The $11-billion Nike Inc, the world’s largest sports and fitness company, is having a relook at its business strategies in India in the wake of the increase in excise duty on imported consumer goods by about 30 per cent to nearly 100 per cent. The company has decided to operate at a lower margin, rather than pass on the rise in excise duty entirely to the consumer.
Though currently, not even 30 per cent of Nike’s products are imported, the hike in duty is expected to have an impact on the company’s bottomline. Even as a long term strategy, Nike is not looking at importing its full range of products. Sourcing from the global engine enables the company get a variety at least cost.
The Indian footwear market is also structured in such a manner that that its size and scale will not be appropriate for Nike to offer its products at a cost effective price. The company has been launching an average of 30-40 new footwear and about 100 new apparel styles per month. Nike recently shifted its corporate headquarters to Bangalore, where it will have its marketing office, apparel export base and product design centre.