Adidas India head Andreas Gellnerwho shares lessons he learnt from Indian consumers

I have been in India since 2004 and with Adidas for over 14 years now. Before India, I was heading the Malaysia operations. At €12 billion ($16.5 billion) in 2010, Adidas is the world's second-largest sporting goods-maker after Nike. Our headquarters has identified India, China, Russia and North America as growth markets and it expects them to contribute 50% of the sales growth by 2015. In 2005, Adidas bought over Reebok but the two continue to exist as separate entities. In India, we faced a unique situation-it is perhaps the only market where Reebok leads Adidas in sales and revenues. And together they dominate the sports-gear business.

The missing sports culture

It is not easy to sell sports gear and accessories to a nation that does not have a sports culture and does not look beyond cricket. What is even more interesting is while sports viewership is huge, participation is low. All this makes India complex for us. Even a mega sporting event like the cricket World Cup doesn't spur high sales in India, as you get lost in the clutter as there are so many brands that are associated with the sport. Realising this challenge, we signed up Sachin Tendulkar 11 years ago, a bold move and a big financial decision for us as the business was very small.

This is so different from other markets like Japan, Europe or the US where there are many sports and different brands identify with different sports. Adidas is closely associated with football globally. But now we are investing heavily in football in India, which is our brand DNA. A football fan myself, I have now learnt to love cricket here. You go nuts if you don't follow cricket in India.

Playing catch-up with customers

Indian consumers are very demanding. Till the time they buy local brands, their expectations are low. But the moment they buy a pricier international brand, their expectations rise. For them, just the brand power does not work. The durability, functionality and comfort of the product are as important. This is very different from what we see in other global markets where the brand gets a lot more credit by virtue of just its brand power. At the end of it, the average Indian buyer makes a very rational and analytical purchase decision.

But they are changing fast. Barely two decades ago, they preferred non-branded products. There wasn't a culture to spend on brands. Social and economic changes have helped bring a consumerist culture. This has helped companies like ours and other multinational companies to capitalise on our brand power.

While Indian customers have become brand conscious, the brand differentiation is yet to come. Till as recently as two years ago, Puma, Nike, Reebok and Adidas in India were perceived the same. They didn't have a distinctive brand persona. This is quite unlike say an American, British or a European consumer where he/she has very distinct image of each of these brands-flashy or sporty or fashionable. In fact, there, each brand has a distinct association with a specific sport.

I also see a growing willingness among Indian consumers to pay a premium for a brand. Brand preference and loyalty too are rising among them. Since Indian customers are fast evolving, it remains a volatile market with much less visibility of what is going to happen in the future.

Dealing with fakes

It is interesting to see how Indians approach the issue of fake products as against other countries. An Adidas consumer in India makes a conscious decision to purchase a counterfeit Adidas product. This is very different from some of the other South-east Asian markets where fake products are very sophisticated. Having spent 16 years in the business, even I sometimes cannot distinguish between an original and a fake Adidas jersey in a Chinese, Malaysian or a Thailand market. Thankfully, the manufacturers in India are not as advanced and most of the fake manufacturers are in the unorganised market.

When an average Indian customer walks into our store to buy he makes a very deliberate and rational purchase decision. It will be dangerous for us to break the price point barrier between counterfeit and an original by lowering our price range, as doing so will dilute the premium that our brand enjoys.

For us, the focus now is to reduce the lead time of 18 months from design to the shop. The lead time makes us lose out on the new trends that emerge. We've to make sure that the right product reaches the right place; the north and south preferences in colour and fabric with a different price point makes it a dynamic yet complicated market.

(As told to Monica Behura)