Japanese sportswear brand Asics is planning local sourcing in India so that it can apply for FDI and benefit from lower duties. Considering its competitors like Nike and Puma have already got FDI clearance to start their own stores, Asics has to wait till it completes the 30 per cent local sourcing norm before it can get away from the franchise model.
Unlike its peers who are looking at manufacturing ‘Make in India’ products, Asics is still an imported footwear brand although it has started some amount of local production for apparel recently.
Speaking to BusinessLine, Rajat Khurana, Director, Asics India, said: “While we are an imported brand, we should soon start with 10-15 per cent of local footwear production in the next two to three years. Applying for FDI requires us to have 30 per cent local sourcing and some of our competitors like Nike have already met these norms to start their own stores in the country.’’ With FDI in single brand retail, foreign companies can own and operate their stores instead of having a local franchise operation and is also expected to help in lower prices in the country.
Currently, Asics imports its footwear primarily from China and Indonesia, much like other international brands including Clarks and Skechers, despite having Indian partners for their ventures.
“When we entered India, we had signed a general distribution agreement with Reliance Retail which lasted for four years. We have our subsidiary since 2015 and expect sales to triple by 2017 as the market is growing and we expect to get profitable with economies of scale,’’ added Khurana.
In India, Asics is now positioning itself from a sportswear to a lifestyle brand. “India is changing and it is the lifestyle segment which is growing at nearly 20 per cent,’’ added Khurana. Currently, Asics has 14 monobrand stores and expects to add another 12 stores this year. It has also been spending on events like the Mumbai Marathon by becoming the official sponsors for three years to build its brand in the country.
Asics, which has its headquarters in Kobe in Japan, has its biggest markets in the US and Europe and considers Japan as its second largest market.