Sourcing City has published its second industry white paper: The Merch Ecosystem, a data-driven analysis of where promotional products sits within the broader global branded merchandise economy.
https://sourcingcity.co.uk/whitepapers/the-merch-ecosystem
The paper maps the full ecosystem across five interconnected player clusters, from demand generators and content creators through to promotional product distributors, fulfilment networks and aggregator platforms, and traces the flow of value from brand intent to decorated product.
Drawing on the latest data from ASI Research, the Sourcing City UK and Ireland Market Report 2025 and a range of independent market sources, the paper sizes the opportunity across the US, UK and Europe and examines the structural forces reshaping the industry.
Key findings include:
The US promotional products market reached $27.7bn in 2025, a fifth consecutive annual record, up 4.2% year on year (ASI Research, January 2026). The European market reached $14.24bn in 2024, with the UK posting $2.096bn, up 4%. Combined, the US and European promotional products market now exceeds $42bn.
The paper argues that promotional products is not a subset of the broader consumer merch economy. It is structurally distinct: B2B-embedded, compliance-driven, with higher order values and longer client relationships than consumer-facing merch platforms can replicate.
At the same time, the paper identifies a significant convergence taking place between traditional promotional products and consumer merch. Brands are increasingly seeking to serve both channels from the same supply chain. Creators and gaming communities need B2B-grade fulfilment reliability behind consumer-facing storefronts. The platform that bridges these two worlds, the paper concludes, occupies the most valuable position in an addressable market that runs well into the hundreds of billions.
The paper also examines the value chain in detail, explaining why the aggregation layer, the distributor or platform that owns the brand relationship, curates supply and manages compliance, captures the highest margin and represents the most defensible business model in the ecosystem.
Alistair Mylchreest, Strategy Director at Sourcing City, said: “We wanted to put real data behind what most people in the industry already sense intuitively. Promotional products is not a niche. It is a $42bn industry sitting at the centre of a much larger and rapidly converging merch economy. Understanding that context properly is what allows us to make the right strategic decisions.”
The Merch Ecosystem is the second paper in the Sourcing City Industry Research Series 2025/26, following Every Second Counts, published in April 2026. Both papers are free to read and share at sourcingcity.co.uk/whitepapers.
Published on: June 22nd, 2026
