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Athletic FootwearIndustry Analysis

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Introduction•

The athletic footwear industry in India has witnessed aphenomenal growth of functional sportswear market in the

country.

• The athletic footwear industry in India has witnessed a

phenomenal growth over the past seven years and now

occupies a place of prominence in the Indian economy interms of its massive potential for employment generation and

export.

• The industry has witnessed brisk growth in the last few years

driven by the rising income levels, amending lifestyles and the

entry of foreign players in the industry post liberalization.• The ever increasing popularity of cricket along with growing

interest in sports such as football, hockey and tennis has

contributed to the to the growth of functional sportswear

market in the country.

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• The country is hosting a series of international

sporting events which is likely to boost the

industry and increase sports awareness.• In addition to this, Indian government is

increasingly focusing on sports promotion,

training and infrastructure, and exports of sports

goods which include sports apparel, footwear andaccessories.

• The restructuring and transformation of the

athletic wear industry from unorganized sector to

a professionally organized sector has also

esteemed the growth of the Indian market for

athletic apparels and footwear over the past few

years.

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Types of Shoes• Based on survey data by NPD group of purpose of athletic

footwear• Nearly 50% of sales is for “Casual Athletic” and “Running” 

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Size of MarketATHLETIC FOOTWEAR

MARKET SIZE ESTIMATES

Pairs Sold in Millions

1998 1999 2000 2001

Men’s  155.200 161.661 170.316 175.010

Women’s  106.486 115.755 125.999 119.973

Children’s  106.508 102.986 111.676 106.961

TOTAL 368.194 380.402 407.990 401.943

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Size of Market  

• The males’ segment of the athletic footwear

market have contributed significantly to the total

market revenue in 2012, with an active demand

for basketball shoes, lightweight running shoes,

training shoes and soccer boots. O

• n the other hand, the Athletic footwear market

has witnessed a strong demand for female

athletic shoes, especially from the school/college

going teens and young mothers.• While, teens primarily demand for training and

sports-inspired casual shoes for their outdoor

usage, mothers have showcased preference for

toning and running/jogging shoes.

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• Several factors, including a thriving middle-class

population, a paradigm shift in consumers’

attitude to health and fitness, an increase in the

number of sports events and the growth of

organized retail will drive the market.

• In addition to this, recent regulatory changes

made by the government on FDI in retail, passed

by the Union Cabinet, are expected to give a

further impetus to the organized athletic wearmarket in India. 

Reasons for increasingMarket Size

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Market Share

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Market Share 

• The global athletic footwear market was worth

USD 74.7 billion in 2011 and is expected to reach

USD 84.4 billion in 2018, growing at a CAGR of

1.8% from 2011 to 2018.• Asia Pacific is leading the athletic footwear

market with maximum share and is expected to

enjoy a 41.6% share of the market in 2018,

closely followed by Europe.• The North America market is growing at a

relatively slower rate, due to high labor cost, raw

material cost and strong competition.

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Reason For increase inMarket Share

• Factors driving the global athletic footwear

market include growing awareness about

healthy and active lifestyles, rising demand

for comfortable footwear, rising demandfor innovative footwear designs and

technology, growing population and rising

disposable income levels.

• The market is projected to grow at a CAGR

of 1.8% from 2011 to 2018, and is

expected to reach USD 84.4 billion in 2018.

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Consumer Purchasing Habits

 – Traditional

• Mall

• Retail outlets

• Shoe store

 – Non-traditional

• Internet, television

 – Footwear is one of

fastest growing

categories ontelevision

 – television reach 100

million homes

Source: Footwear Journal USA

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Consumer Purchasing Habits

• Who?

 – Men spend more per pairand buy more pairs ofathletic footwear thanwomen

 – Women’s and Children’s

shoe sales growing morerapidly than Men’s

 – Nearly 33% of all athleticfootwear spending isdone by those aged 13-24

 – Less than 30% of athleticshoes purchased are foruse in sports or fitnessactivities

• How?

 – Internet

orders (via

websites)

 – Telephone

orders

 – Walk-in orders

(mall, outlets,

etc)

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Major Competitors

• Nike is an American MNC that is engaged in the design,

development and worldwide marketing and selling of

footwear, apparel, equipment, accessories and services.

•The company was founded on January 25, 1964 as BlueRibbon Sports by Bill Bowerman and Phil Knight, and

officially became Nike, Inc. on May 30, 1971

• The largest seller of athletic footwear and athletic apparel in

the world and a major contributor of sport equipments with

a revenue in excess of US$24.1 billion in its fiscal year 2012.• As of 2012, it employed more than 44,000 people worldwide.

The brand alone is valued at $10.7 billion, making it the most

valuable brand among sports businesses.

NIKE

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Adidas• Adidas is a German MNC that designs and manufactures sports clothing

and accessories

• It is the holding company for the Adidas Group, which

consists of the REEBOK sportswear company

• Besides sports footwear, Adidas also produces other

products such as bags, shirts, watches, eyewear, and other

sports- and clothing-related goods.

• Adidas is the largest sportswear manufacturer in

Germany and Europe and the second biggest sportswear

manufacturer in the world.

• Adidas was founded in 1948 by Adolf Dassler, following the

split of Gebrüder Dassler Schuhfabrik  between him and his

older brother Rudolf.

• Rudolf later established PUMA which was the early rival of

Adidas. Registered in 1949, Adidas and Puma are both

currently based in Germany.

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Advertising by Adidas

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Advertising bySkechers

• Skechers makes an effort to maintain a trendy

and stylish brand image by using celebrity-driven

advertising,[1] and has promoted its product with

singers Brandy, Britney Spears, ChristinaAguilera, The Black Eyed Peas, Ashlee

Simpson, Carrie Underwood and David Cook;

actors Robert Downey Jr., Rob Lowe and Matt

Dillon; athletes Joe Montana, Karl Malone, Rick

Fox, Meb Keflezighi and Wayne Gretzky; and TV

personalities Kim Kardashian, Kris

Jenner and Brooke Burke.[2] 

C tit B i

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Competitor BusinessStrategies

• Nike

 – High quality

construction

 – Innovative design

 – Collection based

marketing

 – Focus sales on

distributors, licensees,

and subsidiaries

• Adidas

 – Form follows function

 – Marketing

department begins

design process

 – Greater emphasis

placed on design for

an athlete’s need 

Source: Nike website and 10K and Adidas website

C tit B i

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Competitor BusinessStrategies

• Reebok 

 – Grow sales through

distribution channels

 – Focus on relationship

with major sports

figures to enhance

brand image

 – Resources devoted to

advertising through

various media

• Skechers

 – Fashionable footwear

 – Does not concentrate

on performance

 – International

expansion by

leveraging domestic

brand image

 – Building brand image

Source: Reebok and Skechers websites and 10K reports