Adidas India slips 2% in revenue, 8% in profit in FY20

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Adidas India, the Indian arm of German sportswear maker, has seen its revenue slide by around two percent for March-ended fiscal 2019-20. While income from operations decreased to Rs1,198 crores from Rs1,221 crores last fiscal, profit after tax (PAT) dipped from Rs174 crore to Rs160 crore, according to financial data accessed by business intelligence platform Tofler.

The company, which boasts of a battery of brand ambassadors such as actor Ranveer Singh, cricketer Rohit Sharma and sprinter Hima Das, gets a dominant share of its revenue from footwear—around Rs755 crore. Contribution of apparels and accessories to turnover stands at around Rs371 crore and Rs48 crore, respectively.

The German biggie, and the world’s biggest sportswear maker, has been consistently ceding ground to rival Puma, which entered India in 2006, a good decade after Adidas set up shop in the country. For calendar year 2019, Puma logged a revenue of Rs1,413 crore.  

Adidas, reckon marketing experts, has been growing at a tardy pace in India. The German brand, which reportedly had a revenue of Rs186 crore in fiscal 2006—Puma in contrast had Rs22 crore—has laboured to clock another Rs1,000 crore over the next 14 years. Adidas reportedly clocked sales of Rs1,132 crore in 2017-18, up from Rs1,100 crore in 2016-17. 

“When the market and the main rival have been growing aggressively, they can’t be seen to be left behind,” says Jagdeep Kapoor, chairman and managing director at Samsika Marketing Consultants. What might have also constrained a wider play for Adidas is balancing another brand within the group—Reebok—which has had its fair bit of issues in India. Segmentation, penetration and pricing are things that the brand must look into, says Kapoor.