Adidas Kicks Off New Initiatives To Strengthen Distribution Network

New Delhi: | Updated: Oct 28 2002, 05:30am hrs
Sports footwear and apparel brand Adidas is beefing up its distribution in a bid to extend its reach across the country. It has entered into a distribution tie-up with Woodland Shoes this month. Earlier this year, it had tied up with national multi-brand retailers like Planet Sports, Lifestyle and Metro Shoes.

Adidas India managing director Tarun Kunzru with the new brand ambassador Virendra Sehwag
Our distribution strategy is to gain visibility through a network of exclusive brand stores, multi-brand stores and distributors. While in the first stage the Adidas range will be present in Woodland outlets only in Delhi, by the first quarter of 2003, we expect to be present in 22 to 23 top Woodland stores from among their network of 55 exclusive outlets, says Adidas India Marketing Pvt Ltd managing director Tarun Kunzru.

Besides its own network of 55 exclusive stores, Adidas is present in 450 multi-brand outlets. It is also in talks with more national footwear retail chains, which are fast emerging as the new face of distribution for a cluster of brands.

Adidas has also roped in a second cricketer, Virendra Sehwag, to be its brand ambassador. Sachin Tendulkar has been endorsing the brand since 1997 and his contract will last till 2004. The contract with Sehwag is initially for a three-year period. However he has a promising career ahead of him and we expect the contract to continue for years, says Adidas director (marketing) Harish Doraiswamy.

Of its marketing budget of nine per cent of sales, Adidas spends around 35 per cent on sports sponsorships. Its tie-up with Leander Paes & Mahesh Bhupathi expires this year. With two top cricketers on its side, Adidas will exploit this to get maximum mileage specially during the upcoming World Cup. While plans are in the process of finalisation, aggressive advertising and promotions are expected to begin only by the year-end.

Dismissing the theory that the onslaught of foreign sports & lifestyle shoe brands recently may have threatened the status of exclusivity enjoyed by the top three-Adidas, Reebok and Nike in the Indian market so far, Mr Doraiswamy said these brands posed no real threat. In fact they were just helping to expand the market. The branded Rs 250-crore sports shoe market has been growing at a rate of 20-25 per cent.

Globally Adidas has three divisions: Sports Performance Division, with its three stripes logo, Sports Heritage Division that is a fusion of heritage and global street styles and Sports Style Division, which has an upmarket, stylistic range of products. What is being marketed in India is mainly the first category of products and a limited range from the second.

The third category includes premium priced products ($300 and above) for which the Indian market will not be ready for at least two years says Mr Kunzru, though in recent times the Indian market is seeing a distinct shift in the buying patterns to cover higher price bands also. In India Adidas range includes sports footwear, apparel and accessories for men, women and children.

Adidas India Marketing Pvt Ltd is a joint venture with Magnum International Trading Company. Adidas India Trading Pvt Ltd has recently hiked its stake in the JV to 91.4 per cent.