Puma bolts down the track

The sports brand takes on rivals Adidas, Nike and Reebok in the country, follows a smart expansion strategy and banks on targeted digital and event-led branding

Four years ago, Abhishek Ganguly was on his way out of Reebok. He had been poached by Puma and was asked to head the German company's India operations. One of his directors pulled him to the side and questioned his decision. He wondered why a rising star would join a company that would be an also-ran in the Indian market. A market, dominated by Nike, Reebok and Adidas. "What kind of sales will you even do?" his boss asked.

It was Ganguly's decision to make and he took the plunge. Today Puma has emerged as the market leader. As of March 2015, according to the registrar of companies (RoC), Puma's sales were worth Rs 877.83 crore, Nike Rs 803.80 crore and Reebok made Rs 332 crore. Puma was the only company that made a profit in 2015 at Rs 46.94 crore. India is now the only strategic market where Puma outstrips its traditional rivals.

Puma credits its rise to a smart store and pricing strategy and 'trend setting' marketing campaigns. "Uniqueness of product, planned retail expansion," Ganguly says. The company has consistently tried to play in the sports-lifestyle segment, a vertical that didn't exist before Puma started it, he adds.

Positioning it right
"We were not just about sports performance. We wanted to connect to young consumers who want to wear a sports brand on the street, not just while training," says Ganguly. The positioning helped the company break even in the third year of operations.

The brand has the likes of Usain Bolt and Arsenal football club as ambassadors. Bolt has a cult following in this country while Arsenal has numerous fan centres cropping up during televised matches. "Our primary consumer is the youth, the millennials. We flew down Bolt to India… you can't imagine the crowd," Ganguly says. These associations meant that while Nike and Adidas paid huge sums to establish an Indian connect, Puma just rode on its global image.

It kept marketing costs low by going digital with its advertising and using events to push the product. Their association with IPL and ISL and the '#choosetricks' campaign cost almost nothing, but earned them Rs 8 crore (in sales of mismatched shoes). The campaign originated in England where, one of its brand ambassadors, French striker Olivier Giroud, took to the field wearing mismatched boots. It caught on in the IPL.

"The commentators noticed the shoes and started talking about it. We did not have to spend on promoting this as the idea was unique," Ganguly laughs. It was organic. And as all things viral, users took to Instagram to photograph themselves wearing mismatched items of clothing. But who wants to wear mismatched items of clothing? "Our user base was under the age of 22," Ganguly said. Finally, last year Puma signed on Jacqueline Fernandez to promote the brand. Not an A list star, but she got the buzz going.

"We are the only brand to have motosport licenses in India. We have all the four big aspirational brands: Ferrari, BMW, Mercedes and Redbull. This accounts for 20 per cent of our revenue," he says. Customers want to wear specialised shoes as streetwear, he explains.

Measured steps
"India is a complex market… we used simple business practices," Ganguly says. Puma has been cautious about opening new stores and has shut just six stores in its lifetime. "Three were shut because the market moved away. A new mall came up and the customers moved, so did we," says Ganguly.

Currently, Puma has 350 stores in 120 cities and Ganguly isn't in a tearing hurry. "We have not done madness. Other brands have more stores than us. We have never chased the number of stores, rather we chase the opportunity. We have been focused on the sales per square foot," he says.

"There have been instances where the competition has multiple stores in the same area," he hints at Nike having three stores at Connaught Place in Delhi or Adidas having two on the two km stretch on Linking Road in Mumbai. It is a concept, he explained, that has worked in the West but failed in India. "It ends up cannibalizing demand and compromises profitability," he adds.

The company has deliberately kept its price bands stable, refusing to go up or down with the frequency of its competitors. "We try to keep our prices constant as much as possible. We have to keep up with inflation but we don't raise them too high, which means we end up creating a larger spectrum and making it appear cheaper in comparison," he explains.

The product, Ganguly explains, isn't just about style and price. Puma keeps a close eye on what and how the franchise stores are selling their products. "We have the same backend across every store. I know exactly which centre buys what kind of product and we tailor our supply accordingly," he said. A store in New Delhi's Connaught Place will stock differently from one in Dehra Dun for instance. The company keeps fine tuning the supply to keep the wheel turning.

What next for the brand? Puma was the first to apply for a single brand license and "The experience (in the future) won't be too different. But, it will be special," he says.