adidas to strengthen presence in tier II, tier III markets

Sportswear brand adidas, that became the first sportswear brand to cross the Rs 1,000-crore mark in India in FY17, is now eyeing tier II and tier III cities as a part of its long-term growth strategy. 

The German brand is already present in 140 cities in the country.

“Everybody eyes the key cities and our approach is also to do well in these key cities but we also do a lot of business in the other cities as well. So, our approach is not “conquer the key cities and you have conquered India”. We are definitely trying to penetrate into tier II and tier III cities as well,” said Sean van Wyk, Senior Marketing Director, Adidas India.

The market that is valued at around Rs 6,000 crore is also seeing new entrants who are also beefing up their foothold in the tier II and tier III markets. In an interaction with BestMediaInfo.com, Rahul Vira, CEO, Skechers South Asia Pvt Ltd, had spoken about how they intend to open 400 more stores in the country and how a majority of those stores will be in tier II and tier III cities.

Speaking about how the company intends to hold ground in the face of competition from new players in the market, van Wyk said, “Our stand is very clear. We are not followers, we are leaders in the category. The fact that we don’t follow is what has got us where we are now. We are the creator sports brand and we will stick to our strategy of creating the new.”

Apart from their plan to increase their presence in the tier II and tier III cities, Reebok (which is now owned by Adidas AG) will also be opening five more exclusive brand stores in Bengaluru over the course of the coming year. Reebok India was at the heart of a financial irregularities scandal in the year 2012 after which the brand’s market share and performance took a serious hit. 

According to van Wyk, the merger of both the brands does help in cost saving even though the objective and the positioning of both the brands are very different.

“The two brands are clearly differentiated. At adidas, our objective is to be the best sports brand in the world and Reebok is positioned as a fitness brand. So, they are two separate brands with two separate teams but combined together there are obviously some opportunities and advantages that they offer. From an economic point of view there is some cost saving that comes from joint operation,” said van Wyk.

adidas has been riding high on the recent popularity that football is seeing in the country. They also recently launched a new campaign ahead of the FIFA U-17 World Cup. van Wyk feels that not only is the tournament bringing some much needed attention to the sport but is also helping the brand catch more eyeballs.

“Football is seeing amazing groundswell. There is a lot of popularity for the sport especially with kids. We are seeing that the participation in football is growing at a very rapid rate. The fact that FIFA U-17 World Cup is happening in India is a boost for football in India and for visibility. We are seeing that the number of spectators coming to these matches is incredibly high and the viewership on TV is also very high. Also, next year is the FIFA World Cup (which will take place in Russia), which is on a time-friendly time zone to India, so there is going to be a lot of viewership on television here. Football is witnessing some exciting visibility right now and it is our job as a sports brand to really be able to leverage this opportunity. We are driving the movement to a large degree, we are at the forefront of football in India. We have associations with FIFA both with this U-17 World Cup and for the FIFA World Cup we are the official sports partner,” said van Wyk.

Communication-wise van Wyk feels that digital is their most important channel and a significant portion of their marketing budget goes into digital marketing.

“The digital media is becoming more and more popular and it is reaching our target markets very successfully. Within digital media, social media is very strong and therefore, we are using a lot of our marketing monies on digital media,” added van Wyk.

Apart from football, adidas has also been associated with cricket and IPL but unlike the other leagues that they are associated with, adidas hasn’t been involved in merchandising with IPL. Explaining the reason behind this decision, van Wyk said that the brand is more interested in creating more original properties and intends to spend their marketing monies on that front more.

“As a sport evolves and consumer behaviour evolves a brand’s strategy might also change. At the end of the day you get only so much marketing fund and every brand has to decide how to best employ that marketing fund. Adidas is trying to create its own assets and properties and building them,” said van Wyk.

An example of this is adidas Uprising. The brand officially launched the third edition of the initiative yesterday in Mumbai. adidas Uprising is an initiative by the brand that invites the people of the country to not just watch sports but also to take part in their favourite sports. In the third edition of the initiative, adidas is also introducing Bocce, a game with skill and strategy, inviting athletes with special needs to compete.

Left to Right - adidas athletes Saiyami Kher, Nikhat Zareen, Rohit Sharma, adidas Senior Marketing Director Sean Van Wyk, K L Rahul, Anusha Dandear

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