The next big thing for corporate retailers

With a US$200 billion retail market being open to foreign direct investment, India is seeing a plethora of foreign brands entering the country. The Rs 2,000 crore footwear market in India seems to be attracting a lot many foreign brands, but what is probably a matter of worry is whether or not the Indian market is ready to accept them. A report by Zainab Morbiwala.

Nine West, Aldo, Bally, Charles & Keith, Salvatore Ferragamo, Hugo Boss, Clarks, Lloyds, Carlton London, and a dozen more – you name ‘em and we have ‘em right here in India. Five years ago, though, owning a foreign footwear brand meant a trip abroad, a gift from overseas friends/family, or at the most, an online purchase. It is only now that the retail revolution in India is attracting a lot many foreign footwear brands, with a majority of these high-end brands choosing to set up their own retail presence here. Nearly one-fourth of the total footwear sales in India happens through organised retail outlets, making this the second-most organised retail segment in the country, next only to organised timewear retail. And the credit for having set the ball rolling goes to players like Bata and Liberty.

Stepping in
Although fashion footwear has had a slow entry, the branded sports footwear market is perhaps the only retail sector in the country wherein all three top global brands have a presence. Reebok opened its first exclusive store in India in 1995, followed by Nike and Adidas. While the first exclusive brand outlets of foreign footwear brands took time to arrive, the grey market filled the fashion footwear void with low-priced offerings from the South Asian markets of Malaysia, Vietnam, Thailand and China.

One of the early entrants with their exclusive outlet was Nine West in 2002. Says Sandy Walker, vice president, marketing, Nine West International, “Since the launch, Nine West today operates four stores in India – at Linking Road (Khar), Atria Mall (Worli) and High Street Phoenix Mills in Mumbai, and at South Extension, New Delhi. Nine West customers are well travelled, fashion-aware and loyal to the brand. We now wish to tap additional consumers in India. Our initial strategy while setting up our first store was to tap the existing customer base of Nine West, before broadening the base with new customers. The aim at present is to create product awareness and build synergy with a global customer body.”

Sharing his views on whether the Indian market is currently ready for foreign brands, Walker says, “Yes, we are of the view that the market is open to the entry of international brands; and this has been proven by our continued presence for the last five years in the country. The organised retail sector in India is very small and, therefore, there is enough room for the growth of international as well as domestic players.”

Fashion footwear brand Bally entered India in 2004 and their retail presence so far has been restricted to Mumbai. The brand will now be available in New Delhi and a couple of more cities in a few years' time. Marco Franchini, CEO, Bally Group, relates the brand's experience in India : “ India is an incredibly important expanding market, so it is necessary for Bally to have its presence here. The Indian consumer is not completely unaware of Bally; international travellers – especially those visiting Britain – are already loyal customers. For the brand, this is an opportunity to provide the Indian consumer with products that have a classic elegance – tasteful luxury, enduring quality and beautiful craftsmanship have always been the hallmarks of Bally. The response here has been very positive.”

Targeting mid- to high-end customers, Aldo inaugurated its first store in India at Mumbai, in 2005. A year later the brand opened its second store. Says Angie Deliva, marketing manager, ALDO Group International, “ Through our market-gap analysis, we found out that no global footwear retailer offered international fashion at affordable prices for all categories and genders, with an add-on accessories collection.” “Looking at major international retailers striving to get a foothold in the country (with Tesco, Wal-Mart, Debenhams, etc.), we strongly believe that the Indian market is ready to accept international brands. India is already a major market for international brands in sports retailing and is now fast moving forward with fashion footwear, too.”

“Eventually, the large unorganised market will be consolidated and acquired by major national or international retailers. Retail space shortage along with cutthroat competition will become the key factors leading to the consolidation of local players.”

Talking about expansion plans, Deliva says, “It is clear through our two stores in Mumbai that our Indian customers love the brand. We are constantly asked about our next store launch in other cities. Keeping in mind the slow pace of getting it right in any retail environment, it is taking us a little longer to open stores in line with our strategy – we are looking at all major cities. Our plan is to open more than 30 stores within the next couple of years.”