Callaway bets on India’s growing middle class

A common Callaway merchandise display in India.

The mainstream golf industry is still in its infancy in India. But recent moves by Callaway Golf Co. show that the global equipment maker plans to be there for the long haul.

In January, the Carlsbad, Calif.-based manufacturer formed Callaway Golf India to tap the country’s growing middle class. It began operations just selling hard goods. Now, Callaway is introducing its full range of accessories and apparel into the market.

Its target consumer isn’t just limited to golfers. Callaway has greater ambitions of courting anyone who aspires to be associated with the sport.

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Vivek Mehta, general manager for Callaway Golf India, and Jeev Milkha Singh, Callaway brand ambassador and PGA Tour professional.

Even though participation is expected to grow 20-25 percent annually, there are only about 200,000 active golfers countrywide. Which explains why Callaway plans to attract consumers who haven’t even picked up a club yet.

“With golf in India being an aspirational sport, many people across the country continue to express interest in picking up the sport,” said Vivek Mehta, country head and general manager for Callaway Golf India.

Lifestyle – eyewear, clothing and watches, for example – is a key market for Callaway, especially in a country where consumers may not be playing golf but still want to identify with Indian icons like Jeev Milkha Singh, who is a Callaway brand ambassador.

“Offering our lifestyle products to the Indian consumer makes it possible to make our brand available both on and off the course,” Mehta said.

Callaway launched eyewear products in September; watches are coming later this month; and apparel is scheduled for November.

Currently, the company sells equipment and other merchandise at about 50 golf and sporting good stores countrywide. Exclusive shops in department stores may open next year. Mehta said Callaway will soon market products on TV shopping channels, too.

But there clearly are hurdles to growing business in India’s retail environment.

“India is in a transitional stage,” Mehta said. “Limitations at retail have created challenges such as the limited merchandising space and a lack of syndicated data, which is available in other markets.”

Meanwhile, Mehta’s team is working with partners to gain better market traction. For example, to enhance brand recognition, Callaway is strengthening ties with established golf entities such as the Arnold Palmer-designed DLF Golf and Country Club, a popular pro tournament venue.

There are fundamental issues, primarily lack of access to practice facilities and golf courses, that also will temper Callaway’s growth. Currently, there are only about 200 courses in the country. But that’s slowly changing as India’s fledgling golf market tries to meet new demand. Approximately 25 course and academy projects are in development.

“We see great potential in the Indian market,” said George Fellows, Callaway Golf president and CEO, in January. “We feel the IOC’s recent decision to reinstate golf as an Olympic sport and the growing number of international players, including Jeev Milkha Singh, among the upper echelons of the world golf rankings indicate a global golf marketplace poised for growth.”

Mehta acknowledges that Indian sales are still insignificant for the billion-dollar company. But he said the potential of international sales, in general, can’t be ignored.

Sales abroad already exceed 50 percent of Callaway’s business. The company predicts international sales ultimately will account for 60 percent of total sales. Callaway also operates ‘wholly owned subsidiaries in Europe, Japan, Korea, Australia and China.

TaylorMade is the sales leader in India, but Mehta is pleased with Callaway’s progress.

“We are aiming to be a dominant player in the industry in the next couple of years,” he said, “by investing in building the brand and bringing new golfers in the game through various strategic partnerships and initiatives throughout India.”

Adam Schupak contributed to this report.

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