On the opening night of the Beijing Olympics, Chinese sportsman and businessman Li Ning, the founder of a sports goods company and the owner of Li Ning brand, got the kind of marketing boost that global sports goods brands like Adidas, Nike, Puma and Reebok would die for. Li Ning lit the Olympic flame!
Which one of India’s sports goods brands can hope to get a boost anywhere close to that at New Delhi’s Commonwealth Games (CWG) 2010? The answer seems obvious with Indian sportspersons like Sachin Tendulkar, Sania Nehwal, Sania Mirza and Gautam Gambhir promoting international sports brands like Adidas, Yonex and Reebok over Indian sports brands like Shiv Naresh, Stag, SS and Pioneer.
With Nike replacing Shiv Naresh as the official sponsor of the Indian cricket team, non-sports brands like Panasonic being the jersey sponsor of the Hockey World Cup 2010 and international sports brands like Puma and Reebok re-orienting their strategies to sponsor the Indian Premier League, Indian sports brands are usually invisible during such international events.
And so it seems Indian sports brands will be missing in the CWG 2010 as well. While attending a presentation on “Sports retail in India: Opportunities, constraints and the way forward”, held recently at the Indian Council for Research on International Economic Relations (ICRIER), the Indian sports goods manufacturers pointed out that the government was not doing enough to promote the Indian sports brands through the CWG. They argued that even though India was a manufacturing hub for sports products and some Indian brands were approved by international federations, they did not get enough visibility in the domestic market.
While non-sports brands like Hero Honda have already signed up as CWG sponsors, and other Indian companies are also being approached along with multinationals like PepsiCo and Coca Cola, few Indian sports brands hope to get any boost from this mega sports event. The reason behind this is that Indian sports goods manufacturers, who largely concentrate on contract manufacturing for foreign brands, have not yet invested in building their own brands, both at home and abroad. Being small and medium enterprises (SMEs) that sub-contract to foreign multinationals, Indian sports goods manufacturers have not done enough to build “Brand India” in sports goods. Moreover, unlike the rest of the world, in India there are different councils for sports apparel (Apparel Export Promotion Council), footwear (Council for Leather Exports), etc. under different ministries, which do not have a holistic approach to providing an integrated sports product, leave aside brand building.
The success of Chinese brand Li Ning in the Beijing Olympics 2008 vouches for the importance of brand building at international events. While Li Ning lost the games sponsorship bid to Adidas, it stole the show on the opening night.
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Appropriate strategies like sponsoring apparel of mediapersons and other international teams like the Spanish and Swedish Olympics teams and the Argentine national basketball team, among others, helped it establish international visibility and recognition. Clearly, the appearance of athlete and entrepreneur Li Ning as the final torchbearer of the Beijing Olympic Games gave his company priceless visibility and a boost that the official sportswear sponsor might covet. The brand promotion did not stop after the Olympics. The brand is now supporting three top US basketball players as a strategy to enter the largest sports market — the US.
Since India is hosting many international sports events like the Hockey World Cup and the CWG, there is a focus on sports this year. In fact, the sports retail market is expected to grow at the rate of 20-25 per cent over the next three years. Thus, Indian entrepreneurs have to shift their focus towards becoming good brand marketers in place of being mere sub-contractors.
The sports SMEs, despite their small size and limited funds to invest in brand building, could achieve this through a two-way strategy. A few SMEs (a holistic group of apparel, shoes, equipment manufacturers) can come together under one umbrella with a large pool of funds and approach sports manufacturing and export promotion councils as a single brand. The different councils can then work together and support them by promoting such brands domestically and internationally. This will not be difficult since the latest Foreign Trade Policy (2009-2014) lists sports is a priority sector, and hence there are funds allocated for marketing and promotion.
Indian SMEs are sceptical about sharing information. They treat each other as competitors. Collaboration rather than competition will be their key to success in a world where they face strong competition from well-established foreign brands. Each of them may be small, but together they are not insignificant. They also need to learn from Chinese SMEs that have used the technical knowledge gathered in the process of sub-contracting to develop Chinese brands.
Also, it is important to understand the link between brand popularity and sports popularity. The ICRIER study highlights that, in India, if a particular sport is popular in terms of high viewership and fan following, brand association with it can work very well. Since individual players and teams can influence brand selection for the sports products they use, Indian brands should approach individual players and teams to promote their brands.
The key is to manoeuvre and establish brand presence domestically and internationally in the face of obvious limitations, just the way Li Ning did. Though Indian sports goods manufacturers might have lost the opportunity to sponsor the CWG 2010, they can still try and come forward with a winning stratagem.
The author is a researcher at ICRIER
Views expressed are personal
dsatija@icrier.res.in