Income inequalities have put the onus of consumption growth on a small group of buyers. But this growth is tapering, leaving companies competing for pieces of a stagnating pie, with serious costs.
“India is a fairly small market for us, with an addressable consumer universe of around 5-6 million as against China’s 35 million.” This was Erich Stamminger, president and chief executive, Adidas brand, Adidas AG, in 2006, 10 years into the global giant’s presence in India.
From then until 2020, India remained a fairly small market for Adidas, with revenue growth of 12% compounded annual growth rate, according to PrivateCircle, well below even India’s nominal GDP growth rate. Profitability was also nothing to write home about, with EBITDA—earnings before interest, taxes, depreciation and amortization—margins mostly averaging 7-8%.
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Ujval leads our Business vertical at The Morning Context. In a corporate career spanning 14 years, he has worked across startups, consulting firms, multinational corporations and large Indian companies, including India Infoline, ICICI, KPMG, Tata Steel and Jubilant Pharma. Ujval has been a freelance writer and trainer for eight years, with bylines in Forbes India and The Economic Times.
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