Economic Benefit of ICC World Cup 2023

India, with a population of 1.4 billion, is currently hosting the 13th edition of the Cricket World Cup after a 12-year gap. The last time we hosted the tournament, the nation witnessed an exhilarating victory when the Indian cricket team, led by M.S. Dhoni, secured the World Cup. That moment remains legendary in the Indian cricket history.

The ongoing World Cup, which commenced on Oct 5, 2023, spans 46 days and encompasses a total of 48 matches, with 70% of them already concluded. These games are being played across 10 major cities in India, including Ahmedabad, Bengaluru, Chennai, Delhi, Dharamsala, Kolkata, Lucknow, Mumbai, Pune, and three more in Hyderabad. 

Apart from the excitement it generates, this grand event is anticipated to bring substantial economic advantages to India. Let’s dive into the economic benefits it will drive this season.

Economic Benefit of the ICC World Cup 2023

Economists have conducted a comprehensive analysis of the potential economic impact of the ICC Men’s Cricket World Cup. Their calculations indicate that this sporting event could potentially infuse a substantial $2.4 billion into India’s economy. 

This tournament saw a 22% increase in viewership compared to the 2019 edition, accumulating a total of 182 billion minutes of watch time. Additionally, the live broadcast of the World Cup garnered over 400 million viewers in the first 26 matches, as per BARC data.

This heightened anticipation is excellent news for broadcasters and sponsors, with the potential to generate substantial revenue in the range of ₹105 billion to ₹120 billion through TV rights and sponsorship deals. Since 2015, Star Sports has held the Indian streaming rights for ICC World Cup, with an 8-year-long $2.02 billion deal.

This forecasted economic influence of the World Cup is set to create ripple effects across several sectors. The impact will be felt in areas such as tourism, local businesses, infrastructure development, and various consumer-oriented industries.

Sectors Gaining from ICC World Cup 2023

• Food and Beverage 

The Food and Beverage (F&B) sector witnessed a significant uptick in sales during cricketing events, with fans enjoying both the thrilling matches and delectable snacks. This phenomenon provides a lucrative opportunity for restaurants, cafes, and food companies to boost their profits.

In the upcoming quarters, Zomato, Jubilant Foodworks, and Devyani International are poised for robust financial performance, thanks to the impact of the World Cup, which is likely to reflect positively in their earnings.

Zomato, a prominent player in food delivery, is currently trading close to a 52-week high. The World Cup frenzy may have contributed to this surge.

• E-Commerce

The e-commerce industry is set to witness increased sales, notably in products like big-screen TVs, jerseys, and cricket accessories, due to the convergence of the World Cup and India’s festive season. 

Government incentives have already boosted the appliances and electronics sector. A PTI report predicts sales exceeding ₹70,000 crore this year, driven by multiple festivals and the World Cup. 

Companies like Dixon Technologies and PG Electroplast, specialising in consumer electronics, stand to benefit. Historical data from the 2019 Cricket World Cup suggests a boost in TV sales during major tournaments in India.

• Travel and Hospitality

Leading up to India’s G20 summit a few months ago, the local travel and hospitality sector experienced a substantial boost. Hotels witnessed a surge in bookings, leading to increased room prices, while airfares also climbed. This pattern of increased demand and pricing can be observed in the context of the Cricket World Cup, affecting hotel and airline companies.

Booking.com reported a significant rise in the demand for accommodations and flights attributed to the ICC Men’s Cricket World Cup. Similarly, Make My Trip displayed an optimistic outlook, evident in the rising percentage of advance bookings.

Statistical data reveals that the influx of visitors to India primarily hails from the United Kingdom, Australia, the Netherlands, New Zealand, and Sri Lanka. For potential investors seeking opportunities in this industry, Indian Hotels, Lemon Tree Hotels, and InterGlobe Aviation (IndiGo) appear as viable options.

• Advertising, Sponsorships and Telecast

Cricket matches are more than just boundaries; they’re about branding. When the ball hits the fence, we see prominent brands on display, gaining exposure to millions of viewers and enhancing their image.

The 2023 ODI World Cup offers an ideal platform for advertising and sponsorships, creating potential stock boosts for investors interested in marketing trends. The official broadcaster has secured big sponsors like Hindustan Unilever (HUL), M&M, and IndusInd Bank, potentially boosting their revenue.

In the telecast space, TV18 Broadcast and Network18 Media are worth considering. Reliance and its subsidiaries hold valuable media rights, which could lead to increased revenue from advertising and subscriptions.

Mphasis has bagged the Digital Consulting Partner for the ICC Men’s Cricket World Cup 2023. This IT solutions provider specialises in cloud and cognitive services.

• Retail 

The ICC World Cup is anticipated to significantly drive retail sales as enthusiasts are set to buy souvenirs, clothing, and associated items. As per a study conducted by the FICCI, the 2023 Cricket World Cup has the potential to escalate retail sales by approximately ₹2,500 crore.

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Conclusion

The ICC Cricket World Cup 2023 goes beyond cricket festivities; it represents India’s economic strength and its ability to host a major international sporting event, contributing substantially to various sectors of the economy. 

Some of these companies like IRCTC and Indigo are equipped with strong operational efficiency and leading market positions and are well-positioned to benefit from this major sporting event. Given their history of success in asset-intensive sectors and the potential for operational advantages, these firms present an enticing investment prospect to harness the economic influence of the World Cup.

As the matches progress, our attention will be drawn not only to the on-field action but also to the economic impact that will undoubtedly captivate us. 

Disclaimer: This article has been written for educational purposes only. The securities quoted are only examples and not recommendations. Conduct your independent research before investing in any securities.