Nike’s expansion strategy at grass-root level


Nike’s expansion strategy at grass-root level

29 Aug 2012

While the number one mass sportswear brand Reebok is stuck

in a court battle, world’s top sportswear player Nike is planning to replace it by expanding aggressively with a focus on mass segment. Apart from creating a fresh product line for young and up-coming sports enthusiasts, the company would also increase its core connect to athletes.

The American sports-goods maker, the largest in the world, with revenues of nearly $21 billion (Rs 11,659 crores) in 2011, stands at the third position in India, after Adidas and Reebok. According to experts Reebok’s market share in India is at about 50 per cent, Adidas’s 20 per cent and Nike’s 15 per cent.

Now, with Adidas planning to reduce the number of Reebok stores by a third in India, Nike is looking at retail properties to expand its presence. The company which operates out of Bangalore in India would focus a multi-channel distribution strategy and consumer-centric products.

Currently, Nike has some 300-400 exclusive stores, according to industry sources, in comparison to Adidas’ over 650 and Reebok’s nearly 900 stores. All Nike stores in India are franchisee outlets. As a part of its retail strategy, Nike is also looking at increasing its presence through MBOs. In the last few years, Nike has taken its total retail presence, that is, exclusive plus multi-brand outlets to 3,000 from 2,000.

The market for sports goods in India is pegged at Rs 3,500 crores growing at a rate of about 18-20 per cent. In the last few years, Nike has also worked towards building its brand by using a combination of star endorsements, grass roots-level activities and events besides high-profile advertising.