Puma Plans Huge Investment In Technology; Eyes 35 New Stores
The German sports apparel brand Puma has completed more than a decade in India. The clothing and sportswear brand was one of the late entrants in the Indian market in comparison to their competitors Nike, Adidas, Reebok and others.
Abhishek Ganguly, MD, Puma India feels that the journey has been phenomenal so far. "We had to do a lot of catch up but we grew up from an unknown brand to gain market leadership in flat eight years." He said.
Puma believes they have not done different things but did things differently in terms of brand engagement, communication and marketing. "We didn't come here and copy pasted somebody's else's model we created our own."
In pursuit of profitability
In the last three years, the sportswear brand witnessed a decline in the profit. In 2014 the brand registered Rs 29 Cr of Profit which becomes Rs 12 Crore in 2015 and going forward in the latest data available Puma registered a loss of around Rs 3 crore. Reacting to this, Ganguly stressed that if compared to the competition their brand has maximum profit against any other competing brands. He assured things are on track for the next year.
"We are on a growth curve, we are making huge investments and you will see this in growth and sales this year everything is on track better than planned," he added.
Puma does not believe in over expanding and that is the reason they have shut down only eight stores so far. Currently, the company has 353 stores across 120 cities. In last one year, Puma has added 60 new stores and plans to add 35 new stores in coming one year. All these stores will be in Tier I, II& III cities.
Currently, 293 Puma stores are operated by the franchise and 60 stores are owned and operated by the company. The upcoming stores will also be mixed bag between company and franchise.
Major Investment Ahead
The German brand is making a huge investment in technology to change their approach towards the market. Primarily the investments are on the front of e-commerce and consumers. "Going forward e-commerce is the future and brands who don't do this will suffer." Said Ganguly
The brand is trying to get into multi-channel and Omni-channel environment. The idea is to deal with the customers directly with their flagship platform Puma.com. The brand will also be present on all the leading e-commerce platform. For this, Puma is changing their entire mindset. Earlier it was doing product management, offline retailing and merchandising.
We are set to wear another cap to become hardcore e-commerce player, which requires re-engineering the entire organisation. And technology is the starting point. Said, Puma's MD
The brand is listing their products from their warehouse to different e-commerce platform including Puma.com. And integrating the warehouse with real-time across all the e-commerce platforms.
"We are doing things as an organisation which we have never done before. Why we are doing it because if we will not do it, we will not have a direct handle on the consumer."
Currently, Puma's 25 per cent sales come from Online and Abhishek Ganguly is expecting it to increase it to 38 per cent in the coming two years. The C and D towns are pushing sales for Puma India and in 2015-16 12 per cent of orders came from these towns. Every year the demand is increasing since e-commerce makes small towns viable.
GST impact
Ganguly feels that GST will have a very positive impact on the economy and it will bring lots of transparency. He said, "We had to do lots of changes in our IT systems and so does our e-commerce and franchise partners. And that was a difficult period for all of us. The business had downtime for five to seven days as you cannot ship."
He sees GST more of an operational problem than demand problem. While Puma has taken the decision not to increase the price. We are in the growth phase of the business and we would like to create more demand."
Puma is also known for their unconventional marketing strategy. The brand doesn't believe in traditional marketing as they feel there is a better way to reach consumers. Sharing more, Ganguly said we only associate with someone who we think our consumer can relate to and Usain Bolt is a true example.
Ganguly feels that the eight-year deal with Virat Kohli will be a game changer for the company.
