Reebok India, the leader in the branded sports footwear industry is heavily discounting its

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merchandise such as watches and apparel as it attempts to increase its market share in India.

The heavy discounting could be a major challenge to its brand positioning, said industry experts. Sajid Shamim, brand director- Reebok India said, “We generally liquidate our old merchandise.”

“Brand positioning of Reebok products has definitely taken a beating with such heavy discounting strategy,” said Harminder Sahni, founder and managing director at Wazir Advisors. “However, this could be a well-thought-out strategy wherein the company is positioning Reebok as a mass brand since cricket is a mass game. Whereas, it is positioning Adidas as a premium product at its stores,” added Sahni.

The German sporting goods manufacturer Adidas-Solomon took over its rival Reebok in a €3.1 billion deal in the year 2005. In some cases such as watches and apparel, not only are products being sold online at heavy discounts to their maximum retail price but also being sold with original packaging and warranty card by street vendors at prices as low as Rs 100 for instance.

“The company is spreading itself too wide which could be risky to brand getting devalued. Ideally, Reebok should fill the mass-premium category,” said Arvind Singhal, chairman at Technopak Advisors. Reebok leads the Indian sports market with 900 exclusive franchise outlets and presence across the country. The brand has several cricket celebrities as its brand ambassadors, including MS Dhoni, Gautam Gambhir, Yuvraj Singh and Harbhajan Singh.

“Reebok is over-buying and over-targeting and discounting heavily on its products which in turn is affecting other players,” said Lokesh Mishra, AVP-sales and operations, Clarks Future Footwear. But Shamim said, “We have strong product innovations through the Zig and RealFlex platforms. We are in the highest price-points in the market in the sports footwear category.”

The premium-brand sportswear market in India is estimated to be around Rs 20,000 crore, 70 per cent of which is controlled by Reebok and Adidas, Subhinder Singh Prem, managing director- India operations, Reebok had said at a press conference in April this year. The rest of the market is controlled by brands such as Nike, Puma, he had said.