Description
adidas was founded by Adi Dassler in 1948.
It remained a family firm till 1988, when it was
transformed into a corporation.The adidas Group
is the world’s second-largest sporting goods
company and had net sales of US$ 7.74 billion in
2004. adidas’ product range includes shoes, apparel
and accessories for basketball, golf, soccer, fitness
and training.The company has over 14,000
employees, 110 subsidiaries and sources from
840 factories across the world. 60 per cent of the
company’s suppliers are based in Asia. In 1997,
adidas acquired the Salomon group and the name
got changed to Adidas-Salomon AG.The name is
expected to change to “Adidas AG” in May 2006
following the acquisition of Reebok.
adidas started in India in 1996 as a joint venture
with Magnum Trading, with adidas holding 80 per
cent stake. Since December 1995 it has been a 100
per cent subsidiary of the parent company. adidas
sells three brands in India – adidas, Taylormade and
Maxfli. It sources from 16 factories which employ
3,800 people in India. It retails accessories such as
footballs and water bottles in addition to footwear
and apparel. adidas has a 25-30 per cent share
of the premium footwear market in the country.
The market is estimated to be growing at 15-20
per cent annually. The six metros account for nearly
40 per cent of adidas’ sales, but the smaller towns
are also playing an important role and showing very
healthy growth.
Entered India as part of global strategy
adidas decided to enter India as part of the
company’s global strategy – to take direct
control of the markets in Asia. The domestic
demand was not high when the company started
India operations. In the first 9 years, India was
the smallest sub-division in Asia, in terms of
revenue. The company believed that India had
the potential to become a huge market considering
India’s large young population and the changing
demographics. Currently out of the 13 subsidiaries
in Asia, India is ranked number 7 and the
management believes it has the potential
to climb up to number 3.
The merger with Reebok will strengthen adidas
in India. In most countries, adidas is significantly
bigger than Reebok. However in India, Reebok has
a larger share of the market.
Background
adidas was founded by Adi Dassler in 1948.
It remained a family firm till 1988, when it was
transformed into a corporation. The adidas Group
is the world’s second-largest sporting goods
company and had net sales of US$ 7.74 billion in
2004. adidas’ product range includes shoes, apparel
and accessories for basketball, golf, soccer, fitness
and training. The company has over 14,000
employees, 110 subsidiaries and sources from
840 factories across the world. 60 per cent of the
company’s suppliers are based in Asia. In 1997,
adidas acquired the Salomon group and the name
got changed to Adidas-Salomon AG. The name is
expected to change to “Adidas AG” in May 2006
following the acquisition of Reebok.
32
ADIDAS INDIA
MARKETING
PRIVATE LIMITED
demand reaches a threshold. adidas’ strategy has
been just the reverse. Now after establishing itself
in India as a sales and marketing organisation, it is
planning to set up a global procurement base for
international markets.
The company is targeting four-fold sales growth
from Indian operations within the next three years
(2006-09). The targeted revenues from Asia are to
exceed US$ 2.38 billion by 2008, doubling the 2004
sales figure. After China, which is the current
growth driver in Asia, adidas expects India to be
the next powerhouse, which will drive regional
growth over the next 3 to 8 years.
India is a significant market for adidas and
it plans to have 200 to 300 more franchisee
showrooms by 2006. It is also exploring the option
of transferring technology and know-how to
manufacture high-end footwear in India.
Keys to success
adidas’ success factors include strength in supply
chain management, cutting edge technology,
a strong retail network and effective advertising.
India provides advantages in terms of lower labour
costs and a highly-skilled work force. However,
attracting and retaining the right people is
a challenge in a highly competitive job market.
Retailers are willing to invest money in setting up
showrooms but generally their understanding of
retailing is poor.
Focused approach to the market
and support from parent company
adidas entered India with aggressive marketing
campaigns. It brought in Indian sports icons Sachin
Tendulkar and Leander Paes to endorse the brand.
The parent company has been very supportive.
The top management had the belief and commit-
ment that it would weather the initial loss-making
years, before India could gain critical mass and
become a profitable operation.
Association with sports events helped
in building awareness
adidas has been promoting sports such as tennis
and cricket at various levels. The company
aggressively promotes tennis in India as a part of
the firm’s strategy to drive growth by identifying
and developing key performance sports in India.
It promotes tennis at three levels - the recognition
of young talent through scholarships, sponsorship
and association with key tennis events in the
country and the launch of high performance
tennis sportswear.
Future plans
adidas has plans to make India the hub for its South
Asian operations. Most companies which start
operations in a new country, initially set up their
sourcing office and start selling when the local
33
adidas India: At a glance
• For adidas, India is: a strategically important
growth market
• Factors for success: Supply Chain Management,
Cutting edge technology, Aggressive approach
to market, Association with sports events
and personalities
• Future plans: Four-fold sales growth in next three
years, Add more showrooms, Launch new products
doc_270621890.pdf
adidas was founded by Adi Dassler in 1948.
It remained a family firm till 1988, when it was
transformed into a corporation.The adidas Group
is the world’s second-largest sporting goods
company and had net sales of US$ 7.74 billion in
2004. adidas’ product range includes shoes, apparel
and accessories for basketball, golf, soccer, fitness
and training.The company has over 14,000
employees, 110 subsidiaries and sources from
840 factories across the world. 60 per cent of the
company’s suppliers are based in Asia. In 1997,
adidas acquired the Salomon group and the name
got changed to Adidas-Salomon AG.The name is
expected to change to “Adidas AG” in May 2006
following the acquisition of Reebok.
adidas started in India in 1996 as a joint venture
with Magnum Trading, with adidas holding 80 per
cent stake. Since December 1995 it has been a 100
per cent subsidiary of the parent company. adidas
sells three brands in India – adidas, Taylormade and
Maxfli. It sources from 16 factories which employ
3,800 people in India. It retails accessories such as
footballs and water bottles in addition to footwear
and apparel. adidas has a 25-30 per cent share
of the premium footwear market in the country.
The market is estimated to be growing at 15-20
per cent annually. The six metros account for nearly
40 per cent of adidas’ sales, but the smaller towns
are also playing an important role and showing very
healthy growth.
Entered India as part of global strategy
adidas decided to enter India as part of the
company’s global strategy – to take direct
control of the markets in Asia. The domestic
demand was not high when the company started
India operations. In the first 9 years, India was
the smallest sub-division in Asia, in terms of
revenue. The company believed that India had
the potential to become a huge market considering
India’s large young population and the changing
demographics. Currently out of the 13 subsidiaries
in Asia, India is ranked number 7 and the
management believes it has the potential
to climb up to number 3.
The merger with Reebok will strengthen adidas
in India. In most countries, adidas is significantly
bigger than Reebok. However in India, Reebok has
a larger share of the market.
Background
adidas was founded by Adi Dassler in 1948.
It remained a family firm till 1988, when it was
transformed into a corporation. The adidas Group
is the world’s second-largest sporting goods
company and had net sales of US$ 7.74 billion in
2004. adidas’ product range includes shoes, apparel
and accessories for basketball, golf, soccer, fitness
and training. The company has over 14,000
employees, 110 subsidiaries and sources from
840 factories across the world. 60 per cent of the
company’s suppliers are based in Asia. In 1997,
adidas acquired the Salomon group and the name
got changed to Adidas-Salomon AG. The name is
expected to change to “Adidas AG” in May 2006
following the acquisition of Reebok.
32
ADIDAS INDIA
MARKETING
PRIVATE LIMITED
demand reaches a threshold. adidas’ strategy has
been just the reverse. Now after establishing itself
in India as a sales and marketing organisation, it is
planning to set up a global procurement base for
international markets.
The company is targeting four-fold sales growth
from Indian operations within the next three years
(2006-09). The targeted revenues from Asia are to
exceed US$ 2.38 billion by 2008, doubling the 2004
sales figure. After China, which is the current
growth driver in Asia, adidas expects India to be
the next powerhouse, which will drive regional
growth over the next 3 to 8 years.
India is a significant market for adidas and
it plans to have 200 to 300 more franchisee
showrooms by 2006. It is also exploring the option
of transferring technology and know-how to
manufacture high-end footwear in India.
Keys to success
adidas’ success factors include strength in supply
chain management, cutting edge technology,
a strong retail network and effective advertising.
India provides advantages in terms of lower labour
costs and a highly-skilled work force. However,
attracting and retaining the right people is
a challenge in a highly competitive job market.
Retailers are willing to invest money in setting up
showrooms but generally their understanding of
retailing is poor.
Focused approach to the market
and support from parent company
adidas entered India with aggressive marketing
campaigns. It brought in Indian sports icons Sachin
Tendulkar and Leander Paes to endorse the brand.
The parent company has been very supportive.
The top management had the belief and commit-
ment that it would weather the initial loss-making
years, before India could gain critical mass and
become a profitable operation.
Association with sports events helped
in building awareness
adidas has been promoting sports such as tennis
and cricket at various levels. The company
aggressively promotes tennis in India as a part of
the firm’s strategy to drive growth by identifying
and developing key performance sports in India.
It promotes tennis at three levels - the recognition
of young talent through scholarships, sponsorship
and association with key tennis events in the
country and the launch of high performance
tennis sportswear.
Future plans
adidas has plans to make India the hub for its South
Asian operations. Most companies which start
operations in a new country, initially set up their
sourcing office and start selling when the local
33
adidas India: At a glance
• For adidas, India is: a strategically important
growth market
• Factors for success: Supply Chain Management,
Cutting edge technology, Aggressive approach
to market, Association with sports events
and personalities
• Future plans: Four-fold sales growth in next three
years, Add more showrooms, Launch new products
doc_270621890.pdf