NEW DELHI: Nike is reported to be closing a third of its stores in India to reduce its losses, with some observers questioning its marketing approach around the recent Olympic and Paralympic Games.
"As part of its strategy, Nike is reducing its number of partners in the country and will be working with just three or four to run its operations here," according to a senior industry executive quoted by the Economic Times.
Cost-cutting measures may also extend to ending sponsorship of the bats of individual cricketers, although the sports brand will continue to sponsor the national team's kit.
The focus by brands on cricket – and Bollywood – has come for criticism in the wake of the Rio Games which produced a total haul of six medals from the two events, an underwhelming return for a country of 1.3bn people who enjoy sports.
For example, Nike supported the Olympic Gold Quest, a not-for-profit organisation that worked with promising athletes, providing assistance with training, nutrition and kits.
But when it came up with its Da Da Ding communication to celebrate the country's female athletes, it used a Bollywood actress as the lead.
"Celebrities are used by the brands to gain quick awareness, but Nike as a brand has been all about sports and the brand would have done better showcasing the women athletes," said Naresh Gupta, partner of creative design agency Bang in the Middle.
BMW came in for similar criticism, using cricketer Sachin Tendulkar as the face of the brand giving away vehicles to India's gold medal winners in Rio. "What if BMW had signed up any of the three or all three Olympics medallists as the faces that drive the brand in India?" wondered Gupta in the Financial Express.
"Consumers want to look beyond conventional stars," he said, as he urged brands to rethink their use of celebrities.
The relative success of India's Paralympic athletes may help that process. "These winners can create a niche for every brand as they embody rich values of grit, ability to overcome adversity and have brought glory at the highest sporting levels in India," said Anil Ramachandran, CMO at IndusInd Bank, which ran a programme supporting them.
Data sourced from Economic Times, Financial Express, FirstPost; additional content by Warc staff