How Under Armour Is Taking On Nike And Adidas In Asia, The New Battleground For Sports Apparel
One example of its Asian ambition can be found in Taiwan. At one of its two-story flagship shops in Taipei, a sign at the entrance encouraged customers to download its MapMyRun digital fitness app, part of its bid to build a global fitness community and better study customer behavior for more personalized products and pitches. (To entice shoppers to download the app, they are offered a discount for Under Armour's new Hovr running shoes.) Inside the store, “sportstyle”—its answer to the fashion-focused athleisure trend—can be found alongside more performance-oriented categories such as running and training.
To be sure, Under Armour UA -0.88% still has ways to go to catch up to its rivals. Nike and Adidas, for instance, have long penetrated the region and are among the major Western brands eager to have a larger hold on the market. In the streets of Taipei, they are among the major Western labels that can often be spotted instead of Under Armour. Labels like Lululemon that have benefited from the athleisure trend are also eager to capitalize on the growing market demand.
As a signal of its performance cred, throughout the Under Armour store, pictures of celebrity endorsers including NBA star Stephen Curry, golfer Jordan Spieth and actor Dwayne Johnson graced the walls while animated 3D images of Curry and others like ballet dancer Misty Copeland could be found near the kids’ and women’s sections. A wall displaying Curry’s signature shoes was another highlight.
The store is one of Under Armour’s about 60 selling locations in Taiwan, including full-priced retail stores, discount outlets and shop-within-shops inside department stores, according to the company’s local e-commerce website.
In total, Under Armour has about 700 mono-branded company-owned or partner-run retail locations in Asia, and the company plans to expand that to about 1,900 by 2023, it said in December at its investor conference. It said the region has an addressable $32 billion market targeting the “focused consumer.” But including consumers less serious about sports, it said the total sportswear market in the region totals $125 billion. In comparison, citing market research data, it described the North American athletic shoe and apparel market as $95 billion in size.
“We are generally just getting started in the (Asia Pacific) region,” Jason Archer, Under Armour’s managing director for the region, said in December. “Even with over 1,300 distribution points across APAC, we’re still a relatively new market entrant in most channels. … We’re really excited about the runway ahead in Asia Pacific.”
In Under Armour’s quarterly earnings reported last week, while revenue at its top North America market fell 6%, to $965 million, its overseas sales jumped 24%, to $395 million. European revenue was up 32% while the Asia region posted a 35% jump and would have surged 39% excluding currency impact.
In another sign of its international ambition, in July, Under Armour named new managing directors for its various international regions and said its Hong Kong office would be expanded to serve as its Asia headquarters.
Overseas represents about 28% of Under Armour’s revenue, in contrast to about three-fifths for the Nike brand, according to both companies' most recently released earnings.
“We believe actually that we have an advantage in that (Asia) region right now because we're smaller,” Patrik Frisk, Under Armour’s president and chief operating officer, said on its earnings call this month.
Except that its already better-known and bigger rivals in the region aren’t standing still, either.