Business Today

High on cricket

Buoyed by cricket gear sales, SG pads up to open its innings in the sports apparel and footwear arena.

Anumeha Chaturvedi        Print Edition: Feb 20, 2011

Work is in full swing at the Sanspareils Greenlands, or SG, factory in Meerut, where 900 workers churn out English and Kashmir willow bats, Test cricketworthy balls, gloves and other protective gear. The pace is clock-like and by the end of the day, some 1,000 bats, 550 pairs of gloves, 400 pairs of pads and 60 dozen balls are ready to be shipped to big brands overseas such as Nike and Reebok, and to a network of distributors in India.

 

The brand has enjoyed a steady customer base here and is used by players under different labels
Sachin Tendulkar and Mahendra Singh Dhoni, who are expected to set the pitch on fire this World Cup starting February 19, may be sporting Adidas and Reebok gears, but it is very much possible that their willows came from the SG factory in Meerut. SG's biggest brand ambassadors are Virender Sehwag and Suresh Raina today.

Since its launch in Sialkot, now in Pakistan, in the 1930s, the company had focused entirely on exports for decades. However, sometime in 2007 SG figured that its export markets in Australia, the UK and South Africa were getting saturated, says Paras Anand, a third-generation director at the family-run SG. While the company continued with the focus on cricket , it decided to give more attention to domestic sales.

Over the past two years, SG opened another manufacturing facility in Meerut to meet demand; entered into contracts with top players like Raina, Sehwag and Rahul Dravid; increased headcount across categories like marketing, sales, production and sourcing; and started investing in marketing and advertising.

SG Chairman Kailash Anand (right) with nephew Paras (centre) and brother Trilok, both directors
SG Chairman Kailash Anand (right) with nephew Paras (centre) and brother Trilok, both directors
The strategy has paid off. The company's revenues - split almost 50-50 between exports and domestic sales - are growing at an annual rate of 25 per cent and expected to close this financial year at Rs 80 crore, up from Rs 60 crore last year. The share of exports has steadily gone down. "The proportion of exports to domestic sales was 55:45 last year, and we are planning to reverse it this year," says Anand.

Buoyed by this growth, the company is planning to foray into uncharted territories now. "We will launch Maxxport, our sports-inspired apparel and footwear label by mid-March. The sports apparel and footwear market is growing at 20 to 30 per cent. A bigger market means bigger growth," says Anand, adding he expects Maxxport sales to touch Rs 15 crore by 2013. The year will also mark the debut of SG's own brand in the overseas markets - a move considered a little risky because its whitelabel overseas buyers may not want to deal with a potential competitor.

Industry veteran Tarun Diwan, however, thinks the setback, if any, will be temporary. Diwan, who is the Secretary of the Sports Goods Export Promotion Council, says: "The brand has enjoyed a steady customer base here and is used by players under different labels internationally. If they take this risk it will be worth it." Risk is not unfamiliar turf for SG.

Launched as Greenlands by Kedarnath, Paras Anand's grandfather, the company began as an exporter of football and hockey equipment. The family moved to India after Partition, and had to start from scratch. "For a long time, we survived on payments for goods exported from Pakistan," recalls father Trilok Anand, also a director in the company. The company was plagued by other troubles too; competition was intensifying in sports goods with technically-innovative products being manufactured in countries like China.

Unable to keep pace, SG shifted wholly to cricket gear in the 1960s. After two decades of slow and steady growth, the brand was registered as Sanspareils Greenlands in 1979 and made its national debut in 1982, with Sunil Gavaskar as brand ambassador.

Technology was the key to success in the '80s: the launch of the double-finger-protection gloves, designed to help Gavaskar after an injury, and an ideal combination of cotswool and cork balls, which found favour with the Board of Control for Cricket in India. "Their quality of production is by far the best in the game," vouches Gavaskar.

 SG's Retail Road Map

  • Entering the Rs 3,000-crore apparel and footwear category with Maxxport brand in March
  • To launch in Vishakhapatnam, Bhopal, Mysore and Bangalore
  • Expansion through multi-brand outlets after two years
  • Rahul Dravid to be the brand ambassador for Maxxsport

Maxxport will source footwear and accessories from suppliers in China and apparel from facilities in Bangalore and Ludhiana. A test launch is planned for mid-March, for which Rahul Dravid has been roped in. Initially, sales will be through multi-brand outlets in Vishakhapatnam, Mysore, Bhopal and Bangalore, and will be stepped up to a network of around 1,000 stores in 450 cities and towns later.

The positioning will be value. "While the average price of a Reebok or a Nike product is about Rs 1200, a domestic brand costs around Rs 400," says the younger Anand. "We are entering a new category of sports apparel and footwear, offering products which are on a par with the international brands in terms of quality, but are about 20 to 25 per cent cheaper."

But fighting the Goliaths will be tough. "The brand is not visible to top-end consumers, and as India matures with large-format stores, this will be a shrinking market approach and their market size could drop," cautions Ravdeep Singh, CEO, Planet Sports, a multi-brand sports lifestyle chain. The Indian Council for Research on International Economic Relations, or ICRIER, a New Delhibased think tank, last year predicted a growing domestic market for sports goods but also warned of intense competition, with global sports retailers expanding operations here.

SG may have its answer in a tagline it has grown up on for decades - Only the Best Survive - which it will replace with "Believe, Become" in the coming weeks.

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