NEW DELHI: American sports apparel company Under Armour Inc may be coming in late to this market but believes it has the “advantage of not being up against legacy” in its efforts to catch up with the dominant international names in the Indian game – Puma, adidas, Reebok and Nike.
Baltimore-based Under Armour opened its first brick and mortar store in India at the DLF Promenade Mall in the capital on Tuesday. The 1,900 square foot store is the first of ten the sportswear maker plans to debut this year in one of the world’s largest and fastest-growing economies.
At the inaugural celebration, founder and chief executive officer Kevin Plank, president and chief operating officer Patrik Frisk and Olympian Michael Phelps underscored the importance of the Indian market to Under Armour’s long-term international growth strategy.
Running the operations in this market is Tushar Goculdas, who was appointed managing director of Under Armour India at the beginning of the month. Goculdas joined Under Armour after nearly a decade with adidas where he most recently served as brand director, Emerging Markets and was based in Dubai.
“We are excited to open our first retail location to introduce the Under Armour brand and our world-class athletic performance products to athletes in India,” said Plank. “As a nation with a long, rich history in sport and an accelerating focus on health and wellness, we look forward to building a strong foundation for our brand in India and driving our ability to achieve even greater long-term, international growth.”
“We are opening another store in a few months in Mumbai. We think we are going to have around 10 stores by the end of the year. We’ll combine that with online presence,” Frisk added.
Frisk believes that though late as compared to its competitors such as Nike, Adidas and Skechers, this is the ideal time for the brand to invest in the Indian market, with the country adopting a multi-sport and fitness-oriented culture.
“India is the last piece of the puzzle in this part of the world for us, and an incredibly important market. We believe that India and China are the two markets where the growth is going to come from in the future,” Frisk told The Hindu Business Line.
“We believe consumers in India are now increasingly starting to think about their health and fitness. The athletic performance products market is fast evolving and we want to come in and grow this market further. We may be criticised for being late to India, but we were very realistic when we started thinking about our India entry. But we think this is the right time for us to enter the Indian market.”
Under Armour is planning its expansion in the world’s top two populated countries through local franchises than single-brand retail, while focusing on the athlete performance segment.
Frisk estimates that selling its products on e-commerce platforms such as Amazon and Myntra will reap more dividends in India with time as compared to other countries as they contribute 10-20% of sales revenues there.
“I think it’s the right model for markets such as India and China. If you want to scale up quickly, you need to be able to leverage on the local knowledge of the franchise partners. So, part of the reason for this strategy was scale and part of it is was to be able to tap into the expertise of Indian entrepreneurs as our partners.
“We are taking a very different approach than some of the other players. We want to make sure we remain true to the performance segment and we believe it’s going to be our strength in the longer term,” he concluded.
Under Armour is looking to grow internationally after seeing its sales plateaued in the US in recent years. Under Armour has focused specifically on the Asia Pacific, where stars like New England Patriots Quarterback Tom Brady and Stephen Curry of the Golden State Warriors have led tours across China, Japan and South Korea, the Baltimore Sentinel reports.
Under Armour estimates a $32 billion market for “focused performers” exists in the Asia Pacific and India.
Lance Allega, vice president of investor relations for Under Armour, said in an interview the company is “taking the long view” as it launches its brand in a new country. He said the company has a 10-year plan and will not be opening hundreds of brand houses all at once. Under Armour had 140 total stores internationally, including 67 brand houses, as of December 31 2018.
International sales, currently about 25 percent of Under Armour’s total sales, are projected to more than double and account for 42% of total sales by 2023,the Sentinel reports. Sales in the Asia Pacific region are expected to experience percentage growth in the mid-20s from 2020-2023
The youth of Under Armour’s business means the company has a large runway, Allega said. Under Armour has the ability to be more nimble and flexible as it expands so it can more easily adapt to changing trends, unlike its larger competitors.
“We have the advantage of not being up against the legacy,” Allega said.
