Puma plans to leap across value chain

The sportswear brand, second in sales, is bringing in brands from its global portfolio to tap the premium consumer, different from its positioning so far

Puma, the global sportswear brand, known for its lifestyle and sports apparel and shoes, is looking to strengthen its position in India. It is up against brands such as Adidas and its sister brand Reebok, and Nike. Under new leadership, Puma is now gearing up to grab a larger market share by bringing some of its global brands for hardcore sports enthusiasts.

Under the leadership of its new managing director, Abhishek Ganguly, Puma is eyeing pole position. According to the Registrar of Companies data for 2012-13 (the latest year for which RoC data is available), Adidas registered sales revenue of Rs 625 crore while Puma registered Rs 497 crore sales, ahead of Nike (Rs 385 crore) and Reebok (Rs 125 cr). In 2011-12, Puma had registered sales of Rs 352 crore. In FY-12 and FY-13, it was the only brand to register accumulated profits. The current market of sportswear is estimated to be Rs 5,000 crore.

Reading the consumer trend of trading up, Puma is bringing its premium global brands to India. Ganguly says, "We are in process of creating a strong brand awareness through various marketing and product-launch initiatives. We are bullish on India and we have seen a major shift to high-end products by Indian consumers. Hence, we want to bring our global sports assets shortly."

Puma has already launched two of its popular global brands - Mobium and Faas in India. The Mobium Ride NightCat, priced at around Rs 9,000, is built for the more traditional heel-striker looking for an everyday pair of running shoes. The Mobium Band is built for those who hit the pavement heel first, ensuring safety. The 360-degree reflectivity and blue LED light, features of the NightCat sub-brand, ensures safety in low-light conditions. Its other brand, Faas 600 S, is in Rs 8,000-range.

Ganguly says the ranges are justified because consumers are ready for high-end technical shoes that cost around Rs 10,000-15,000 for daily jogging. "A few years ago, we saw the trend of consumers buying any kind of sportshoes for jogging by middle-class families. Nowadays, they are more brand-conscious, unable to compromise on quality and ready to pay premium for sportshoes," says Ganguly. Puma is bringing another range of brands which would be technically fit for elite runners and costlier than the Mobium and the Faas series.

It would be a challenge for Puma to make the jump to the higher-end of the spectrum. So far it had been pricing its sportshoes lower than players such as Adidas and Nike. In the Indian market, Adidas has carved itself a position of being a sportswear brand for professionals and pro-use, Nike has retained its youth and innovation pegs while Reebok, after the debacle of mismanagement a few years ago, is trying to reinvent its image as sportswear for lifestyle sports and games.

Puma will back its bid for the premium consumer, by adding more stores. "We don't believe in setting up more stores just for the sake of expansion. We are looking at select pockets. We have identified new malls coming up at Mumbai, Delhi and Hyderabad to start our new stores," says Ganguly.

Puma created a stir with its branding earlier this year when it for its ambassador and the fastest man in the world, Usain Bolt, to India for the first time. Hes formally launched Puma's new global brand positioning, 'Forever Faster', in India in September, 2014. The tagline underlines how Puma wants to be seen as a sprightly sportswear brand.

Puma will have to be careful not to lose its share once it leaps across the value chain.