Low prices key to reaching Indian consumers

12 February 2010

NEW DELHI: Brands in India must keep their prices low so that young consumers can "experience" their products, a strategy that is being followed by Reebok, the sportswear giant.

The US company has developed a substantial distribution network in the Asian nation, and now operates 900 stores across the country.

Its share of the footwear and athletic apparel market stood at 54% last year, up by 3% on an annual basis, having sold 3 million pairs of shoes and 8 million items of clothing in this period.

However, Subhinder Singh Prem, managing director of Reebok's Indian arm, argued that "the consumption of shopping is changing a lot in India."

"People used to go to the store to shop. Today, they go on the internet, direct media, they order stuff over the phone. Young India is experimenting with shopping in a very different way," he added.

One advantage of this trend for brand owners is that it enables them to extend their reach, but it is also important that their products are not too expensive.

"The price of the goods is kept low because many consumers are experiencing the brand for the first time," said Prem.

"It is more of a penetration strategy where we try and get more people to experience the brand."

Reebok recently launched its EasyTone and HexRide trainers in the country, with the latter range being promoted by MS Dhoni, the celebrity with the most brand endorsements in India.

Other initiatives have included building a new web portal targeted at children, and which has recorded two million hits to date, and teaming up with fashion designer Manish Arora to make premium products.

More broadly, Prem suggested "there are many micro-trends that are getting increasingly noticeable" in the fast-growing economy.

"The Mumbai and Delhi half marathons this year received an overwhelming response with registrations for both filling up weeks ahead of the events," he said.

"So people are taking pride in sporting activities. It is a new social activity. We have identified it and associated with it. Then the second step is to build the relationship."

Data sourced from Economic Times; additional content by Warc staff