After appointing Underdog Athletics as its local distributor and master franchisee, sportswear brand Under Armour plans to launch a direct-to-consumer platform, UnderArmour.com, the franchisee’s Managing Director Tushar Goculdas said.
“Our share of e-commerce presently is very low; much lower than the segment. We plan to change that significantly in the next two-three months,” Goculdas told Moneycontrol.
“Once we launch Underarmour.com, we will be selling the same way as we sell in our stores. Our inventory and the experience we offer to the consumers in our offline stores will be the same at our e-commerce platform,” he added.
Under Armour, based in the US, started operations in India in 2018 and launched its first store in 2019. Last month, the company pivoted to the distributor model and appointed Underdog Athletics, a company started by Goculdas, as its master franchisee and local distributor. The brand has similar models in place in countries in Southeast Asia, South Africa and Japan.
According to Goculdas, even under the distributor model, the company will continue to function in the same way. “This is part of a larger global strategy, which couldn't be seen from the lens of India. We don't see any dramatic changes in the India strategy in the medium term because of this shift,” he said.
Franchisee model
Under Armour operates on a franchisee-based model and will continue to open stores in partnership with franchises going ahead. The company, which has positioned itself in the premium sportswear segment, ideally opens a large 2000 square feet store at a high street or shopping mall with an initial investment of Rs 3 crore (by the franchisee).
The brand currently has 28 stores in the country and plans to add 10 stores every year going ahead. Under Armour is eying the top 40-50 cities in the country for opening its stores, while its D2C platform will help the brand reach consumers beyond the top cities, said Goculdas.
Under Armour will continue to cater to the premium sportswear segment and has no plans to enter the rapidly growing athleisure segment, which is being tapped by several sportswear companies including Puma and Nike.
“Under Armour products are made to help an athlete or a fitness enthusiast deliver better performance. This is the focus of the brand globally and will remain a focus even in India,” said Goculdas.
“We are not a sneaker brand and we will not enter the lifestyle categories like our peers,” he added.
The sportswear brand has an average selling price of Rs 13,000-14,000, which is 40-50 percent higher than the segment and other competing entities. The company is confident of the market potential for performance wear and sportswear in India.
Premium segment
“Premium segment has about 30 percent share in the overall sportswear market and we have a significant portion of this sub-segment. There is a lot of room for growth for us and we will continue to grow at a high double-digit rate going ahead too,” said Goculdas.
Under Armour is a US-based company founded in 1996 by Kevin Plank, which sells sportswear products such as apparel, shoes and other accessories. The company went public in 2005 and began trading on the NASDAQ. Under Armour operates and owns 375 stores globally.
The sports and activewear market segment is projected to increase to $13 billion by FY24 at an annual growth rate of about 14 percent. According to industry estimates, the category had been an outlier in the apparel retail category since the onset of the pandemic and grew 15-18 percent, while demand for other apparel categories suffered.
Puma India, Nike, Adidas, and Decathlon are part of the segment. Earlier this year, Puma India reported revenue of Rs 2,044 crore in 2021, a jump of 68 percent from Rs 1,215 crore in 2020, according to data from the Registrar of Companies. Competitors Nike, Adidas and Skechers follow an April-March financial year and are yet to report their numbers.
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