrome
and road races, bicycle retailers, including Halfords (which sells a range of
Victoria Pendleton bikes that have proven very popular), Evans and Bobbin
Bicycles have reported steep increases in enquiries and sales for womens
models, it reported.
In January 2014, the Financial Times newspaper reported that at UK retailer
Halfords, Like-for-like cycle sales were up nearly 20% at the end of last year.
Premium bike sales rose 31%, while childrens bike sales increased nearly
15%. It noted that The Olympics-inspired cycling boom continues to power
cycle sales. Bike brands fronted by Olympians Victoria Pendleton and Chris
Boardman have performed particularly well at Halfords. Writing in the wake of
the Olympics in September 2012, Observer columnist Elizabeth Day observed:
Over the last fortnight, our screens have been filled not with the usual diet of
size-zero actresses and surgically enhanced reality TV stars but with women
who are proud to look powerful, who have muscles and who arent afraid to
sweat and pant their way to a gold medal.
Tax incentive plays key role in Ireland
In Ireland, a tax incentive has helped to revive cycling as a leisure pursuit. By
the early 1990s, cycling was on life support as a leisure activity in Ireland, but
it has enjoyed a remarkable revival over the past decade or so. Under the Cycle
to Work Scheme, an employer can pay for bicycles and bicycle equipment for
their employees. The employees pay this back through a salary sacrifice
arrangement of up to 12 months. Crucially, the employee is not liable for taxes
on these repayments effectively subsidising their purchase (up to 52% for
those paying the top rate of income tax).
During the mid-1990s, membership of Cycling Ireland had fallen to not much
more than 2,000, and in 2006 it was still below 4,000. The Cycle to Work
Scheme was launched in 2009, and by 2013, membership had surged to more
than 18,000. This growth looks even more impressive when the depressed
state of the Irish economy since 2008 is taken into account. As with the
previously discussed example of Spanish surfing, there may be an element of
funemployment at play here.
In spite of this growth, levels of bicycle ownership in the UK and Ireland remain
a long way behind the Scandinavian countries, Finland and particularly the
Netherlands, where bicycles tend to be used more in day-to-day life.
Table 13
2008/2013
%
2008 2013
84.7 85.3
Finland
85.0 85.0
80.8 81.5
Germany
79.5 80.9
Austria
74.0 79.3
Vietnam
77.4 77.4
Taiwan
73.2 75.3
74.4 74.6
68.4 72.5
Hungary
65.4 66.3
Slovakia
64.5 66.2
UK
63.7 65.7
Denmark
61.8 63.8
Poland
63.6 63.1
Ireland
61.4 62.8
Out of a population of just under 200,000, there are 375,000 bicycles, and 50%
of all trips are made by bike, it noted.
Recession hits bike sales in Europe
According to European trade group COLIPED, 19.7 million bicycles were sold in
Europe during 2012. This figure peaked at 21.3 million in 2007. Given the
economic context, this represents a reasonably robust performance. Germany
and the UK were the largest markets in 2012 (accounting for 20% and 18% of
unit sales, respectively), followed by France (14%), Italy (8%), the Netherlands
and Poland (both 5%) and Spain (4%). The average price paid for a new bike in
2012 ranged from 724 in the Netherlands and 513 in Germany to 305 in the
UK, 278 in France, 268 in Italy and 260 in Spain.
Table 14
Million units
2007 21.3
2008 20.2
2009 19.6
2010 20.5
2011 20.0
2012 19.7
A study conducted by consultancy Millward Brown SMG/KRC during 2013 found
that Polish consumers bought more than one million bicycles in 2012, a quarter
more than in 2008. The most popular brand was found to be Kross, followed by
Arkus & Romet, Giant and Merida. 70% of respondents said they rode a bicycle
at least once during 2012, while 22% said they used one regularly. Speaking to
newspaper Gazeta Wyborcza, Tomasz Radzki of bike retailer Velo noted that
Cycling infrastructure is improving every year. He added that hybrid bikes (a
combination of mountain bike and road bike) were growing in popularity with
local consumers.
A Euromonitor International Analyst Pulse Survey conducted during early 2014
found that 11% of respondents had participated in mountain biking during the
previous five years. In North America, 28% of respondents had participated in
this activity.
Chart 12
Participation in Mountain Biking over the Previous Five Years over
the Previous Five Years by Region 2014