India is the fastest growing Southeast Asia market for ASICS: Rajat Khurana

Bengaluru: The India arm of Japanese sporting goods company ASICS Corporation made notable strides in 2023 - launching its 100th store towards the end of the year, alongside clocking a 40% growth in revenues. Today, the brand ranks India as its fastest growing business market in Southeast Asia. ASICS India’s maiden hire as it launched its first outlet in 2015, and its present managing director in the country - Rajat Khurana in all-inclusive interaction with DH’s Shakshi Jain dwelled on the Indian athleisure market and the brand’s future plans. 

Edited excerpts.

What is India’s significance as a business market for ASICS?

Given the rising affluence in India, ASICS headquarters have realised India’s significance. Currently India’s share is very small, the business volume is very small. We are more than a $4 billion company globally. But in the last couple of years India has emerged as amongst the prominent markets for ASICS globally. The fastest growing market in Southeast Asia, I would say. Therefore it will contribute significantly to ASICS’ growth in the next few years.

How much of your merchandise is sourced out of India presently?

We closed 2023 with approximately 30% in terms of the total sourcing value. We started the domestic production 4-5 seasons back - with small quantities of apparel, and now we do footwear also, since the last couple of seasons. We don’t export as much. We have started the export of slides and slippers from India, but the majority of it is only for the domestic Indian market. 

We are ramping up our production in India. As my business is also increasing at a 25% compound annual growth rate, my local production contribution will also increase to 35% in the next couple of years. We believe that this is the key to be in the Indian market.

Elaborate on your expansion plans for the brand in India.

We plan to expand in terms of all the three verticals. We plan to develop our monostores from 100 to 200 by 2026. In terms of our distribution network, we are currently in tier I and tier II cities. We plan to enter tier III, IV cities through our wholesale distributors, increasing our points of sale, which are currently around 800. We will be increasing to around 1,200 by 2026. 

Now we have roughly around 80 employees who work for ASICS India. We plan to add 10 - 12 people in 2024.

The digital business currently occupies more than 30-35 per cent of our total business. I’m keeping the digital share at 35-40 per cent in the next couple of years.

How does your pricing strategy differ for the India market?

In terms of pricing, India is very competitive. Now the world is open, people travel from India to, for example, Singapore or a place like Thailand. I cannot keep pricing which is much higher than in Singapore or Thailand. I have to be competitive. So, the same product that is sold in Singapore is more or less within the tolerance of plus or minus 5 per cent compared to the same product sold in India. 

What are some key trends dominating India’s athleisure industry presently?

When it comes to the fitness industry, what we have witnessed in the last couple of years, especially after the pandemic, is that people are realising the importance of sports and that is driving the industry growth. It is not only ASICS but other brands also have shown a significant increase in their sales numbers in the last 3-4 years. Overall sports is growing in India and within that running occupies the fastest growth.

Globally, if you look at Europe or the US, athleisure is booming there. India is following this trend and catching up. But, we still have a large room to increase in this segment. 

What are the challenges facing the sporting goods segment in India?

A lot of the overall athletic footwear market in India  is still unorganised. The second is - while the apparel infrastructure is very strong for India, be it sports apparel or casual, the sports footwear infrastructure is not as good. The prime reason is that the manufacturing ecosystem is not there. The availability of raw material is still not there. 

If you see entry price point shoes, for example an MRP of $40 or Rs 3,000 shoes, the raw material is there. But when you go to the higher price points of $70 or $120 shoes,  which are high performance shoes, the raw material is still missing in India. It  has to be imported - it can be mesh, PU (polyurethane) or the outsole, which is required for producing such kinds of shoes.  Not only for ASICS but for any of the high performance brands.