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A man holds an adidas shoe during production
© dpa
From sportswear to luxury attire: German fashion booming in India

June 16, 2008

When Germany’s adidas decided to enter India in 1996, the domestic demand for fashion sports apparel in the country was not high. In the first nine years, India was the smallest sub-division in Asia in terms of revenue. In 2008, adidas considers India a key market for the €10.3 billion adidas Group.

India is fast turning into a fashion conscious country. According to the Nielsen Global Luxury Brands Study, India is amongst the top three most brand conscious countries in the world. With higher spending power, Indians are looking for quality products and German brands are making their presence felt in this field too.

One of the earliest brands to make an entry into India, adidas recently announced plans to expand the number of franchise outlets in India to 450 by the end of 2008, from 325 now.

Andreas Gellner, Managing Director of adidas India Marketing Pvt Ltd told, “We see a market growth at around 20-25 per cent currently and over the next few years. The growth will come mainly from expanding our adidas exclusive store network from currently 325 stores to around 950 in 2010.”

During the first quarter of 2008, adidas Group sales increased 10 per cent. Group revenues grew 3 per cent to €2.621 billion from €2.538 billion in 2007.

Though figures are separately not disclosed for India, revenues in Asia grew 18 per cent to €594 million in 2008 from €501 million in 2007.

Says Gellner, “We believe India can be a top 10 market in terms of size across all our brands by 2012.” Adidas sells adidas, Reebok, TaylorMade and Rockport brands in India. Encouraged by the high growth rate, adidas plans to invest eight per cent of its total sales from the country on marketing initiatives. The German brand has been promoting cricket and tennis in India at various levels.

In May 2008, adidas announced plans to come up with an apparel and accessories collection named after India’s tennis ace Sania Mirza. The Sania Mirza collection will include apparel, headgear, accessories, bags and sporting gear. The lifestyle portfolio of the collection will be launched in September and sports gear in January 2009 to coincide with the Australian Open. The collection will be sold worldwide through Adidas stores.

Another German sports brand PUMA is no less enthusiastic about India. In April 2008, Puma entered the largely unexplored swimwear segment in India. By roping in cricket veteran Sourav Ganguly as its brand ambassador and placing its products in movies like Shah Rukh Khan’s Chak De! India, PUMA is undertaking innovative marketing techniques to make a mark in India.

Rajiv Mehta, Managing Director, PUMA Sports India, told, “India is an important part of PUMA’s growth strategy. We believe in the potential that the country has to offer. PUMA has hence set up a subsidiary to look after its operations with greater detail and with a lot more aggression.

PUMA entered India in 2005 and currently has 21 exclusive brand outlets in various cities and is looking at closing the year at 35 stores.

According to a recent McKinsey Global Institute study, the average Indian consumer will be spending an average of Rs 200 per day by the year 2025. The study also stated that if the country maintains its current growth rate, average household incomes will triple over the next 20 years and India will become the fifth largest consumer economy by 2025.

Mehta adds, “All consumer brands have tremendous scope for growth in India. It is a young, English-speaking and fashion conscious nation. As a result it is just ripe for a lot of brands to come in and establish a base to build on.”

German brands are in high demand in India. Adds Gellner, “German product and quality experiences high regards here in India.”

A premium German brand to have made an impact in India is Hugo Boss. Over the past two years, the label has opened four stores in India – two in Mumbai, one in Delhi and one in Bangalore. The brand’s menswear collections Boss Black and Boss Orange have tasted huge success in India. Hugo Boss is now eyeing Hyderabad, Chennai, Kolkata and Ahmedabad. The Delhi market could soon also sport a second store.

Another German luxury brand bullish on India is ESCADA. An international luxury fashion group in women’s designer fashion, ESCADA generated Group sales of €686.1 million in the year 2006-07.
Targetting to launch and position ESCADA in the Indian market, the brand opened a flagship store in Mumbai in 2007. Soon, another store was opened in the capital city, New Delhi. By 2009, ESCADA plans to open seven stores in India, including a second in Delhi.

by Sakshi Arora
© German Information Centre New Delhi
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