German sportswear major Adidas is aiming big in India. According to Dave Thomas, Managing Director, Adidas Group India, the strategy involves bringing in its international styles with a faster turnaround time (to India), going premium in certain segments and also larger format stores.

The idea is to double its business in India by 2020. Premiumisation of offerings has started paying dividends with average selling price for Adidas moving up to ₹3,500 from ₹2,500.

In an interview to BusinessLine, Thomas elaborates the India strategy, having company-owned stores, among others. Excerpts:

How has the last one year been for Adidas?

We have gone from strength to strength.

Our premiumisation of the brand is really taking hold.

A year ago, we started to focus on the upper-end of some of the products.

And the success we have with that is amazing.

Can you elaborate the India strategy?

We cover a wide range of price points – from being a premium, aspiration brand to having products at affordable prices. There are mono-branded stores, e-com partners and wholesale partners. We necessarily do not put the same product across all our partners.

The most important thing, however, is to bring (global) products in the market. In the past, we probably did not have that many products in India. But all that is changing now.

Even the look and feel of our stores is going through a changeover. We are bringing our latest global store formats to India. We have started the roll out with one in Bengaluru. We are also planning larger format stores which range from 8,000-10,000 sq ft in Chennai and around 4,000 sq ft for Chandigarh.

In short, we are bringing in size (larger stores), new formats and premium products. We intend to double our business in India by 2020, which we will do. But the real journey starts after we achieve that.

Why larger stores?

If I may say, we had been a little bit unambitious with aspirations of what our brand could be. And now, we are very optimistic and ambitious of what sort of store (size) we want and products we intend to have. Our challenge, is often, to get the larger space in malls.

In the past, the thinking was if we have smaller stores, we could be more productive. Smaller equals less rent and we could protect ourselves. But now, the thinking is in bigger stores we can represent our brand with more authorities, tell more stories, and have more premium products.

Will these larger stores be company-owned?

Initially, it looked so. But our franchise partners have expressed their confidence having seen great success in the last six to 12 months. They (our franchise partners) are now saying they want bigger stores.

Any change in consumer behaviour pattern?

The gap between global launches and their introduction in India has come down. Customers are more demanding in wanting global styles here. In July, a typical end of the season sale period (discount month), we have seen 52 per cent full-price sale through (sale of non-discounted products) Adidas Originals (a sub-brand) stores. Last year, it was 10-15 per cent. This was unheard of previously.

People are now travelling all around the world and thereby more demand for global styles.

Pricing in India is a huge factor. Does premiumisation not take away the dominant position you have across segments?

Going premium does not mean we will turn our back on the mass market or become a niche player. We are not a luxury brand. The balance is important. And we know that some people can afford a pair priced at ₹3,000, some can afford one even at ₹30,000. It is all about the value that people see.

We intend to bring in a value into all our offerings, irrespective of the price and be aspirational at the same time.

For example, in football we have a Messi boot to some targeting professionals and then going all the way down to the entry-level prices.

Between sports and lifestyle shoes, what is the break-up in India?

Today, the break-up will be 80:20; with Originals and Neo contributing 20 per cent. Originals is driving the lifestyle segment. Earlier (sports to lifestyle) break-up was 95:5. Globally, it is 60-40 (sports to lifestyle).

What is the next step ?

We still don’t have enough women and kids offerings. They will move up in the coming days. We have opened two exclusive kids stores in Delhi. And we are looking at having similar ones in Kolkata and Mumbai.

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