The 2nd most developed Padel market in the Europe – but what is going on there?
Key findings of the Padel market in Sweden
– Sweden is the second most developed Padel market in Europe after Spain
– Sweden has grown rapidly in the capacity of the Padel courts
– Multiple new Padel equipment brands have been launched by Swedish people
– Various sports-minded people established Padel halls in the early phase in 2017-2019
– A large consolidation happened in 2021 in the Swedish Padel market when Padel United, PDL, Every Padel or Triton Padel acquired most of the operative Padel companies in Sweden
– Padel United is the largest Padel group after their merger with PDL
– Formula 1 driver Marcus Ericsson has also invested in Padel halls in Sweden
– Over 100 Padel halls have been closed in 2022 or even went to bankruptcy
– Padel United has closed 63 Padel halls in Sweden in 2022
– Number of Padel players is still continuously increasing in Sweden and will continue based on our market research
– There are over 650.000 Padel players in Sweden with 15% increase compared to 2021
When Padel was introduced in Sweden?
Padel was first introduced to Swedes before Padel was introduced in Sweden. Swedish people have traveled and lived in Spain since the 1980s. There are currently over 20.000 Swedes living in Spain. While staying in Spain, especially in Marbella, sportive Swedish people became familiar with and hooked to Padel.
The first Padel court in Sweden was established in 1998.
Why is Sweden the second most developed Padel market in Europe?
It has been a strong vision by a group of Swedish people to build a new business out of Padel and not only Sweden. Ambition is strong and we believe Swedish companies are here to stay and grow in Padel and not only in their own home market.
What can we learn from Sweden? The first mover’s trap is the second mover’s benefit, or is it?
On 25th of October 2021, Triton-funded LeDap Group announced a target to have more than 200 locations and operate more than 1.700 courts. This would mean on average 8,5 courts per location. Currently, LeDap has 167 clubs with 1.145 courts, on average less than 7 courts per unit. This is only about 70% of their target. We can assume that they have re-set their growth plan with a more organic and moderate growth plan.
Triton was advised by a global law firm White & Case in the establishment of LeDap Group. A Pan-European market consolidation included more than 30 transactions in Nordic countries, Austria, and Poland. All these acquisitions are backed by Triton’s €5.2 billion Fund V without any bank financing.
Triton Company We are Padel published a press release in October 2022 regarding their corporate restructuring. They say that there is an oversupply of Padel courts in Sweden and they also need to act like their competitors. In some Swedish media articles, it is said that Triton Padel has made every month €1.4 million losses only in Sweden so it is natural that they had to act.
PDL Padel United has also faced similar difficulties in Sweden as the court capacity has grown too fast to melt to the market. Padel United published their press release also in October regarding closing part of their capacity.
There are also smaller Padel club chains in Sweden that are mainly established by former professional sports stars and funded by their families or business network. With limited funding capacity you normally take more careful decisions and stress-test your investment plan in detail. Main competitive edge of smaller Padel clubs is the entrepreneur driven approach which makes the experience more personal for the customers.
All in all, these are great lessons learned from these two well-funded companies. They are now more experienced in their international growth and conquering the rest of the world with their strong teams. Bigger Padel club chains have relatively high overhead cost base and they are forced to seek growth even with the cost of reversing at later stage by writing down their earlier investments.
Swedish Padel association is doing consistent contributions to strengthening Padel
The official Swedish Padel Association was established in 2010 and is currently doing an amazing job with a strong commitment to the growth and development of Padel through multiple programs for players. They have also a major role in why a number of active Padel players is growing and growing in Sweden.
Like in the growth of every sport it is important to have sports idols from the same country as the local junior players. Having an idol is a very important and strong motivator for younger people to train and work hard for their future success in Padel sports. Daniel Windahl and Simon Vasquez are the most successful Swedish Padel players internationally. The Swedish number one currently is Daniel Windahl. Daniel is also clearly above all the Northern Europe players. On the day we write this article Daniel Windahl is ranked at 64th in the men’s category in World Padel Tour ranking with 837 points.
Only the capacity of the Padel courts that has never fulfilled the criteria of sustainable Padel club criteria is to be closed in the market.
Swedish business culture is strong for international success stories
Swedish people have been very often successful in business and in creating international brands. All of us know the IKEA brand and its concept of affordable furnishing very well, but it is only the tip of the iceberg. H&M is another well-known Swedish brand in clothing and fashion.
In the music revolution, Spotify is probably the biggest in the world and is also from Sweden. Volvo is a very iconic brand originally from Sweden and is currently owned by Geely, a Chinese multinational automotive company. Assa Abloy in a locking business worldwide known for its quality. Also, Electrolux is today in the global top 10 household appliance manufacturing businesses.
Swedish culture requires consensus before action and that requires a lot of discussions before a common understanding is found. Finally, when a common understanding and opinion are reached after multiple discussion meetings it is time to take a decision. After this, it is time to go to market and they do it fast. In Swedish business it is important to move fast after release or launch to collect data and start to tune the service and products to fill customer needs and preferences.
The above examples of internationally known Swedish brands are also showing how good Swedes can be in marketing and brand-building skills. Did you know that Sweden is ranked among the top 5 country brands? This strong foundation also helps companies coming from Sweden in their international expansion and growth. Sweden is known as trusted for high-quality products, the pureness of beautiful nature, and a modern forward-looking country.
What are the most important ingredients of operative Padel club business?
1. Low customer acquisition cost
2. Partnership network with local companies
3. People leadership and management
4. Community and event management
How to benefit from lessons learned in the Swedish Padel market?
To minimize the probability of the same mistakes done in Sweden we recommend further reading a “How to Choose a Padel Court” blog post. This article includes 7 point checklist to help your Padel court investment.
For further help, we encourage you to talk with us. Book an advisory video call with our experts.
Summary and Conclusions
While different Padel operators are competing for market shares in Sweden the market size and number of active Padel players are growing and won’t stop. We believe in Padel United and LeDap Group (Triton Padel) to grow also in the future. Currently, their Swedish operation is in the natural phase of cleaning and finding a cost-efficient operative model before their next profitable growth phase.
To help you to choose a Padel club we have created a “How to Choose a Padel Club” article.
Sweden Padel Market Outlook Q4/2022
Publishing date 05.11.2022