WILL THE MALAYSIAN RUNNING BUBBLE BURST?Introduction: The idea to write this article originated from witnessing so many new running events,as well as, new organisers emerging rapidly in the past 18 months alone. The continuous media announcements of new seem endless and overwhelming. On the one hand, although, it is nice for runners to have more running options from which to choose, I seriously wonder if the demand for events can keep-up with the growing supply. Yes, granted there are many neighbourhood joggers in the country, but there are far less runners who are willing to pay and join a running event. Surely, if the situation is left unchecked, the competition among event organisers, to grab their share of the limited pool of runners, will, one day, be so fierce that there will be a situation of over-supply of events. At this stage, the bubble will burst; it is difficult to predict how the event organisers (or the suppliers) will react to survive or will they simply cut their loses and close shop. Such situation of market uncertainty does not augur well for the running community in general because a healthy market depends on certainty to thrive. No new sponsors or investors will be willing to invest in a risky and volatile market. While those who are willing to invest under such risky conditions, are only those greedy profiteers looking for quick, short-term profits, and usually, at the expense of the consumers (or the runners). So, are my fears unfounded or is there some element of truth in my above-stated concerns. Read on and judge for yourself.
Why Are There Suddenly So Many More Local Running Events & Newly Emerging Event Organisers?
In Malaysia, the amateur and professional sports associations or registered sports clubs are bounded by the rules; regulations set and overseen by the local, state or central government under the big umbrella of the Ministry of Sports. In the commercial running industry, however, the rules of engagement is largely dictated by the market forces of supply and demand. With minimum capital outlay and without a track record or related working experience, any private company can easily organise a public running event, and earn a quick business profit by charging a registration fee for participation, and by finding companies who are all-too-keen nowadays to sponsor running events to market their brand, products and services. As industry stalwart and race director of Twenty First Century Sports, Mr. Nithi Vegayathunam remarked, why should companies advertise through large inactive billboard displays when they can invest in and sponsor a running event which can directly impact the health and lives of their existing or potential customers as race participants in a positive way.
Then, how can the new and inexperienced running event organisers compete effectively against their more established and experienced rivals to capture a share of the running market? By leveraging on the power of the internet and social media platforms, any computer-savvy company can promote their running events to their targeted audience effectively and inexpensively. As long as you have a registered company, you can conduct all your event promotions, marketing, registration and even payment online at a relatively low cost. In effect, you do not even need a high-cost physical office to operate. All you really need is a computer and an internet connection to conduct your race organisation.
More and more new players are setting-up shop as event organisers because firstly, they can see the strong growing demand for local running events, and secondly, because they know that the market barrier to entry is low as characterised by minimum regulatory red-tape, low operation costs and little expertise requirement. In the worse scenario, if these new organisers fail to deliver a good event on race day, it will not affect their bottom line because they have already collected the registration fees in advance. As a consumer, the paying participants can do very little if the race is badly organised, apart from boycotting the next event organised by that company.
Is A Free Market Good?
I have no problem with organisers making a reasonable profit in return for organising a decent event. My only concern of this kind of unregulated (free) market is that, if every company is only pursuing their own commercial interests, then who will be looking after the longterm interest of the weekend runners? Moreover, since the market is so fragmented with different organisers following different agendas; formats, and there are no common performance goals or benchmark for them to measure against. In such a case, how can the standard of running events improve in Malaysia? Is this why we see so many organisers repeat the same mistakes over and over again? Is this why we see only 20% of the event companies control 80% of the total events?
Is this current running boom sustainable or will certain unscrupulous organisers put runners off from registering for events by charging high fees for shoddy services?
Where does all the extra profits end-up? Are adequate profits being reinvested by the industry players to improve their quality of service, the race facilities and runner’s safety? We cannot expect businesses to reinvest into making races better when there is no mandate to do so. Therefore, I think the time is right to objectively re-look at the commercial running market, and propose a Best Practice Policy to raise the minimum standards and practices of all running event organisers to encourage a steady sustainable growth.
Through my own investigations, I aim to highlight the running arena’s strengths and weaknesses, and find-out how we could help and contribute positively to nurture and encourage the sustainable growth of running events in the country to benefit runners and our communities. If there is a real problem, we should work together and address it professionally to suggest improvements.
Easy Come & Easy Go
I hate to disappoint you, but there will be no spectacular burst of bubble in the future of running because even a free market, absent of any worthy regulation, has in-built deflationary valves to ease the pressure when the system is overheating. With free competition, the strongest organisers will survive by reducing their registration fees and/or increase the value of their services to attract more runners to “buy into” their events. The weaker organisers who cannot make enough profits to cover their cost will eventually die of natural causes. So, whereas there is no bubble to burst per say, there is, however, a revolving-door through which new prospective organisers and sponsors will enter, and through the same door, the uncompetitive and unsuccessful organisers will exit. Meantime, the same revolving-door concept can be applied to the pool of runners too because as often as a new runner emerges on to the scene, an older or more experienced runner will stop running due to injuries or to pursuit other hobbies or interests. Such is the circle of running!
This article was first publushed in a running magazine with editor’s cut. For more naked truths about Malaysia’s running scene, LIKE Happy Runner