Boxer Mary Kom was recently appointed as brand ambassador for Puma India, joining fellow endorser Virat Kohli. In addition to this, the sportswear brand is not only expanding its offline footprint, but also fortifying its online sales through Puma.com. Abhishek Ganguly of Puma India talks to Sonam Saini about the new FDI norms in e-commerce and the brand s focus on customer experience. Edited excerpts:
Puma India reported sales of Rs 1,157 crore in CY 2018, up from `958 crore in CY 2017. What contributed to this growth?
We continued the trajectory in 2018 with 21% growth. Currently, the brand has a strong momentum globally, and that has had a positive impact in the Indian market as well. Some of our products, like the Hybrid Runner and the RS-X sneakers, were successful in 2018. Our focus in creating best-in-class customer experiences in our exclusive stores and our investments in supply chain have also contributed to the growth. Apart from these, our marketing campaigns have helped us build engagement with our consumers. Our preferred choice of media is digital almost 90% of our marketing budget is spent on digital media.
How has the entry of international brands like Fila, Hummel and Under Armour impacted the first movers in India?
When we entered the market in 2006, there were a few established players in India who had been there for more than 10 years. Yet, we attained market leadership in 2014 and have maintained that position. We have been extremely cognizant of new entrants in the last five years.
The marketplace is dynamic and consumer behaviour is changing fast. Our approach needs to always be futuristic. We will continue to launch innovative products, focus on customer experiences and tell compelling stories through our marketing campaigns. I am confident of our growth in India in the following years.
Apart from sports shoes, how much revenue do related categories like sports apparel contribute to your portfolio?
Sportswear and sport-inspired products have been our areas of strength. Some of our sneakers have a strong heritage. Take the Puma Suede, for example, which has been around since 50 years. Sportswear accounts for half of our business in India.
How will the new FDI rules in e-commerce impact your online operations? How much does online retail contribute to Puma India s overall revenue?
We sought 100% FDI approval for single brand retailing, including online, around two and a half years back. Today, we sell directly on all marketplaces, and our own site Puma.com is an important element of our strategy. Being a direct seller reduces our dependence on any other large seller; it also helps us list our current range of products online and maintain price parity with our offline stores. The current ruling doesn t impede our growth plan at all.
Roughly 20% of our business comes from e-commerce, out of which 3% comes from Puma.com currently small, but we expect this to become 10% in the next couple of years.
Are you planning to expand your offline footprint?
We have 365 exclusive stores in India. We have opened 20 of them in the last one year. We will continue to invest in opening new stores; tier II and III markets will be the focus in the next phase of our expansion.
How has the association with Virat Kohli and Mary Kom worked out for Puma? Are there any event sponsorships on the cards?
We are in the initial phase of our eight-year partnership with Virat Kohli. The One8 collection launched in collaboration with Virat has made a significant contribution to the business. In our association with Mary Kom, we will provide her with the platform to engage with women in India, and inspire them to be their best despite challenges.
We associate with several running events in India. We are the sports partners for the Airtel Delhi Half Marathon and Tata Steel World 25K. There is a fitness movement in India and we will continue to contribute to it.
What is your revenue forecast for this year?
Our target is to grow revenue by 25% this year. From this, the percentage of our marketing budget will be in double digits.