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Japan-based sportswear company ASICS will continue with its aggressive expansion strategy focusing on opening new stores and ramping up local sourcing, unfazed by the ongoing economic slowdown.
Rajat Khurana, Managing Director, ASICS India and South Asia, said told BusinessLine, “Growing health consciousness among Indian consumers is fuelling the demand for performance products in the footwear segment, especially in the running shoes category. We plan to open 14-15 new stores in 2020 across metros, tier-1 and tier-2 markets.”
The company is also betting big on the online channel to widen its consumer base in the country. “Nearly 14-15 per cent of our sales come from the e-commerce platforms and an additional 4-5 per cent of the sales come from our own website,” he said, adding that consumers in tier-2 and tier-3 markets are also contributing significantly to online sales.
Company-owned stores
The Japanese sports performance brand currently has 43 stores across the country which are run by franchisee partners. But, in the long term, it could also look at opening company-owned stores under the FDI policy for single- brand retail. “In line with the government’s push towards Make in India, we have been ramping up local sourcing, and currently, it is pegged at about 15-20 per cent. We have also started exporting products to neighbouring countries like Thailand. In addition, we intend to ramp up local sourcing to be able to open our own stores through the single-brand retail route in the long term,” Khurana added.
The government recently hiked customs duty on imported footwear to 35 per cent from 25 per cent and on parts utilised to make footwear from 15 per cent to 20 per cent. “India has a strong ecosystem in the apparel segment and we are have been leveraging it for local sourcing for our apparel products. However, in the footwear category, we rely on imports, especially for highly technologically-driven footwear products. We are evaluating the impact of the recent budget announcement,” Khurana stated.
Earlier this month, ASICS opened its first store in Sri Lanka and it is also looking to expand the brand’s presence in other South Asian markets. “We are now looking at possible partners to enter the Bangladesh market. Initially, we could look at increasing the presence of the brand through the distribution route and later look at opening stores,” he added.
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