How pursuit of fitness is helping Asics build its India business
With running expected to catch on as a trend, the Japan-headquartered sports apparel company expects to grow at 25 percent CAGR
The Covid-19 pandemic has prioritised health and fitness, and more and more people have taken to running, giving businesses for sportswear brands like Asics a big fillip.
The Japan-headquartered company registered a global turnover of $3.6 billion in CY22, up from $3.2 billion the previous year, while its India business saw its net operating revenue go up to Rs251 crore in FY22, up from Rs176.5 crore in FY21, according to business research database Tofler. During this period, profit after tax jumped from Rs9.63 crore to Rs40 crore.
“During Covid-19, many people took to sports, especially running and walking. We took this opportunity to expand business globally. India is Asics’s most prominent market and I see it to grow at a CAGR of 25 percent in the next few years,” says Yasuhito Hirota, president, CEO & COO, representative director, Asics Corp, during his recent visit to India.
The sales break-up in the country vindicates Hirota’s assertions, with over 50 percent business from the brand coming from the performance wear category. Says Rajat Khurana, managing director, Asics India and South Asia, “The target consumer for Asics in India are people who see sports and fitness as part of their lifestyle.” He adds that while in 2004 India had around 30,000 registered runners, it has gone up to 2.5 to 3 million at present. “The trend will only continue.”
India’s sports apparel market was valued at $579.47 million in 2021 and is expected to reach $2,283.13 million by 2029 at a CAGR of 16.2 percent, states a report by market research firm Maximize Market Research.
“In the premium sports gear space, while brands like Puma, Skechers and Decathlon have grown, those like Nike have struggled. That’s got more to do with the internal challenges of companies to figure out an India-focussed strategy. Whichever brand has managed to do it has succeeded,” says Ankur Bisen, senior partner and head, consumer, food and retail at consulting firm Technopak.
Asics had first entered India in 2010 in a five-year partnership with Reliance Retail [a subsidiary of Reliance Industries which publishes Forbes India], and then set out independently in 2015 with its first mono-brand outlet in Delhi’s Select Citywalk mall. The number of such outlets has now jumped to 81, while points of sale have gone up from 100 in the first year to more than 700 now. “In 2023, we plan to open more than 20 mono-brand stores, and increase our points of sales to over 800,” adds Khurana.
Of its total business in India, more than 40 percent is online, up from less than 25 percent pre-pandemic. “We are building and reinforcing our direct website asics.com, and enhancing the customer experience. Direct online business helps us stay closer to the consumer,” says Khurana. As of now, the company derives 11 to 12 percent business through the direct website; it expects the number to reach 20 percent in four years.
Asics is also trying to build its global business around two key consumer demands: Sustainability and customisation. Last year, it developed sneakers that emit 1.9 kg of carbon dioxide during their lifetime, considered to be the most eco-friendly. The product is expected to be launched this year.
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