What has been the response to Callaway in India?
I am very much encouraged with the response in the Indian market. Although the market in India is still small, it is growing rapidly and it has all the right signs for continued success. The participation of young and exciting talents, Indian players across the globe and their success, the development of the economy, the development of real estate, and rise of junior golf scene are all encouraging factors. The golf business in India is growing in double digits and so is Callaway’s business here. Our business here is very successful. We are very excited about it and are very much committed to it. The outlook is very positive.
Five years from now, where will India be in Callaway’s strategy?
I think India is probably going to be the fastest growing market for Callaway in the world, but from a very small base. And I think Callaway has an opportunity to contribute positively to that growth here in India, and over a long term build a very strong business. So India is a very long-term play for Callaway Golf, and one that we are very excited and passionate about. Of all the distributors and subsidiaries we have, India is the smallest at the moment. It is smallest by a significant magnitude. So, it has to grow and it will take time. But it has the potential to be one of the biggest markets for us.
India is a very important strategic market and that is the reason I am here. If it was not, then I have got more on my schedule than I can handle.
Which is your biggest market outside of the US?
Outside of the US, Japan is our biggest market, followed by Europe. Callaway was one of the first golf brands to go global. We are the second biggest golf brand in Japan. We are the only brand in this space which has a subsidiary in India, which reinforces our commitment to the Indian and the global market. China and Japan are markets which are considerably bigger than India in the golf equipment space.
During the 2008-10 period, Callaway was making huge losses.
It was struggling. The industry itself was seeing its ups and downs. The golf industry was in a significant decline, particularly in 2009 and 2010. I applaud my predecessors for proceeding with the investments in India even during that time. Callaway brand has always been a major player, but we also lost some market share and focus during that period. Fortunately, we have been able to flip that around and we have a lot momentum right now. But during the 2008-2011 phase, the company didn’t hit its goal.
How have you priced your products in India?
There is an import duty that we pay on our products in India which makes the cost of the product slightly higher as compared with the US market. But even then we try and make it competitive. We try to operate 10-15% above the US prices, considering that the import duty is more than 20%. But then we give end-to-end service to consumers. So we are actually taking a hit on the prices.
What is your market share in India?
We have more than 25% market share in the Indian golf market, which is pegged at around $11 million.
How tough is the competition from the other brands in India?
There are international brands present in the Indian market but not with their subsidiaries. They work through distributors. So there is not the same level of commitment and same level of investment and opportunities.