Opportunities and challenges faced by the artificial turf industry
1) The opportunity for steady development of the global artificial turf market
Artificial grass turf can meet the needs of all-weather and high-intensity sports, with simple maintenance and various excellent properties, widely used in various sports venues and leisure places. It has multiple performance indicators similar to natural lawns and has been widely recognized for its many advantages.
From 2017 to 2023, the compound growth rate of market size and demand will be about 8.74% and 9.16% respectively, indicating considerable market space. After the domestic industry matures, regulatory efforts will increase and technological barriers will become prominent. Leading enterprises can occupy market share based on their scale and brand advantages. Under the background of combining sports and education, the demand for leisure artificial grass in kindergartens and primary and secondary schools has expanded. Due to the special audience's high requirements for product quality and health, there are currently few high-end artificial grass product enterprises, and the market is in short supply.
2) Opportunities for new formats in the sports industry
The domestic sports industry started late and there are few sports venues that meet the standards. However, in recent years, encouragement policies have been introduced to promote the growth of demand for artificial turf. Internationally, the stable growth in demand for sports venue installation in developing countries has brought incremental demand. Although developed countries have many sports venues and early installation, they have high requirements for product quality and performance, and a high frequency of updates and replacements, creating a considerable demand for stock replacement.
(2) Challenge of artificial grass
1) Challenges posed by new demands such as customized and environmentally friendly artificial turf products
The changes in the global economy, living environment, and market maturity have led to new developments in consumers' awareness and acceptance of artificial turf. In terms of product types, consumers of leisure landscape grass have an increasing demand for customization and personalization, requiring companies to enrich their product types and enhance their technological reserves; The requirements for the performance of sports grass products in sports field paving are also increasing, and they need to perform outstandingly in multiple aspects.
At the same time, artificial grass turf belongs to the category of chemical rubber products and faces environmental issues. The mainstream turf rubber SBR styrene butadiene rubber has complex and difficult to recycle components, and the regulations for the disposal of waste turf are becoming stricter, resulting in higher landfill costs. Waste turf brings environmental challenges, and manufacturers need to consider how to balance environmental recycling with product quality and performance.
2) Challenges in the International Trade Environment
The globalization level of the artificial turf industry is relatively high, and the main production areas and consumption regions of turf products are not consistent. According to statistics, 35.11% of the global trade in artificial turf is currently cross regional trade. The import and export policies and regulations of various countries and regions are constantly changing, which requires manufacturers to adjust product design, procurement, manufacturing, and testing according to policies, thereby increasing product costs. In addition, trade protectionism has been on the rise in developed countries. If there are trade frictions between countries in the sales area of artificial turf products and China in the artificial turf industry, it will have a certain adverse impact on the development of the industry.
5. The position and role of industries in the industrial chain and their correlation with upstream and downstream industries
The main raw materials for producing synthetic turf include plastic particles such as PE (polyethylene) and PP (polypropylene), base cloth, masterbatch, and glue. The upstream industries of the artificial turf industry are mainly the petroleum and petrochemical industries. The development of the petroleum and petrochemical industry is relatively mature, with sufficient product supply and relatively transparent prices, but it is easily affected by various factors such as international situation and shipping, which directly affects the cost and gross profit margin of artificial lawn enterprises.
In the downstream industry, the demand for artificial turf products mainly comes from sports field paving, urban landscape decoration, and personal decoration for residents. The downstream market size of the artificial turf industry is mainly influenced by factors such as the level of investment in national and social sports infrastructure, the paving plans of enterprises and municipalities for landscape scenes, and the willingness and ability of consumers to improve the residential landscape environment.