Nike bets on India with Rs 3,795 running shoe: Can it drive growth?
Nike has launched its first running shoe designed specifically for India as the sportswear giant looks to tap into the country's growing running market. The move comes as the company faces falling sales in key markets, including China, and searches for new ways to drive growth, reported Reuters.
The shoe, called Vegam Run, was unveiled on Wednesday. It follows Nike's announcement earlier this month that it plans to open a new campus in India, underlining its efforts to strengthen its presence in the country.advertisement❮❯ Read Full StoryNIKE VEGAM RUN: PRICE AND LAUNCH DATEThe Nike Vegam Run will be available on India's e-commerce marketplace Flipkart from November 1. The shoe is priced at Rs 3,795, or around $40.
Nike said the shoe was developed in about five months, with its design created specifically for the Indian market.
The launch comes amid a running boom in India, giving Nike an opportunity to reach more consumers as it looks to expand its business in the country.WHY NIKE IS BETTING ON INDIA
Nike's India push comes at a time when the company is struggling to regain momentum in some of its major markets. Chief Executive Officer Elliott Hill, who is two years into his tenure, is banking on a refreshed product range to help turn the business around.
Analysts believe locally designed products in key markets will play an important role in Nike's recovery.
China, which has historically been a major source of profits for Nike, remains a particular concern. The country accounts for around 15% of the company's annual revenue, but sales there have fallen for nine consecutive quarters as international competitors and domestic sportswear brands gain ground.
Nike's shares have also fallen by more than 40% so far this year, adding to the pressure on the company to find new growth opportunities.RUNNING BUSINESS OFFERS SOME RELIEF
Despite the challenges, Nike's global running business has emerged as a bright spot. The segment has recorded double-digit growth for six consecutive quarters.
However, this growth has not been enough to offset weakness in other parts of the business.
Earlier this month, Hill warned analysts that Nike's performance business was still not large enough to make up for pressure on Nike Sportswear, the Jordan brand and its Greater China operations.
The company has also projected a steeper-than-expected fall in full-year revenue.
With the launch of the Vegam Run and plans for a new campus in India, Nike is looking to build on the country's running boom and find fresh avenues for growth as it works to address its wider business challenges.- Ends
