ASICS is a quintessential Japanese sports clothing brand that has a truly global outlook. We speak with CEO Motoi Oyama who explains the job behind creating a globally recognized brand in a crowded market, the key targets for 2016 and the company’s position as a great advocator of a multicultural, multinational staffing approach. We also look at ASICS’ role as a Gold Partner in Japan for the Tokyo 2020 Olympic and Paralympic Games, and why strengthening the footwear and apparel business will be a key part of the business growth strategy.
How well recognized do you think ASICS as a Japanese company is around the world, such as in the Americas, Europe and Asia?
Although ASICS is a Japanese brand, I feel that it is not always recognized as a Japanese brand. I have spent some time in Europe, and once a colleague and I researched about the impression and the image of the brand. We found out that in Europe the majority thought ASICS was an American brand and only the minority believed it was Japanese. In my opinion that is good thing. We are not Toyota or Honda. I think this is an advantage. We prefer being simply international; we don’t judge it as French, Dutch, German or American but as a global brand.
Could you update us on the company’s five-year growth plan that is coming towards its completion, at the end of this year, and targeted the net sales of approximately ¥400 billion?
Actually, we will reach ¥425 billion, as announced this mid-November, and therefore exceed the original five-year growth plan in terms of revenue. Operating income and net profit will be below our initial target for several reasons, the principal one being the adverse currency rate between the Brazilian real vs the US dollar.
What are the targets in 2016?
Our mid-term plan should end by 2020, which is after the Tokyo Olympics. We will soon announce the next mid-term plan starting from January 2016 to the end of 2020.
Your business market is extremely competitive. How do you position yourself when it comes to branding?
In our sector, innovation doesn’t stop in the footwear market, but it also touches on the clothing segment. This is a very important factor for us. The market has started to change direction with the ‘sporty casual’ trend, taken over by Nike and others. It is important for us also. We have focused too much on regular players, runners and athletes, which represent the backbone of our business, but the young generations who are in their teens or 20s have other focuses and interests.
These days also, running has become very popular – whether it is to keep in good shape or for esthetic reasons. It has become a part of the physical activity to keep oneself in shape and healthy. In Japan, China, the US and the UK, we see a lot of full or even half marathons organized in local areas. It is a part of competition. But another way of looking at it is calling it a ‘fun run’. The first initiative has been taken by the young generations in their late teens or 20s. This phenomenon is on the rise even in Europe and Asian countries. Therefore, we have to target those younger generations.
As a brand, innovation is one of our top priorities, while cosmetics should match to consumer needs.
We have begun to see a number of Japanese companies starting to perform better recently, however we still see a number of ‘big ticket’ companies falling behind their competitors in international markets. How do you see the overall competitiveness of Japan and its capacity to further globalize?
The word globalization has taken over in Japan. Globalization was a big motto in the first mid-term plan under the AGP 2015 also. We established a seamless organization starting from Japan and then reaching the US, East Coast, West Coast, and then we went to European countries, and then to Asia and Oceania. We have established our regional offices in New York, Amsterdam, Singapore, New Delhi etc. As an international company our motto is to tie-up with each country and each region, and then create competitive, strong and trend-setting products. The idea is to have a strong international line and regional product collections.
ASICS as a company is very much an advocator or great promoter of having a variety of different staff, taking a multicultural approach. How important is this to the company?
In our efforts to globalize the company, we have also accelerated the recruitment of employees from various nationalities over the past five years to help maximize our performance.
Regardless of where you are operating, sharing the knowledge is key. At ASICS we believe that product design should be both international and regional. Customers’ tastes and choices vary from region to region. Even in the US, people have different tastes in Chicago, Seattle, or San Francisco. Yet we should be very careful in the way we handle SMU and SKU items, otherwise we are always going to suffer from decreased productivity and if they cannot sell, and always we face close-outs and reduce the profit, but under such management, we respect each country.
Regarding marketing, this is very difficult. In the past, each country had a very individual approach where they wanted to do what they want under the name of marketing. I don’t think this is good – we are like French and Italian luxury brands, we have to give it the same tone and image to the customers. Therefore, from 2006, I enforced and adopted a harmonized international marketing, with the same tone, manner and image, and we have done this from 2006 to this date. We are therefore also careful to standardize our corporate visuals, pictures and advertisements. The visual should be the same but adapted differently into English, German and French etc. Even our public relation efforts and promotion need to be in tone with our international marketing.
The US represents a crucial business partner to a great majority of Japanese companies and institutions. How you are looking to enhance your presence in the US?
In addition to being one of the fastest growing and the biggest markets, the U.S. is a very much sports-oriented country, with a large sport focus and a long sporting history. There are a number of success stories in the United States. From a business point of view we don’t think we should fully relocate there, we should stay over in Japan, so even if the body is here, the mind should be there in the US. As a US citizen, we have to think how we are going to grow, how we are going to drive the product, we should not be visitors but full-time citizens in the US.
Obviously the opportunity to host such prestigious and prominent event as the Olympics provides Japan with the great opportunity to encourage both young and old generations to be more involved in sports and an event, which could last a legacy for Japan. I know you are a Gold Partner for Tokyo 2020. What will ASICS’ role be in the build up to Tokyo 2020, and also its participation? And what would you hope to leave as a legacy?
The Olympics/ Paralympics are very special in our company history as our founder had been quite inspired by them. Therefore, being a Gold Partner for the 2020 Tokyo Olympics/Paralympics is testimony to the company’s belief that our values of a sound mind in a sound body and ASICS’ spirit fully match the Olympic Movement, and we are excited to support this event as an opportunity to contribute to transform Japan and also our organization over the next five years.
We have learnt lot of things from London 2012. I was there for 24 days. For example, what we learnt from London is the opportunity to regenerate the city. I think it is high time to renovate or reform parts of Tokyo – not only for the Tokyo 2020 Olympics, but beyond. Tokyo is a fantastic city that has many splendid sites and famous attractions, however there are not enough places where kids and elderly people can play and exercise. So it is important to create some spaces, some sports fields and facilities, mainly for our youth. In addition it is also difficult in Japan to find a coach, and teach our youth how to play sports, throw a ball, catch a ball, how to play rugby, how to play judo, etc. So it is important to develop and promote sports in general, and we are trying to do our share to promote this. By the time the Olympic starts in Tokyo, we will be promoting strong concepts, such as how to educate or train children, and how to train their coach, and how we create appropriate spaces. As a sporting goods company I would like to strongly promote initiatives and raise such kinds of concepts and developments, along with the relevant committees of the Tokyo Metropolitan. I hope this will be a good and inspiring example to showcase to the other prefectures in Japan.
We can develop some powerful ideas and concepts together with the International Olympic Committee. For example, for the Olympics, we will provide volunteer clothing for 80,000 people and also for several international delegations including Japan. We are also about to start the design of various clothing with different materials for the Olympic athletes. The image and the branding of the clothing is a key factor, I think.
What is your final message to readers?
ASICS is all about constant improvement, so we are always analyzing our strengths and weaknesses. One of our key strengths consists of our dedication to provide products that genuinely improve consumers' performance and help them reach their goals. We see elevating our design to a cutting-edge, trend-setting level as a major opportunity going forward to further appeal to younger generations and influencers.
We are providing modern, technologically advanced, and the most innovative, most functional products to our customers, which provide them with smoother movement and better body and feet protection.
Our company ASICS currently has decided to grow further to compete with bigger global brands, as well as smaller brands and newcomers across the globe. While it is difficult for such a globalized company like ours to provide tailor-made individual satisfaction to each individual person, we do respect and value our customers’ tastes and we always endeavor to do our best.