Abhishek Ganguly, Co-founder and Chief Executive Officer of Agilitas Sports shares the company’s plans, business model and ambitions…
New Delhi: After almost 18 years at Puma in India and lately as the managing director, of Puma India and Southeast Asia, Abhishek Ganguly, last year bid adieu to the company to start his own sports and athleisure venture Agilitas Sports and swiftly raised Rs 530 crore from a few investors. Ganguly talks to IndiaRetailing about the potential of sports goods in India and Agilitas’ plans to crack the country’s market with a multi-pronged strategy of contract-manufacturing for global brands, partnering with international brands to manufacture and sell their products in India and opening mono-stores of the consumer-facing brands he is planning to sell. Edited excerpts:
A lot of people are curious about what Abhishek Ganguly is up to. If you could share what you have been doing since the last six months?
I have been doing what I always wanted to do—creating Agilitas as India’s largest sports company or platform, which also is globally relevant at some point in time. But, of course, focused on India, to begin with. We would like to be playing in the entire value chain of sports, right from manufacturing and ultimately, retail.
Can you tell us a bit more about Agilitas?
I co-founded Agilitas with Atul Bajaj and Amit Prabhu, whom I have been working with for a long time in my previous avatars. Agilitas is the group company. It is not a consumer-facing name. We raised two rounds of capital last year and we have acquired Mochiko Shoes, a company built by Virender Awal and five other partners over the last 15 years as India’s largest sports footwear manufacturer having facilities in Uttarakhand and Noida.
In my previous avatar (at Puma) I used to do business with them. Mochiko today manufactures shoes for all leading global sports brands. As a contract manufacturer, it has 10,000 people.
How does Mochiko fit into Agilitas’ scheme of things?
More and more brands now want to make in India for various reasons like being closer to the market, regulations and global strategies of China plus one. But in India, sports footwear does not have an established supply chain unlike leather footwear or apparel. There has been a dearth of good quality manufacturing capabilities and that is where we wanted our first starting point.
Today it is a 100% subsidiary of Agilitas and Virender and team continue to operate it; we are just enhancing it by improving its technical capability and increasing capacity so that we can fulfil the growing demand for sports footwear. That is a good Rs 700-800 crore business on the B2B side.
I am super excited about this because enabling global brands to make in India is a great purpose that we believe in at Agilitas.
Would you continue manufacturing for other brands and or also create your consumer-facing brands?
We will play end-to-end. Mochiko Shoes is our first investment, which will become better, enabling brands to manufacture in India and fulfil their retail ambitions. That’s one part.
Now, we will build two other pillars. One is a brand platform, which we will start by the end of this year. There is a white space in sportswear. India is becoming sportier—people are playing more sports, and buying more athleisure products, streetwear, travel gear, and leisurewear—it is a growth category. As per reports, sportswear in India and its various segments will more than quadruple in 10 years.
If you look at the mid and premium segments, which are relevant for global brands, that pie is about Rs 15,000 crore annual market. That will also quadruple. Then there is a Rs 30,000 crore just above the unorganised space. A lot of that share is expected to come to organised retailing. It’s still quite fragmented. That is the Rs 30,000 crore annual business. At least 65%-70% of this opportunity is footwear.
India does not have a history of capacity in manufacturing sports footwear like we have in apparel, for example. When we launch our brands, there is so much headroom, and the size of the pie is growing. There is white space in the affordable aspirational brand segment, given the demographic profile of India with more than 50% of Indians below 25 years of age and more disposable income coming to the middle class. This is where we will play and we will not play with just one brand.
Would you create brands or would you obtain licenses of global brands?
It will be a combination of acquire and build. We are wired up something (with a foreign brand) which we will soon announce. There is a more than decent level of brand recognition for that brand and quite high aided recall (for the brands Agilitas is planning to tie up with) and it would be a long-term arrangement. The unaided recall is still not there for various reasons like the brand’s presence in India. We will just re-energise such brands by building the right kind of product and retail—open mono-brand stores.
But you wouldn’t build brands from scratch?
No. Creating brands takes a lot of time. It is not just about resources and capital. It’s also about the gestation period of the brand and building brand equity. It helps to have brand recognition and if you can buy a brand which has a heritage value where the brand is rooted in sports and has been associated with global athletes, then there is a lot of credibility already established. And that’s when you create an India for India design, development, retail, distribution and marketing, which is relevant to India. You have a success formula.
Also, mind you, we have the supply chain. I am not looking at building 10 brands, but I am also not looking at building just one. The sweet spot would be to build three or four brands—a total addressable market of at least 80-100 million consumers in India and that cannot be done by one brand.
You have said that there is no reason why there shouldn’t be a billion-dollar Indian athleisure company. Now you are taking a stab at that… you have a skin in the game.
Sports will happen in India; it is happening. Although historically, we are not a sporting nation. On the consumer side, that will change. We want to be a part of that, enabling in some cases, being a catalyst, helping the ecosystem. It’s a win-win… there is not a single India-bred brand, which can stand up to global competition.
If you put these things together — the consumer side with a greater adoption of sports, which will coincide with India’s development into a strong financial stronghold having meaningful brands for India. And then the manufacturing capabilities—we would have a strong India-first, globally relevant company—that is the purpose.
Five-10 years down the line, do you see yourself as a billion-dollar company?
A $1 billion company on the revenue side, of course, in 7-8-9 years, but I would not shoot myself if it takes 10 years. Mind you, we have already acquired Mochiko where we are almost Rs 700-800 crore business and that’s a great starting point. But having a billion-dollar revenue Indian sports company is a great opportunity.
