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
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