INDIA: Reebok Takes A Chance With High Price Traxtar Shoe

Reebok took a leap of faith when it launched its Traxtar range in India last Saturday (September 9). The shoe will retail at US $78 - $76 more than the Indian leather shoe average of US $2. The price of the new range amounts to around three months of the average Indian salary. The new line contains a microchip and a small display on the upper that measures the wearer's performance in three separate modes - jump, run, and walk. Targeted at 7 to 14-year-olds, the launch has been timed to coincide with Olympic fever.Although the athletics event has never achieved much popularity in India in the past, this is likely to change. India currently has the third largest cable TV population in the world, and newspapers are already devoting full pages to Sydney. Reebok, which has a major Indian production base set up in collaboration with leading footwear exporter Phoenix, will be sourcing Traxstar from China. Reebok entered the Indian market five years ago when it set up an 80:20 joint venture with Phoenix, then owned by Mr Atul Kalsi. About three years back, Reebok started purchasing Phoenix shares, and currently owns over 95 per cent of the shares, according to a Bombay-based Reebok manager. Last year, Reebok India sales were around Rupees 700m, ($15m). Around three per cent of sales are to children, although that figure could rise with the Traxtar launch. Reebok has also announced plans to launch its classic and weekend warrior lines this month, along with a high tech apparel range. Nike, Adidas, Lotto, and K-Swiss are also fighting for the rich Indian's purse, although the oldest brand, Bata, still dominates the volume market on the basis of its retailing presence and established image. Traxtar, launched in the US in June, is a product of three years' research and Reebok holds patents on the range's innovative design.