Industry And Cluster | News & Insights

Small towns purchase more sportswear via e-platforms.

Published: February 20, 2020

Sportswear makers say sales in tier II and III towns have grown exponentially in the last few years and contribute a sizable percentage of their revenue now.

Sportswear makers say sales in tier II and III towns have grown exponentially in the last few years and contribute a sizable percentage of their revenue now.

The main factor behind this is the growth in e-commerce sales. A host of smaller cities, those like Surat and Indore,now are ordering more branded sportswear because of the ease of purchase.

Japanese sportswear company Asics says that of the total sales through its own website last year, about 35% was from smaller towns. “When we analysed the data, it was not something we expected. At best we thought it would be about 15-20%, with the rest from metros where we had all our stores,” said the company’s India MD RajatKhurana. “The higher numbers gave us the confidence to open our mono stores in such cities,” he said.

For Under Armour, the American sportswear brand and one of the world’s largest, such sales from tier II and III cities contributed more than 60% to its overall e-commerce sales last year. The company entered the country in 2019 by partnering with Amazon and Myntra, besides opening 10 stores till December. “I would attribute this to the boom in ecommerce and the combination of social media, especially Instagram,” said TusharGoculdas, head of India operations at Under Armour. “The confluence has fuelled aspirations, which was always there but the tough part was having access to such products,” said the company, which counts WWE star-turned Hollywood actor Dwayne “The Rock” Johnson and swimmer Michael Phelps among its brand endorsers.

The growth in sales comes at a time when both Amazon and Flipkart have been focusing on the next set of internet users from beyond the top 10 cities to drive sales growth. In the last festive season sale, both the e-tailers saw a surge in the number of such customers, not only driven by aspirations but also aided by Hindi interfaces on the apps. Industry executives say the sporting culture in such towns have also matured with cities like Surat, Ahmedabad and Chandigarh organising marathons.

“E-commerce makes the discovery of sports products easier,” said AnkurPahwa, partner and national leader for e-commerce and consumer internet at consulting firm EY India. “For example, a tennis racket in a sports store in a small town would probably have 2-3 options, but online one has the ability to review much more,” he said.

For German sportswear brand Puma, such sales now contribute 40% to the topline compared to 20% five years ago. “In 2019, we opened 30 stores in these markets and have witnessed 15% like-tolike growth in these stores. Aspiration in the minds of the consumers is going up, driven a lot by social media and digital penetration,” said Puma India MD Abhishek Ganguly.

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