There is a popular story in the most popular Marketing text book for MBAs written by Philip Kotler.
A shoe company sent a salesman to Africa to sell shoes. He went there and saw no one wearing shoes and wires back “No one wears shoes here. No market”. A few years later, another salesman goes again. He looks around and sees the same thing and wires back “No one wears shoes here. Tremendous market. Send supplies immediately.”
Adidas seems to be the same thing now. They wanted to sell shoes for $1 in Bangladesh. But for the initial 5000 pairs, they incurred losses because the cost for making was $3 and import duty was $3.50.
Now Adidas is shooting to sell shoes in Indian rural areas for $1 each (Rs 52). Adidas CEO, Herbert Hainer, recently announced this. As per Hainer, the market will be:
The shoe will be sold in villages through a distribution network….We want the product to be self-funding.
India has become some kind of magnet for low priced products – first a less than $100 computer, then a $35 tablet.. and now a $1 brand name shoe! Maybe selling something for low price in India puts the selling company in the limelight!