Rajat Khurana of Asics on how running shoe market has been growing 25% annually
About 65% of the brand’s new store openings are going to be in tier II cities, and the rest in tier I, Rajat Khurana, MD, Asics India and South Asia, said
Consumers have taken to sporting activities such as running and cycling during the lockdown, as gyms pose a risk. Rajat Khurana, in a conversation with Devika Singh, talks about the growing popularity of running as a fitness activity, the company’s offline expansion strategy, marketing initiatives, and more. Edited excerpts:
At a time when footfall in stores remains low and the online channel is taking centre stage, what’s your strategy behind launching new stores?
Though it is true that the pandemic has taken a toll on most sports activities, consumers are increasingly turning towards activities like running. We are very strong in this segment; it contributes 60-65% to our sales. Secondly, several prime commercial spaces have freed up due to the pandemic, hence we thought it is a good time to launch stores. For instance, we have been eying Delhi’s Connaught Place for two years now, but finally managed to open a store there in September.
Our USP is the foot ID scanner which helps customers in identifying their pronation pattern, based on which they can buy the right running shoe. Our conversion rates through this machine are as high as 90%, and this piece is missing in e-commerce. We need to be in the offline space to demonstrate this technology, and be able to sell shoes worth Rs 18,000.
Your stores are concentrated in the tier I cities. Are tier II cities and beyond on your radar?
About 75% of our stores are in tier I cities. However, the expansion this year was majorly into tier II cities such as Kanpur and Ludhiana. We have launched 14 stores this year, and plan to add three or four more by the end of this year. About 65% of our new store openings are going to be in tier II cities, and the rest in tier I.
Our strategy was to create brand visibility in the larger cities and then gradually move deeper. In recent months, we witnessed that the majority of sales on e-commerce now come from smaller towns and this has motivated us to open stores in these towns. Our range here is slightly different from that in the metros. For instance, in our store in New Delhi’s Select City Walk mall, we stock shoes starting from Rs 6,999 to Rs 20,000. In a smaller town, the starting price would be Rs 3,999, going up to Rs 13,000.
As a brand that caters to serious sports enthusiasts, how big is the athleisure segment for Asics?
We are quite serious about this category. All of our new stores have a separate segment showcasing athleisure products. We have roped in Tiger Shroff as our brand ambassador because he fits in both the categories — performance as well as athleisure. Athleisure, however, has taken a hit this year as consumers are rarely venturing out of their homes. Currently, the category contributes 15% to our sales, but our projection last year was that it would contribute over 20%.
In the absence of outdoor sporting events like marathons, what kind of marketing initiatives have you launched?
We have been associated with the Mumbai Marathon for a long time; last year, we had also signed up for the Bengaluru Marathon. We were eying the Olympics and had roped in several athletes and sportsmen. Now that these events have been cancelled, we are focussing on digital. We have allocated 25-30% of our marketing budget to digital now; earlier, a large share of it would go to sports marketing. We are reaching out to influencers, and are also in talks with organisers for exploring a virtual marathon this year.
Brands like Nike, Adidas and Puma have an extensive presence and following in India. How does Asics plan to catch up?
Our competitors have been here since a long time, some since the ‘90s. However, we entered the market when ‘running’ was growing, and have been able to get a considerable share of this market. We are confident that we will achieve their scale at a faster pace. The running market in India has been growing 25% year-on-year, and we have a fair chance to catch up with them.
