The Hindu Business Line : Adidas to overhaul distribution

Tennis champ Paradorn Srichapan (left), brand ambassador for Adidas, and Mr Andreas Gellner, Managing Director, Adidas India, at the launch of Barricade III tennis shoe in Chennai on Wednesday. The company also announced `Adidas aces', a national tennis scholarship programme for young talent in India. — Bijoy Ghosh

Chennai , Jan. 5

ADIDAS India is in the process of revamping its distribution set-up. After creating an exclusive department to take care of distribution, the company is re-evaluating its distributors.

The company's Managing Director, Mr Andreas Gellner, told Business Line: "We need people who share the same vision and aggressiveness, and that hasn't been the case with all our partners in distribution." The reassessment will help identify distributors who don't fit in with the company's requirements, he added.

Adidas currently sells its footwear, apparel and accessories through 74 exclusive stores, run by franchisees, as well as 800-1,000 multi-brand outlets, catered to by around 40 of its distributors.

Mr Gellner said the creation of a department with a managerial position to take care of distribution would provide a much-needed focus to the function. "Earlier, everybody was involved but no one felt responsible for it (distribution). The department now will come up with specific programmes in terms of product and marketing support for distributors," he said.

The company is planning to open 20-40 exclusive shops this year, establishing its presence in some of the smaller cities and towns. "We did a successful pilot study on how to reach out to cities with a population below 2 lakh. We can't underestimate the purchasing power and knowledge of the customer. We will carry the entire range of products."

The higher-end sportswear market that Adidas primarily caters to is estimated at around Rs 500 crore. Reebok leads the pack while Adidas and Nike are neck-and-neck behind the leader, according to Mr Gellner.

The company has few items in the sub-Rs 1,000 price point, and they contribute to only 5 per cent of the business. "I don't think we have to change this dramatically. Of course, in select areas, we can always try to price one product very aggressively to open up a new customer base. But you have to be very careful that you don't lose the essence of the brand. We have to make sure the quality and technology aspect is still maintained," he said.

Adidas, which has signed on to kit the Australian cricket team (earlier with Fila), also plans to develop and launch a special cricket shoe. While it will continue to focus on cricket and use Sachin Tendulkar as a brand ambassador globally, it will also look to associate itself strongly in India with football, tennis and hockey.

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