Market leaders are not always the first to enter the market.
The rise of PUMA Group
In 2006, PUMA was the last to enter the Indian market and clocked a revenue of 22 Crores.
Meanwhile revenue of other players were at,
- Nike: 4x
- Adidas: 8x
- Reebok: 18x
Nike and Adidas [believed] were dominating the Indian sports industry by associating with Cricket. One was the official sponsor of the Indian cricket team kit and the other had Sachin Tendulkar as their brand ambassador.
But the truth is, despite doubling revenue, Nike was still not profitable.
Where did they go wrong?
Understanding Indian consumer mindset!
When we are trying to buy a sports shoe, do we just buy one shoes for all sports we play, or do we buy different shoes for each sport we play? I am sure most of our answers would be the former.
And also, not giving enough credit to how price sensitive we Indians are.
So, who cracked the market then?
Reebok positioned themselves as a fashion brand and a style statement, remember the ‘Reebok Zig Tech’ ads? While Reebok still reeled in youth sports icons like Dhoni and Yuvraj, the marketing communication was never about performance, it was about their style.
What this did was position Reebok along side with Lee Cooper, Fila, Levi’s and UCB, who made functional casual shoes but never were an expert shoemaker like Reebok. Imagine we get a shoe that is fashionable and good quality at the same price? STEAL!
Now, what has this got to do with PUMA?
2012, Reebok got into 8,700 crore accounting scandal.
The brand value took a nosedive, and the stores started shutting down. This put all the distributors into distress.
PUMA, just grabbed this opportunity. They did three things intelligently.
1/ Followed Reebok’s positioning blueprint by being fashion brand but with a lot more aggression
2/ Launched a series of products that were affordable to Indians to remove price as an entry barrier for consumers.
3/ Became the answer for all distributors problems by filling in the gaps due to Reebok.
In 2020, Puma clocked 1400+ Crores of Revenue
- Nike is 0.6x
- Adidas is 0.9x
- Reebok is 0.3x
Its wiser to learn from other people's mistakes.