I was part of youth Research of Nike for sometime, as an external youth expert for a project. “How can youth like white and black!” one of the top executives from the marketing team exclaimed during the consumer analysis meeting at Nike, Bangaluru office. We have conducted a deep dive study to understand the Indian youth psychographics towards sports and their perception on Nike, as a brand/ ideology/ product. Also to test some of the products which Nike intended to launch in India. The result was not a stunner to me but for the Nike India team, I guess. The team wanted to launch a bright neon range of ‘fashionable’ sports shoes in India and most of the participants rejected them stating that the color appears “cheap” and not like “Nike”… they preferred Nike shoes and tees in white/ grey/ black, also suggested that Nike should bring in more serious sports shoes in Indian market from their global collection. In fact, the brand recall of Nike was very high in the category of sportswear. Though, many emphasized that they prefers to buy Nike from “abroad” rather than buying from India as the collection in Indian stores are not “updated” as per the global trend. The ‘counterfeits’ were also an issue and Nike design team did nothing much to ensure that their shoes are stunningly different (visually) than those fake Nike shoes sold in flea markets (ie. Sarojini Nagar, Palika Bazar, Varma Bazar, Chor market or Brigade Road). The price range of original Nike shoes / accessories/ tees available in India were much higher than the existing sports / sport-fashion brands and Nike was perceived as serious sportswear brand in India. Interestingly, when I tried to explain the team my theory of Adopted Differentiation and that Nike should try to remain as serious sports brand rather than competing with Puma or Adidas they thought it is just another ranting from an outsider! In other words, Nike research team tried to stereotype Indian Youth in the same frame of global youth! Globally, Nike is sold to the middle class consumers and Nike presumed that is the right market for their product in India too (with much higher price point). Obviously, the middle class youth of Indian or Bharathiya psychographics were buying “similar looking Nike” shoes from flea market rather than Nike stores. I had a feeling that Nike was trying to presume that, may be, the sample selected (for the study) by me was wrong (though the list was verified by their research executive), or the analysis was not perfect. None of my suggestions were adopted and the paradox in Nike’s consumer segment appeared fatal for the business. I read that Nike's sales have fallen to Rs 764 crore in FY16 compared to Rs 803 crore in FY15 (data from Registrar of Companies). It’s loss widened to Rs 170 crore in 2015-16 compared to a loss of Rs 101 crore in 2-014-15. Further they have started closing their stores across India (35% stores closed already). In other hand, the German sportswear maker Puma, which follows a calendar year, showed accumulated profits of around Rs 47 crore for the year-ended December 2015. Puma places their products as “fashionably sporty” products. In the article I have also read a quote as “I will prefer to buy Nike products abroad than in India simple reason being the do not bring their latest range to India! In my opinion they do not think Indian market is matured enough so no point being the latest products!”. This exactly resonates to what I have suggested them when Nike was trying to get a grip in Indian subcontinent. Nike’s youth-paradox is almost similar to Zara, India. Globally, Zara is one of the easy-to-reach fast-fashion brand targeting middle class fashion-forward youth market, but with higher price point in India, Zara gradually mutated into a higher segment pret line in this subcontinent through the décor of the store, their selective advertisement and conscious selection of product line. The store is predominantly in pastel shades, black and tones of grey (sans bright colors). The ambience appears posh and their stores are located in some of the best malls in India including Emporio Mall, Delhi. I wish, Nike, rather than spreading exponentially could have focused into becoming a serious sports brand for In’glo’dians who can afford the price for innovative highly R&D oriented product. Or, focus on more India specific grass-root innovation at an affordable price range (like Decathlon).
In the article quoted above, Dave Thomas, Adidas Group India mentioned that “India is still not a fitness-oriented market, although it has great potential”. It’s funny on how someone tries to put the blame on client / “market” the moment they don’t succeed in a rate they presumes they should be! If India is not a “fitness-oriented” market then how come Decathlon is building huge shops across India and all of them are successfully running? Its turnover more than doubled in same period in the year 2013—from Rs.60 crore in December 2012 to Rs.128 crore for the year ended 31 December 2013. In a report published last year one must note that Decathlon has doubled the store count in India in the past 14 to 18 months. In May 2014, it had 13 stores. Stores in newer markets, such as Guwahati, were added this year, taking the store count to 24! What is the success mantra of Decathlon? They are focusing on “accessible sportwear/ sports goods” for the “youth minded” individuals. And the consumers in Decathlon’s store are indeed serious sportslovers. May be age-wise they are not teens or tweens. Most of the consumers in the store I have observed are 30+. As I have always stated, age doesn’t matter but the mindset, which unfortunately Nike failed to understand. Nike can never be a ‘fashionable brand’ neither can become an ‘affordable brand’. Indian youth who buys Nike are not the rappers, hiphoppers or follows any cult! They are serious, sweat loving 30+ ‘young at mind’ sports-lovers who wants to access an Original Nike shoe which will be uniquely made for India with global appeal.
Hence, these are few serious take away for Nike team:
1. Consider India as a unique market and don’t stereotype the youth / sports. Research, analyse and then explore, don’t dump the products here and expect them to be bought
2. Set target market right
3. Don’t be judgemental and impose team’s idea on consumer, rather listen to them and spend time to design unique product for Indian market (as Decathlon did for Galli Cricket or Nokia did it in their initial years). Even if it’s a running shoe, the roads of every country are different!
4. Expand Nike’s product range, make them at per global offering
5. Fight against counterfeit by designing unique products which has visible difference from the fake