Japan’s sportswear brand ASICS to open more stores in India
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New Delhi: With just 20 stores, India is a small market for ASICS Corp., the Japanese sports goods maker that is known for its celebrity users such as martial artist Bruce Lee and former US President Barack Obama. But it is in this highly under penetrated market where the company sees ‘huge scope for growth’ with focused retailing targeting the upwardly mobile middle-class looking to stay healthy more than ever.
Over the next three years, ASICS will open at least 12 new stores every year across top Indian cities, including a few in the tier-II category towns, besides adding six more by end of this year to 20 outlets currently, said Rajat Khurana, managing director, ASICS India Pvt Ltd. Besides these ASICS brand stores, opened in partnership with local associates, ASICS shoes are available in about 300 multi-brand stores and a few online marketplaces that account for about 20% of sales.
Khurana declined to give details of revenue that the company generated in India, but said ASICS had a 70% growth in sales between 2015 and 2016. The average selling price for ASICS shoes in India is about Rs8,000.
To be sure, the growth has come at a low base. But it’s comes at a time when ASICS reported a 6.86% decline in global sales revenue to 399.11 billion yen in 2016 as sales fell 2.6% in home market Japan, and Europe, Middle East and Africa together registered a 12.9% drop in sales. The company’s sales grew across the Oceania, South East and South Asia by around 11.3% while sale in the East Asian region grew by 13.1% during 2016.
ASICS will look at opening its own branded store in India after a few years. “While 100% foreign direct investment is allowed in single brand retail in India, we need to source at least 30% here. We have started sourcing locally for apparel that accounts for about 10% of total sales. It will take time to reach the level of 30% local sourcing,” said Khurana.
Besides its flagship brand, ASICS is planning to open outlets for its lifestyle brand Onitsuka Tiger later this year, according to a report by ETRetail.
While ASICS opened its first store in India in July 2015, the company has been selling in the market since 2010. It had a five-year agreement with Reliance Retail which it did not renew after the tenure got over.
ASICS markets its shoes as running shoes and the brand has associated itself with a few running events in India, including the Mumbai Marathon. “Running will remain focus. But we have been sponsoring other sports events like tennis and cricket in India,” said Khurana.
ASICS is a late entrant in a market that is dominated by other sports brands like Reebok and Adidas (that entered in 1995, followed by Nike (1996) and Puma (2005). Last year, New Balance Athletic Shoes also opened its first brand store in India.
The active sportswear market in India, which includes sports footwear, apparel and accessories, was estimated at Rs6,000 crore in 2015 and is growing at 13% annually, according to a report by IMAGES F&R Research.