And even as you read this story, sportswear major Reebok will have gone on to unveil a new branding move, globally
Indians love Reebok. Indians love its eccentric punchlines. And India is head-over-heels when it comes to the adrenaline rush stimulated by any form of association with the British brand. However, the sad truth is – it’s only India! Necessary as this was, it is also worthy of mention that Reebok has made the most of what India could offer.Today, it is counted as the country’s number one sports footwear and prêt-a-porter brand, leaving brands like Nike, Adidas, Puma and several of their ilk far, far behind. So while critics raise their voices over the ‘single nation’ success of Reebok, the more critical question is – how did Reebok actually change the rules of the game when it comes to the Rs.11 billion Indian sports footwear & apparel market?
To answer the question – a dexterous game plan, woven arduously for more than a decade and which took care of almost everything (right from its strategic expansion to superb positioning and reaping synergic benefits) has enabled Reebok India to milk super-colossal profits. So its not surprising that 13 years post-entry into the Indian soil, Reebok has increased its annual turnover by an impressive 500%! And who deserves credit for it? None other than the mastermind – Subhinder Singh Prem, MD, Reebok India Company, who revealed the challenges faced by Reebok on India and how it carefully changed its batting stance to 4Ps B&M.
In the mid-1990s, when Reebok made its debut on Indian pitches, the sports industry in the country was dominated by the desi Adams. This was an unwanted externality and thereby forced Reebok not to unleash all its products. Unlike other players, the product offering of Reebok was dominantly for the male consumer. Surprisingly, with the right pricing strategy, helped with a fair amount of commercials, Reebok expanded its arms handsomely across the nation. And the result? Well, a year hence, 20 Reebok stores had popped-up across India; some number to reckon with considering those were still early days for liberalised India, as Subhinder explains, “That might sound like a very small number, but read it in the context of other majors in the game hardly realising our presence till yesterday and suddenly today, (pop!) we’re a giant staring at them threateningly!
We started playing the expansion game (as it was proving quite a success for us) despite others calling it a mistake.” So has it really worked as Subhinder claims? Considering that today, Reebok’s presence through 600 exclusive brand outlets (as on December 31, 2007) is nothing short of gigantic, it really has! “We started spreading in metros and towns as well through tie-ups with retailers...,” adds proud Subhinder.
Such expansion strategies indeed helped and this is where even the global big daddies (read Nike) missed out big time. And there’s more – intelligent ad-campaigns surely brought success to Reebok. “We never compromised with the sports brand image of Reebok while trying to connect with the masses. So even today, we show through our brand ambasadors like Dhoni, that there are two sides to a human being – one who’s a cricketer and the other’s the common man who plays street cricket with a Reebok denim,”defines Subhinder. But what about roping -in the sizzling Bipasha Basu? Well, logically, with women’s apparel contributing to 30% of its Indian turnover of Rs.9 billion for 2007, the signing made logic. Plans to make a splash into the Rs.130 billion ‘kids prêt-a-porter’ market are also in the pipeline.
Strangely however, Reebok still wants to keep a distance from creating a low-cost manufacturing hub in India, while global players are excited great guns about the same. Adding sense to the argument, Subhinder asserts, “Ever since we have become a part of Adidas, we have been able to leverage from the outsourcing synergy that Adidas has...” Now that’s called taking advantage of the $3.8 billion takeover by Adidas in 2006!
One reason why Reebok did well in India was because it understood the perfect way to establish itself as a sports brand in a cricket crazy nation – by associating with the game (of course!) and making it a desi brand; much before Nike, which associated itself with cricket in 2005. Today, Reebok is the leader with an exorbitant 50% market share, while Nike comes a distant second with a mere 15%! (as per KSA Technopak).
But are we not scared of complacency? Not exactly, as Reebok proved by roping in 9 Indian cricket team members immediately after Nike took the apparent lead by paying Rs.2 billion to BCCI for grabbing the jersey-rights of the team in 2005. All this said, what remains is the “why just India?” question. Well, a bird in hand is worth two in the bush... so they say. Subhinder isn’t bothered, and neither is Reebok. It has decided to concentrate on batting, can’t you see?
Edit bureau: Angshuman Paul
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).
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