India is set to host the 13th edition of the ICC Cricket World Cup after 12 years on home soil starting from October 5. The mega sporting event will see 48 matches spread over the next 45 days. As cricket is the most popular sport in India with a significant viewer base, consumption and media activity will be at its peak, which is already evident in flight/hotel rates, advisory firm Jefferies said in a note.
While the country is rooting for a win in the home venue, investors and brands are also expecting a strong December quarter riding on the sporting fever that is coinciding with the festive season.
This year marks the 13th edition of cricket World Cup and will see 10 teams playing 48 matches over 45 days. The last edition (2019) saw 750 million unique viewers and 14 billion hours of total viewing time. Nearly 12 lakh visitors attended the World Cup matches in person in the stadium in 2011 when India last hosted the event with an average attendance of 25,000 viewers per match.
Jefferies said that while overall consumption should see an upside, there will be winners and losers. Of the 16 weekend days in the next two months, nearly half will see an India match or semi-final/finals. On India match days, there should be a negative impact on footfalls for movie theatres, theme parks, and offline brick-and-mortar retailers. On the other hand, the event should provide a boost to food delivery, quick commerce, alcobev, soft drinks, media, online gaming etc. We expect companies to run world-cup-specific promotions on match days to tap this consumption boost, it said in the note.
Brand activity
World Cup has been a key marketing platform for brands across categories. The first World Cup hosted by India in 1987 was co-branded as ‘Reliance Cup’, while the 1996 version was called ‘Wills World Cup’ due to sponsorships by Reliance and ITC, respectively. Several brands have announced World Cup tie-ups this time too and we expect a surge in media activity in coming weeks, Jefferies said.
India is Cricket and Cricket is India
Cricket’s popularity is evident from the fact that four out of the top 10 most-followed sportspersons globally on Instagram are Indian cricketers, with Virat Kohli leading the pack. The sports industry in India attracts sizeable sponsorship and media spending, totalling $1.8 billion per year, which has grown at 14 percent CAGR in the past decade, the Jefferies release said. Cricket alone accounts for 85 percent of these spends, while all other sports combined account for only 15 percent. Cricketing events attract $900 million annually in media spending, which is 8 percent of the overall advertising spend in the country. It also sees $550 million spending per year in team/on-the-ground sponsorships, according to the release.
Cricket’s growth in India has accelerated rapidly in the last decade, led by the IPL. In fact, the controlling body for cricket in India, BCCI, has seen its revenue grow 10x in the last 16 years, reaching $800 million in FY23. India’s dominance in the sport is also reflected in BCCI’s revenue, which is almost equal to the combined revenue of all other full member countries and 2x of ICC itself. BCCI has also seen the fastest growth over the past decade, the advisory firm added.
Gain for some, loss for others
The World Cup is likely to impact consumption trends over the next two months, which also marks the important festive season in India. Overall consumption may see an upside due to the World Cup, albeit there will be categories that benefit while some others may be adversely impacted, according to Jefferies.
Interestingly, India will play 9 group stage matches over the coming 45 days, of which 6 are being held on weekends, which see high consumption. Further, of the 16 weekend days in the next two months, nearly half will see an India match or the World Cup semi-final/finals.
On India match days, there could be a negative impact on movie theatres, theme parks, and offline brick-and-mortar retailers. On the other hand, it would be a tailwind for bars & restaurants, beverages (alcoholic & non-alcoholic), food delivery, quick commerce and e-commerce platforms, who would also organise their festival events, it said.
Flight and hotel rates surge
Jefferies India hotels and airlines analyst, Prateek Kumar, notes that on India match days, fares have shot up on average by 150 c/80 percent for selective hotels/flights compared to the week prior to match day, with some rates up to the extent of 13x/5x.
While major cities are seeing significant increases in hotel rates, hotels in smaller venues like Dharamsala are completely sold out for multiple days. The rooms are booked for players, support staff, cricket board officials, media etc. apart from booking from spectators. Checks with reservation desks of many hotels in bigger cities also indicate that occupancies for match days are already running high which has resulted in rates rising sharply and rates are likely to mostly increase further closer to match dates.
The World Cup event also coincides with the seasonally strong Q3 for the hospitality industry and the same is likely to benefit both hotels/airlines industry in Q3. Further, airlines are reportedly eyeing cap adds to target the traffic rush.
World Cup impact on consumption across categories
The advisory firm has categorised the impact of the mega sporting event of firms across sectors According to the recommendations: In the food delivery segment: Zomato (positive); in the QSR/restaurants segment: Jubilant Food, Westlife, Devyani, Sapphire, Restaurant Brands Asia, Barbeque Nation (Slightly Positive); alcoholic beverages segment: United Spirits, United Breweries, Radico Khaitan, Sula Vineyards (Positive), in the movie/theatres segment: PVR-Inox (Negative); in theme parks: Wonderla, Imagicaaworld (Negative); in the hotels segment: Indian Hotels, Lemon Tree (Positive); in the airlines segment: Interglobe Aviation (Positive); in the apparel retail/brands segment: Shoppers Stop, Trent, Aditya Birla Fashion, Page Industries, Reliance Retail (Slight Negative); in jewellery segment: Titan, Kalyan Jewellers, Senco Gold (Slight Negative); in e-commerce segment: Nykaa (Slightly Positive); in media arena: Zee Entertainment, HT Media, DB Corp (Positive) and in gaming segment: Nazara (Positive).
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