Navigating a complex regulatory landscape and capitalizing on a burgeoning domestic market, ASICS, the Japanese sportswear giant, is strategically shifting its production focus to India. The company aims to increase its local manufacturing capacity to 40% in the coming years, a significant jump from the current 30%. This move comes in response to recent import restrictions imposed by the Indian government, which have compelled global brands to re-evaluate their supply chain strategies.
The Indian government's mandate requires both domestic and foreign footwear manufacturers to obtain quality certifications, a measure designed to ensure product standards. According to ASICS India Managing Director Rajat Khurana, importing footwear without this certification is currently not feasible. As a result, ASICS has temporarily paused imports and is now prioritizing the development of local production capabilities to maintain a steady supply of its products in the Indian market.
This strategic pivot aligns with ASICS' broader growth ambitions in India, a market the company views as highly promising due to its growing population, rising disposable incomes, and increasing interest in fitness and sports. ASICS has set an ambitious goal to become the number one running shoe brand in India by 2026. To achieve this, the company is focusing on strengthening its brand presence, expanding its retail footprint, and deepening its engagement with the Indian running community.
ASICS' expansion plans include increasing its store count to 200 by 2026, with a particular emphasis on penetrating Tier 2 and Tier 3 cities, where there is a rising demand for athleisure and activewear. By the end of 2024, ASICS aimed to operate 120 stores across the country. Currently, around 60% of ASICS' e-commerce sales come from non-metro locations, reflecting the growing adoption of online shopping in these areas. While online sales are significant, offline stores still contribute around 60% to the brand's overall business. In line with this, the company inaugurated its 111th store in New Delhi in October 2024 and plans to open three new franchise stores per month. Furthermore, ASICS intends to open its first brand-owned store this year, with locations in Delhi and Mumbai being considered.
The company's focus on local production is not just a response to regulatory requirements but also a strategic move to cater to the price-sensitive Indian market. While the initial 30% local production caters to the low to medium price points, ASICS hopes that India will soon develop the technology to produce high-end shoes locally. In addition to increasing local production, ASICS is also investing in marketing and brand-building activities. It strategically partners with major running events like the Tata Mumbai Marathon and the New Delhi Marathon to connect with runners and promote a running culture in India. ASICS also uses digital marketing, e-commerce, and AI-driven trend forecasting to stay connected to customer needs and tailor its strategies.
ASICS' commitment to the Indian market is further underscored by its strong financial performance. The company achieved a robust 40% growth in the past year and projects a revenue growth of 35%-37% for the financial year 2024-25. With the Indian sporting goods and apparel category expected to double to $58 billion by 2030, ASICS is well-positioned to capitalize on this growth, driven by its strategic focus on local production, retail expansion, and brand engagement.
