Asics, the Japanese sportswear giant, has announced plans to increase its manufacturing operations in India from 30% to 40% over the coming years. This move is aimed at maintaining a stable supply chain, following changes in the country’s regulations that have led to a halt in footwear imports.
The Indian government has recently introduced a set of standards for different footwear types. These regulations demand that both local and international manufacturers secure quality certifications. In response to these rules, Asics has paused its footwear imports, citing the impracticality of importing without the required government certification.
Local Production Strategy
In order to navigate this challenging situation, Asics is working towards enhancing its local production capabilities. “We are strategically developing local production capabilities,” stated Rajat Khurana, Managing Director of Asics India.
During the 2024-25 fiscal year, Asics achieved 30% local production. This achievement meets the government’s required threshold, which permits foreign brands to run their own single-brand stores in India.
Expansion Plans
With approximately 125 stores currently being operated via franchise partners, Asics is now planning to open its first brand-owned store within the year. The company is actively exploring potential locations in and around major cities such as Delhi and Mumbai, with plans to establish a few more outlets in the years to come.
In addition to directly owned stores, Asics also intends to open three new franchise stores every month until the end of the year. The brand, which competes with internationally recognized names such as Nike, Adidas, and Skechers USA in the Indian market, is set to capitalize on the country’s growing fitness culture.
Financial Outlook
Asics is optimistic about its financial prospects in India, predicting a revenue growth of between 35% and 37% for the fiscal year 2024-25. This projection follows a 26% increase in revenue during the previous fiscal year, which saw its earnings rise to 4.28 billion rupees (US$49.7 million).
The company, which is particularly known for its running shoes, is benefitting from the rising interest in fitness, tennis, and pickleball among India’s affluent urban dwellers. The local market for sporting goods and apparel is anticipated to double by 2030, reaching US$58 billion, up from the 2023 levels, as per a 2024 report by Deloitte.
Questions & Answers
What is the reason behind Asics’ decision to increase manufacturing in India?
Asics is boosting its manufacturing in India in response to new regulations that have halted footwear imports.
What are Asics’ expansion plans in India?
Asics plans to open its first brand-owned store in India this year and aims to establish more in the coming years. The company is also looking to open three new franchise stores every month until the end of the year.
What is Asics’ projected revenue growth in India for 2024-25?
Asics is expecting to see a revenue growth of between 35% and 37% in India for the fiscal year 2024-25.
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