Description
Reebok set a blistering pace in the Indian sports good market, far
outpacing its formidable rivals, Adidas and Nike. Then, last August,
Adidas ‘combined’ with Reebok globally. What has enabled Reebok
to best the competition in India?
68
Strategy
Running to
stay ahead
Reebok set a blistering pace in the Indian sports good market, far
outpacing its formidable rivals, Adidas and Nike. Then, last August,
Adidas ‘combined’ with Reebok globally. What has enabled Reebok
to best the competition in India? Anu Saraf reports on Reebok's
strategies
E
ver since it established a pres-
ence in India in 1995, Reebok
has dominated the Indian
sports wear market. While its
major competitors Adidas and
Nike have not been as successful in the
Indian market, Reebok claims it will end
2005 with total sales exceeding $91 mil-
lion. Sales in 2004 were $59 million. In
contrast, according to market sources,
Adidas India’s sales revenues are about
$22 million.
Says Prakash Vaswani, a Reebok dis-
tributor in south India, “Reebok's main
advantage has been that it understood the
Indian consumer very well and has made
an effort to grow alongside him. For
instance, when the company came to
India, all that the consumers wanted was
an international brand of footwear and
Reebok gave them that at an affordable
price.”
Today, with sports becoming fashion-
able, the bulk of the sales comes from the
$45 to $90 segment compared to two
years ago when most of the sales would
come from the $20 to $45 segment.
One aspect to Reebok's success has
been its ubiquitous retail chain. By the end
of 2005, the company was retailing from
182 franchised stores. It also retails from
two thousand multi-brand outlets. While
Reebok has been adding a store a week in
2004, for the next year the company has
lined up even more ambitious plans to open
a store every 72 hours. Subhinder Singh
Prem, managing director Reebok India
Company, says, “Our biggest investment
has been in the field of marketing infra-
structure, creating an international and uni-
form retail ambience in all our exclusive
stores.”
A functional issue that was arguably
instrumental in aiding the company estab-
lish itself early in the country was the fact
that its shoes have a broader forefoot,
which suits the Indian consumer. In con-
trast, the shoes of international rivals have
narrower forefeet. It has made efforts to
vibe with the customer for its apparel
range as well, that contributes 45 per cent
to the company's turnover. This year the
company has come up with its NBA-NFL
range of T-shirts that are flying-off shelves
in retail stores due to the customer demand
for the Americana look.
“What worries me the most is that we
haven't made enough mistakes, which
implies that we haven't taken enough
risks. Most of our initiatives have been
extremely successful,” says Prem. “The
only product line to bomb has been the
salwar kameez (traditional Indian
women's dress) in knit fabric that we
brought out for the early morning women
joggers.” In 2004 the company started
treating the womens' business initiative
as if it were launching a new brand. It
started promoting the category by open-
ing women's-only stores, the first outside
the US, that would meet the special
needs of women customers.
Adds a distributor, “Whenever a style
would do well, the company would ensure
that we were always well stocked with
that style whereas competitors would try
and push the entire range of products at
the consumer.”
On the promotions front as well the
company has increased its spends and is
roping in top sportspersons to push its
brand. Reebok has tied-up with cricketers
like Rahul Dravid, Mohamed Kaif, Yuvraj
Singh, Irfan Pathan, Dhoni and Harbhajan
Singh. In tennis, it sponsors the Davis Cup
and backs Prakash Amritraj. In the up com-
ing field of motor racing it is sponsoring the
fastest Indian Narain Kartikeyan. Says
Prem, “We are proud of our association
with Kartikeyan as he is the second Asian
in Formula 1 races.”
Reebok came to India in the mid-90s
mainly to develop the middle segment of
strategy reebok.qxp 16/106 4:28 PM Page 68
69
the footwear market in Africa, the Middle
East, and Central and South Asia, and as a
fallback in the event of an interruption in
Chinese supplies. The annual threats of
adverse action against Chinese imports
into the United States, prior to the admis-
sion of China to the World Trade
Organisation in 2001, were noted in each
Reebok annual report as having a potential-
ly negative financial impact.
Reebok was the first among the big
three that identified India as a huge emerg-
ing market and a sourcing base for global
exports. Today the company uses Bawa
Shoes in Jalandhar and Moja in Sonepat to
manufacture its low-priced shoes but
imports most of its high-end shoes from
around the world.
Reebok India has performed so well that
it received the prestigious Subsidiary of the
Year award for two consecutive years
2003 and 2004, beating competition from
countries like China and Japan to claim the
credit. It currently has a market share of 47
per cent in sports footwear and apparel
category. The company is also expanding
its presence in Pakistan and Sri Lanka. “We
will add two more stores in Lahore in addi-
tion to the one store which we opened in
February 2004. The legendary pace bowler
Wasim Akram is our only franchisee in
Pakistan. In Sri Lanka, we have had our
presence for some time and we will add 3-
5 stores in the next year,” says Prem.
In order to combine the popularity of its
soccer and athletic brand with the popular-
SELLING A RANGE THAT HAS BEEN FASHIONED FOR THE INDIAN PHYSIOMETRY: The Reebok sales team at a New Delhi outlet
P
I
C
T
U
R
E
S
:
S
H
E
K
H
A
R
G
H
O
S
H
strategy reebok.qxp 16/106 4:28 PM Page 69
70
STRATEGY
ity of football and basketball enjoyed by
Reebok, Adidas-Salomon bid $3.8 billion in
early August 2004 to acquire the latter.
This deal has created a $11 billion sports-
wear giant and poses a formidable threat
to arch rival Nike.
Post its acquisition by Adidas, nothing
has really changed for the company in India
as far as its strategy is concerned. Insists
Prem,”The acquisition process that is
scheduled to start in the month of March
2006 will first be heralded in its American
and European offices. I believe that we
shall be integrated with the company after
that process is over.” Whatever happens to
the combine's overseas operations, given
Reebok's marketing success in India, it is
doubtful if the new major will deviate
sharply from strategies that have trod well
along the path of success.
THIRTY SEVEN year-old Subhinder Singh Prem who has been
with Reebok India Company since it set shop in the year 1995,
and who recently participated in the Delhi half-marathon run,
talks about his vision for the company with Anu Saraf. Prem
became managing director in 2003 and since then, the chain
has grown from 65 stores to 180-plus. And its turnover has
increased from $36 million to over $91 million. Subhinder
Singh Prem spoke to Anu Saraf about Reebok.
What have been the paradigm shifts in marketing
sports shoes and apparel to Indian consumers since the
time Reebok came into the market?
The most noticeable shift has been that sports itself has become
fashionable today in India. In our target segment, seven out of ten
people now indulge in some kind of physical activity compared to
just one in ten in 1995. Price sensitivity has also declined consid-
erably. Today consumers want value for money products and are
willing to shell out more for the product they want.
How would you look back over the years …
It's been ten years now. The first three years were very diffi-
cult creating and laying the foundation for the organisation, and
in trying to figure out the right marketing mix. We were one of
the first MNCs that came in post liberalisation to have posted a
profit — and that was in 1999. And we have been making prof-
its ever since.
Considering you want to be eventually seen as a seri-
ous player in the sports/training shoes segment, what
are you doing to grow the market in terms of promot-
ing fitness/sports consciousness among consumers in
the country?
When we launched in India, fitness was a very nascent indus-
try and people bought our products more for the American
brand image, fashion and comfort. Over the years while we
have retained our position as a fashionable brand, a sizeable
portion of our consumer base buys the products for indulging in
some form of fitness activity. The fitness industry is constant-
ly evolving and is widely researched. New methods of calisthen-
ics are fast attaining popularity. The company frequently
invites visitors from abroad, to share global perspectives on fit-
ness and conduct the Reebok Resolution with the Indian fitness
fraternity at large. Reebok has not only been instrumental in
redefining the attitude of fitness in India but also increasingly
made it a career choice for women instructors and maintained
global leadership in training across the board.
What is your vision for the Reebok brand in India?
Brands are here to stay. Investment in building a strong brand
is a means of securing your sales and business for the future.
As products get more and more commoditised and consumer
choices soar, branding will provide the key differentiation to
break through the clutter.
Fitness will be the key driver in lifestyles, and Reebok is
undoubtedly the fitness enabler in the country. To inspire
Indians at large to lead a fit lifestyle is our goal and vision. The
sales of our products will follow on their own, as we focus on
our goal.
REEBOK INDIA'S MARATHON MAN
FITNESS AS A LIFESTYLE: Subhinder Singh Prem of Reebok India
On the Web
Reebok: www.reebok.com
strategy reebok.qxp 16/106 4:28 PM Page 70
doc_909749696.pdf
Reebok set a blistering pace in the Indian sports good market, far
outpacing its formidable rivals, Adidas and Nike. Then, last August,
Adidas ‘combined’ with Reebok globally. What has enabled Reebok
to best the competition in India?
68
Strategy
Running to
stay ahead
Reebok set a blistering pace in the Indian sports good market, far
outpacing its formidable rivals, Adidas and Nike. Then, last August,
Adidas ‘combined’ with Reebok globally. What has enabled Reebok
to best the competition in India? Anu Saraf reports on Reebok's
strategies
E
ver since it established a pres-
ence in India in 1995, Reebok
has dominated the Indian
sports wear market. While its
major competitors Adidas and
Nike have not been as successful in the
Indian market, Reebok claims it will end
2005 with total sales exceeding $91 mil-
lion. Sales in 2004 were $59 million. In
contrast, according to market sources,
Adidas India’s sales revenues are about
$22 million.
Says Prakash Vaswani, a Reebok dis-
tributor in south India, “Reebok's main
advantage has been that it understood the
Indian consumer very well and has made
an effort to grow alongside him. For
instance, when the company came to
India, all that the consumers wanted was
an international brand of footwear and
Reebok gave them that at an affordable
price.”
Today, with sports becoming fashion-
able, the bulk of the sales comes from the
$45 to $90 segment compared to two
years ago when most of the sales would
come from the $20 to $45 segment.
One aspect to Reebok's success has
been its ubiquitous retail chain. By the end
of 2005, the company was retailing from
182 franchised stores. It also retails from
two thousand multi-brand outlets. While
Reebok has been adding a store a week in
2004, for the next year the company has
lined up even more ambitious plans to open
a store every 72 hours. Subhinder Singh
Prem, managing director Reebok India
Company, says, “Our biggest investment
has been in the field of marketing infra-
structure, creating an international and uni-
form retail ambience in all our exclusive
stores.”
A functional issue that was arguably
instrumental in aiding the company estab-
lish itself early in the country was the fact
that its shoes have a broader forefoot,
which suits the Indian consumer. In con-
trast, the shoes of international rivals have
narrower forefeet. It has made efforts to
vibe with the customer for its apparel
range as well, that contributes 45 per cent
to the company's turnover. This year the
company has come up with its NBA-NFL
range of T-shirts that are flying-off shelves
in retail stores due to the customer demand
for the Americana look.
“What worries me the most is that we
haven't made enough mistakes, which
implies that we haven't taken enough
risks. Most of our initiatives have been
extremely successful,” says Prem. “The
only product line to bomb has been the
salwar kameez (traditional Indian
women's dress) in knit fabric that we
brought out for the early morning women
joggers.” In 2004 the company started
treating the womens' business initiative
as if it were launching a new brand. It
started promoting the category by open-
ing women's-only stores, the first outside
the US, that would meet the special
needs of women customers.
Adds a distributor, “Whenever a style
would do well, the company would ensure
that we were always well stocked with
that style whereas competitors would try
and push the entire range of products at
the consumer.”
On the promotions front as well the
company has increased its spends and is
roping in top sportspersons to push its
brand. Reebok has tied-up with cricketers
like Rahul Dravid, Mohamed Kaif, Yuvraj
Singh, Irfan Pathan, Dhoni and Harbhajan
Singh. In tennis, it sponsors the Davis Cup
and backs Prakash Amritraj. In the up com-
ing field of motor racing it is sponsoring the
fastest Indian Narain Kartikeyan. Says
Prem, “We are proud of our association
with Kartikeyan as he is the second Asian
in Formula 1 races.”
Reebok came to India in the mid-90s
mainly to develop the middle segment of
strategy reebok.qxp 16/106 4:28 PM Page 68
69
the footwear market in Africa, the Middle
East, and Central and South Asia, and as a
fallback in the event of an interruption in
Chinese supplies. The annual threats of
adverse action against Chinese imports
into the United States, prior to the admis-
sion of China to the World Trade
Organisation in 2001, were noted in each
Reebok annual report as having a potential-
ly negative financial impact.
Reebok was the first among the big
three that identified India as a huge emerg-
ing market and a sourcing base for global
exports. Today the company uses Bawa
Shoes in Jalandhar and Moja in Sonepat to
manufacture its low-priced shoes but
imports most of its high-end shoes from
around the world.
Reebok India has performed so well that
it received the prestigious Subsidiary of the
Year award for two consecutive years
2003 and 2004, beating competition from
countries like China and Japan to claim the
credit. It currently has a market share of 47
per cent in sports footwear and apparel
category. The company is also expanding
its presence in Pakistan and Sri Lanka. “We
will add two more stores in Lahore in addi-
tion to the one store which we opened in
February 2004. The legendary pace bowler
Wasim Akram is our only franchisee in
Pakistan. In Sri Lanka, we have had our
presence for some time and we will add 3-
5 stores in the next year,” says Prem.
In order to combine the popularity of its
soccer and athletic brand with the popular-
SELLING A RANGE THAT HAS BEEN FASHIONED FOR THE INDIAN PHYSIOMETRY: The Reebok sales team at a New Delhi outlet
P
I
C
T
U
R
E
S
:
S
H
E
K
H
A
R
G
H
O
S
H
strategy reebok.qxp 16/106 4:28 PM Page 69
70
STRATEGY
ity of football and basketball enjoyed by
Reebok, Adidas-Salomon bid $3.8 billion in
early August 2004 to acquire the latter.
This deal has created a $11 billion sports-
wear giant and poses a formidable threat
to arch rival Nike.
Post its acquisition by Adidas, nothing
has really changed for the company in India
as far as its strategy is concerned. Insists
Prem,”The acquisition process that is
scheduled to start in the month of March
2006 will first be heralded in its American
and European offices. I believe that we
shall be integrated with the company after
that process is over.” Whatever happens to
the combine's overseas operations, given
Reebok's marketing success in India, it is
doubtful if the new major will deviate
sharply from strategies that have trod well
along the path of success.
THIRTY SEVEN year-old Subhinder Singh Prem who has been
with Reebok India Company since it set shop in the year 1995,
and who recently participated in the Delhi half-marathon run,
talks about his vision for the company with Anu Saraf. Prem
became managing director in 2003 and since then, the chain
has grown from 65 stores to 180-plus. And its turnover has
increased from $36 million to over $91 million. Subhinder
Singh Prem spoke to Anu Saraf about Reebok.
What have been the paradigm shifts in marketing
sports shoes and apparel to Indian consumers since the
time Reebok came into the market?
The most noticeable shift has been that sports itself has become
fashionable today in India. In our target segment, seven out of ten
people now indulge in some kind of physical activity compared to
just one in ten in 1995. Price sensitivity has also declined consid-
erably. Today consumers want value for money products and are
willing to shell out more for the product they want.
How would you look back over the years …
It's been ten years now. The first three years were very diffi-
cult creating and laying the foundation for the organisation, and
in trying to figure out the right marketing mix. We were one of
the first MNCs that came in post liberalisation to have posted a
profit — and that was in 1999. And we have been making prof-
its ever since.
Considering you want to be eventually seen as a seri-
ous player in the sports/training shoes segment, what
are you doing to grow the market in terms of promot-
ing fitness/sports consciousness among consumers in
the country?
When we launched in India, fitness was a very nascent indus-
try and people bought our products more for the American
brand image, fashion and comfort. Over the years while we
have retained our position as a fashionable brand, a sizeable
portion of our consumer base buys the products for indulging in
some form of fitness activity. The fitness industry is constant-
ly evolving and is widely researched. New methods of calisthen-
ics are fast attaining popularity. The company frequently
invites visitors from abroad, to share global perspectives on fit-
ness and conduct the Reebok Resolution with the Indian fitness
fraternity at large. Reebok has not only been instrumental in
redefining the attitude of fitness in India but also increasingly
made it a career choice for women instructors and maintained
global leadership in training across the board.
What is your vision for the Reebok brand in India?
Brands are here to stay. Investment in building a strong brand
is a means of securing your sales and business for the future.
As products get more and more commoditised and consumer
choices soar, branding will provide the key differentiation to
break through the clutter.
Fitness will be the key driver in lifestyles, and Reebok is
undoubtedly the fitness enabler in the country. To inspire
Indians at large to lead a fit lifestyle is our goal and vision. The
sales of our products will follow on their own, as we focus on
our goal.
REEBOK INDIA'S MARATHON MAN
FITNESS AS A LIFESTYLE: Subhinder Singh Prem of Reebok India
On the Web
Reebok: www.reebok.com
strategy reebok.qxp 16/106 4:28 PM Page 70
doc_909749696.pdf