German sportswear major adidas is betting on the India growth story. It has accelerated opening of company-owned stores under the single-brand retail policy in post-pandemic times. It is also the official kit sponsor of the Indian cricket team, and gearing up for the upcoming for the upcoming T20 World Cup. Neelendra Singh, General Manager, adidas India, told businessline that India is not just important due to its large customer base but also its talent pool. Stating that India is a “long game”, he said the brand is betting big on the emergence of the jersey and sneaker culture in the country. Excerpts:
Where does India stand in the global scheme of things for adidas ?
India is one of the fastest-growing markets for adidas. There are very few places where 100-200 million consumers are waiting to be addressed. It is also exemplified in the fact that we have come forth and made this big investment to partner with the BCCI. India is also a sourcing hub for us. We also have a global tech hub in India which employs over 1,000 engineers besides a global back office. So India is not just important in terms of the potential of the market, but also for its talent pool.
I think India is a long game and adidas is fully committed to cater to the evolving Indian consumers. Global trends are also hitting India faster. Our two-pronged strategy is leveraging mega trends and mega sports events to drive more relevance in India. At the same time, we are focused on being locally relevant by making in India and offering these products at relevant price points. Two-thirds of what we sell in India is made in India.
How has the adidas India’s business performance been in FY24 and what are your plans for retail expansion ?
Post Covid, the sportswear industry has seen a surge in demand driven by growing awareness about fitness and sports. We have seen the emergence of categories such as walking, running and football. Global sporting events such as FIFA, Cricket World Cup and Olympics also offer us opportunities to grow and penetrate deeper within India.
In post-pandemic times, we have accelerated addition of company-owned big box retail stores across key cities and locations. We now have over 80 company-owned retail stores. We also continue to expand franchise stores, especially in tier-2 and tier-3 locations. So the cumulative network of the brand’s stores stands at over 450 stores. We have also been doubling down on digital. Now more than 40 per cent of business for us comes from online channels. Nearly half of this is contributed by our own e-commerce site and app.
How are you leveraging your partnership with the BCCI? Given the sea of blue visible in stadiums during the ODI World Cup, do you think the jersey culture reached inflection point?
The jersey culture development has a long way to go in the country. During the ODI World Cup held last year, we began seeing the first signs. Our strategy to get the product, distribution and accessibility right helped us sell nearly half-a-million jerseys last year. I believe we got our pricing right by offering it at a range of price-points starting at ₹999. Also, we focused on making jerseys available not just across our stores and online channels including Blinkit, but also in hotel lobbies, airport lobbies and mall atriums, among others. Before us, I think no one got these three elements right.
For the upcoming T20 World Cup, we have launched the new jersey and it is getting a phenomenal response. We are also ensuring the fan product is available at accessible price-points. We have also launched the cricket chapter of the global campaign, ”You Got This” featuring Indian cricketers. Over a period of time, we will leverage on our association to create stronger ranges of cricket-inspired products which are locally relevant.
There has been a strong uptick in premium footwear segment with the emergence of the sneaker culture in India in line with global trends.
Indian consumers are maturing and are engaging in different kinds of fitness and sport activities, and are understanding the need for different kinds of equipment. The demand for specialty footwear will continue to rise. Sneaker culture is also building up and the demand for stylish and comfortable shoes is at an all-time high. As consumers upgrade their lifestyle, we see them spending on smartphones and cars or bigger houses. I feel in the coming days, sneakers will also feature in this pecking order of categories. Comfortable sneakers which are iconic will be an important style statement for the Gen-Z consumers.
Has growing adoption of online shopping reshaped your offline strategy ?
India is so large that we believe we will need to continue to expand our distribution for the next decade. Physical stores play a key role of driving branded agenda, elevating the experience, and storytelling of the product and service. The range of assortment is also hyper-targeted to the customer needs in the catchment area. The online channel plays a key role in offering a wide assortment and convenience. It presents a massive recruitment opportunity for the brand to add new consumers to its fold.
In line with the growing premiumisation trends in the country, we are seeing that the online channel is no longer just about deals and recruitment, but also about catering to the growing aspiration of consumers who are seeking premium products. So on our own e-commerce platform and marketplaces like Myntra, our top-selling ranges are witnessing strong traction besides our stores.