Nike, Adidas shoe-maker to set up manufacturing units in India with Rs 2,000 crore investment

One of the world’s largest footwear manufacturers, Yue Yuen Industrial Holdings Ltd., has announced its intention to invest Rs 2,000 crore in India over the next five years. The company, which makes shoes for global brands like Nike and Adidas, plans to set up a manufacturing facility in Tamil Nadu and create 10,000 jobs.

Why India?

The move is part of the company’s strategy to diversify its production base and tap into the growing demand for sports and casual shoes in India. According to a report by Euromonitor International, the Indian footwear market is expected to grow at a compound annual growth rate (CAGR) of 9.6% from 2020 to 2025, reaching Rs 59,373 crore by 2025. The report also states that sports footwear is the fastest-growing segment in the market, with a CAGR of 13.3%.

What are the benefits?

By setting up shop in India, Yue Yuen hopes to benefit from the lower labor costs, favorable government policies, and proximity to a large consumer base. The company also aims to leverage India’s strengths in leather and textile production, as well as its skilled workforce. “India is a strategic market for us and we are committed to contributing to its economic development and creating employment opportunities,” said Andy Lee, chairman of Yue Yuen.

What are the challenges?

However, the company also faces some challenges in entering the Indian market. One of them is the competition from local players like Bata, Relaxo, and Paragon, which have a strong presence and brand loyalty among Indian consumers. Another challenge is the infrastructure and logistics issues that may affect the efficiency and quality of production. Moreover, the company will have to comply with the environmental and social standards that are required by its global clients.

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