Adidas to venture into e-tailing to protect retailers' margins

The Adidas Group is planning to put in place a new online model in India. The move is aimed

at protecting its partners' turf from the fast growing internet shopping sites, and to open up a new channel of growth for itself as well as its retail partners. The online model would be operational by the year-end. As per Erick Haskell, MD, Adidas Group the Group is working on a closed marketplace model, which would be spearheaded by one of their retailers under the guidance of the company.

The Group already has its own e-commerce businesses in limited markets such as the US and the UK. While in India, several domestic retailers like Future Retail, Reliance, DLF Brands, and the Aditya Birla are looking closely at the online model, this is a rare instance of an overseas consumer product company using the e-commerce route to garner higher sales. Haskell says all Adidas stores will have a tablet, connecting 80 percent of its retail universe. So if a product is not available in one city, it can be made available through another shop or city, thereby not losing out on any selling opportunity. He believes it will lead to better inventory management, considering there is varied demand depending on demographics. Meanwhile, the brand will continue to sell through online portals such as Flipkart and Amazon directly. His only concern is that they shouldn't sell new products at a discount, which their regular retailers object to.