Adidas' $1 shoes to be sold under Reebok brand in India

NEW DELHI: Reebok International is working to develop a "sustainable business model" as part of its German parent Adidas AG's plans to sell "one dollar shoes" in India. After conducting a pilot test for 5,000 pairs of shoes of an existing design of Reebok in three villages in Bangladesh last year, the firm is now planning to apply the learnings in India in the next stage, which it has termed as 'Phase III'. "The focus of Phase III is the development of the actual product and the development of a sustainable business model to ensure the program's long-term success," Reebok International spokesperson Daniel Sarro told media. During this phase, Reebok will be testing the technical feasibility of producing a durable, functional and affordable shoes-based on learnings from the Bangladesh market. When asked if the shoes would be priced at one dollar as envisaged by Adidas CEO Herbert Hainer, Sarro said: "The price of the product is unknown at this time. However, the goal of the project remains - to create an affordable product that meets the needs of the consumer." Having failed to get the desired result in its similar attempt in Bangladesh, the company is ensuring that in India they are taking the right steps to overcome the challenges. "Based on the staffing challenges learned in the previous phase (in Bangladesh), phase III is being conducted in India, where Reebok has a central headquarters and a range of staff that can dedicate the time needed to develop the product and test the business model," he said. In 2008, Hainer began discussions with Bangladeshi economist and founder of the Grameen Bank, Muhammad Yunus for developing, marketing and distributing a low cost footwear in Bangladesh in the form of a social business. Following the initial exploratory project, the Reebok Brand, based on its corporate responsibility focus, created a plan to move forward with the next phase of the project. "In the fall of 2010, Reebok proceeded with the second phase of the project, a pilot test of 5,000 pairs of an existing Reebok shoe in three villages in Bangladesh," Sarro said. However, there were a number of challenges that became evident during this phase of the project such as the lack of a permanent Reebok office or staff in Bangladesh to help with product and business model development, as well as import costs and taxes, he said.