He steered Puma's rise. Now, he's on the anti-Puma path for his sportswear startup

By D V L S Pranathi, The Ken | September 17, 2024

When you've had the kind of success Abhishek Ganguly has had, it's very tempting not to try anything different.

In the 18 years he spent at Puma, including a decade as its India head, the German athleisure brand's India revenue shot up from a trifling Rs 20 crore (US$2.4 million) to Rs 3,900 crore. In the process, it beat fellow German rival Adidas to become the market leader.

Then, in 2023, Ganguly quit and floated his own venture—Agilitas Sports—with two of his former colleagues at Puma: Atul Bajaj and Amit Prabhu.

But instead of doing the obvious thing of launching his own sneaker brand and letting someone else handle the production, Ganguly did something odd again. Last September, Agilitas bought India's largest sportswear contract manufacturer, Mochiko Shoes.

By March 2024, Agilitas had already racked up Rs 740 crore in revenue, and was on track for an annualized revenue of Rs 1,000 crore. Ganguly's logic: owning a factory doesn't just mean a slice of the margin—it means almost the whole pie.

"[It] gives you the manufacturer's margin. And in a price-sensitive category and a price-sensitive market like India, having additional margin is worth its weight in gold," he told The Ken.

It's a strategy that places Agilitas in contrast not only to the giants like Puma and Adidas but also the recent homegrown entrants—brands like Comet, 7-10, and Solethreads—that find it easy to outsource manufacturing.

Agilitas, on the other hand, wants to bring the entire operation in-house. Think Birkenstock, the global footwear giant, which controls both its manufacturing and distribution. Only, these brands don't have a century to figure it out, as analyst Satish Meena of market-research firm Datum Intelligence dryly pointed out.

So, as Agilitas bought Mochiko, the company raked in those revenue numbers before even launching its own products. It wasn't until April that Agilitas snagged an exclusive license to design, produce, and sell for Lotto, the Italian sports brand with a global footprint in over 100 countries and US$450 million in revenue.

From its low-key Wework office in Bengaluru, Agilitas has already pulled in Rs 530 crore in funding across two rounds. Rs 400 crore came from Convergent Finance LLP, which now owns 40–50% of the company, and another Rs 100 crore came from Nexus Venture Partners.

Just this September, Agilitas raised more money from Spring Marketing Capital—whose roster includes cosmetics platform Purplle, fashion brand Bewakoof, and jewellery brand Giva. But it isn't just about the money—it's the brand partnerships, as one Agilitas employee noted. They declined to be named as they didn't want to comment on the company publicly.

Investors clearly bet on the Ganguly-Bajaj-Prabhu trio to pull off another Puma-sized victory. Only this time they have an anti-Puma strategy.

Own the whole game

What Agilitas is trying to pull off is almost an anomaly in the sportswear industry.

Most sportswear brands or direct-to-consumer (D2C) startups stick to the well-trodden path: design a product, slap a logo on it, outsource manufacturing, and hope the results come together. But Ganguly isn't playing by those rules.

His company wants to build an ecosystem; from product design and manufacturing to distribution and brand building, it wants to own every step of the process.

This is unheard of. Most brands, especially global giants like Nike or Adidas, don't even attempt this, according to Meena of Datum Intelligence. And for good reason: manufacturing is a logistical nightmare and a huge drain on resources.

"Most of these companies are based in Europe or the US, so they outsource to China, Bangladesh, or India," he said.

In India, the likes of Adidas and Puma outsource nearly all of their production. According to Mochiko's CEO, Virender Awal, about 70–80% of their products sold in India are made by local manufacturers like his company. "Only Nike fully outsources [to other countries]," he added.

"Sneakers are tough to make yourself because it takes several factories to produce one shoe," as one executive at one-year-old sneaker brand Comet explained. "The soles, in particular, are complicated." He said the soles are made using an iron mould that shapes heated rubber, which is a highly specialized process. While one factory handles the moulds, another makes the soles, and a different factory stitches together the upper part of the shoe.

"In fact, the upper part alone has 38 separate pieces that need to be sewn together."

Ganguly, Bajaj, and Prabhu are aware of these challenges. "Building a sportswear ecosystem has extremely high barriers to entry," Ganguly admitted. You need to nail everything—technical products, a supply chain, brand building, distribution. It's a multi-front war.

That's why Agilitas didn't start from scratch; it hit the ground running with the largest sportswear maker—which instantly gave it control over the whole process.

And Mochiko doesn't just stitch shoes together.

"Unlike other manufacturers, Mochiko handles everything from making soles to stitching components," said Awal. "It manages the full spectrum—from design briefs and prototypes to fit tests, cutting, stitching, preparation, assembly, stock fitting, and sole making. It's all in-house."

With factories in Gurugram, Rishikesh, Dehradun, and Noida and employing 10,000 workers, Mochiko churns out millions of shoes for most big brands. That gives Agilitas a key advantage: it's not dependent on third parties, which is crucial given that a sneaker comprises around 45 components, including the outsole, the flap, lining, and laces. For instance, Abros—founded in 2020 by a former Campus top executive and a contract manufacturer for Campus—sources these from around 100 suppliers.

Thanks to India's Bureau of Indian Standards (BIS), local manufacturing is all the rage now, making Agilitas' timing perfect. While global brands can take months to move from concept to consumer, Ganguly claims Agilitas is targeting a 60-day turnaround.

This approach also allows for better inventory management. Owning the factories means Agilitas can pivot on a dime if a product doesn't sell, a crucial advantage in an industry where trends change rapidly and unsold stock can erode margins.

Agilitas is already putting this strategy to work with Lotto. From design to distribution, everything will be handled in-house at Mochiko's Noida facility, with a focus on tailoring products to the Indian market. However, it will still rely on third-party manufacturers for apparel and accessories.

Lotto did not respond to The Ken's questions.

"Every brand manufactured in Mochiko has its own team to make them in a way that their product integrity and technical USP are maintained" - Virender Awal, Mochiko's CEO

Overall, Meena sees Agilitas' Mochiko acquisition as a no-brainer because "building from scratch would have taken years and cost far more. Buying Mochiko saves it time, brings in revenue from the B2B side, and gives them the breathing room to experiment."

In essence, Agilitas is positioning itself to achieve what few Indian sportswear brands have managed: lasting success.

Strategy for the ‘100 million'

Ganguly has a mission for Agilitas: build a brand portfolio that resonates with "100 million consumers". But unlike most brands, Agilitas isn't just targeting sneakerheads. Instead, it's setting its sights on a broad range of customers, from everyday runners to enthusiasts of niche sports.

And he points out, Agilitas "isn't copy-pasting anyone else's business model".

So, the approach is to address what people "actually need" rather than just what they think they want. Take, for instance, the common misconception that a marathon shoe, optimised for speed with carbon-fibre plates, is ideal for everyday wear. It isn't. Ganguly points out that those high-tech soles might cut seconds off a race time but can wreak havoc on your tendons during a casual stroll to the coffee shop.

This insight is central to Agilitas's game plan to encourage repeat purchases and shift consumers from their once-a-year shoe replacement cycle. According to some consumers The Ken spoke to, they splurge on fancy sneakers once every year or two, with prices ranging from Rs 3,000 to Rs 24,000.

Then there is the India factor.

Ganguly is acutely aware that while global brands make some adjustments for the Indian market, they're often minimal—just tweaking sizes and calling it a day. Agilitas, however, is taking a ground-up approach, designing shoes and apparel specifically for Indian consumers.

To lead this effort, Agilitas has assembled a team: Rohan Chaabra, formerly of Ralph Lauren and Space Runner, and Richard Zartman, who spent four years at Adidas before joining Agilitas. The senior director of apparel design and strategy and the vice president of footwear design, respectively, along with Rachel B (senior design director), are tasked with developing products using "proprietary tech" to address the specific wear and tear of Indian conditions and accommodate a variety of foot types For instance, Indian feet tend to be wider with flatter arches, so Agilitas is incorporating wider toe boxes and flatter soles into their designs.

On the pricing front, Ganguly is positioning Agilitas as a high-value, "guilt-free splurge." While it's not targeting the low-end market, it claims to offer "more value" compared to Puma's shoes that cost up to Rs 24,000. Although, Puma's shoes are often heavily discounted on platforms like Amazon and Myntra.

Agilitas's initial push will be through Lotto, with prices ranging from Rs 2,000 to Rs 10,000, targeting both premium and mass-premium segments. Also, instead of mimicking Puma's strategy, Agilitas plans to operate multi-brand stores offering a curated mix of products.

In terms of distribution, Agilitas is planning physical stores, an e-commerce site, and the usual online suspects like Amazon. Although the name "Agilitas" might not be the easiest for the average Indian consumer to pronounce, Ganguly seems fond of its quirk. "Agilitas is a corporate brand, not one meant for the mass market," he said, relying on Lotto's established reputation to draw in customers.

Agilitas plans to open five to 10 Lotto stores by Q2 2025, complete with dedicated apps and websites.

It's a bold move that reflects the trio's track record at Puma. Under their watch, the company pioneered direct-to-consumer marketing and e-commerce, setting trends in digital engagement and local sourcing.

But they were perhaps different times. Athleisure had become a staple post-Covid. But now, the market's cooling could be a challenge.

Big bet on boom

Ganguly isn't losing any sleep. In fact, he's convinced the market is just getting started.

"I completely disagree [with the idea of a slowdown]," he said. "Fast, agile companies that solve for the consumer's needs today will win this game. If you aren't that, you'll always feel like demand is muted."

Goldman Sachs seems to agree. Its March report highlights sports and athleisure (S&A) as the biggest growth driver in the Indian footwear market, fuelled by an active lifestyle movement and the rise of casual clothing in workplaces. The report projects a 13% compound annual growth rate (CAGR) in India's branded S&A footwear category through 2045, with sports footwear already making up 16% of the total market.

Take Metro Brands, for example. Traditionally known for formal and casual shoes, it's shifting gears toward the sportswear segment after securing rights to Fila. Metro's approach with Fila mirrors its earlier success with Crocs. During the pandemic, Crocs turned into a revenue powerhouse for Metro, with some of its stores outperforming even their flagship outlets. That surge pushed Metro's stock price from Rs 470 at IPO to Rs 1,260 by 2023. Now, it's banking on Fila, aiming to expand its 25 stores to as many as 500 over the next few years.

Metro's not the only one. Aditya Birla Fashion's bet on Reebok in December 2021 might've looked like a stretch, given the brand's best days are behind it. But since grabbing the distribution rights, it's been quietly beefing up Reebok's retail presence. Such is the lure of athleisure.

This sneaker boom in India has also spawned a handful of newer players like Comet and Solethreads.

Back at Agilitas, Ganguly's eyes are set on launching two more category brands next year and maybe a third in 2026. But he's cautious, too.

In Mochiko, Agilitas already has the engine—but to score a Puma-sized win, it'll have to navigate a market that's now flooded with choices.