India is the second largest footwear producer in the world, with footwear production accounting for approximately 9 per cent of the global annual production – 22 billion pairs as compared to China, which produces over 60 per cent of the global production.
India annually produces 2.1 billion pairs of which 90 per cent are consumed internally while remaining are exported primarily to European nations which include United Kingdom, Germany, USA, Italy and France, as per market analysts.
Footwear exports from India have grown at a CAGR of 20 per cent in Indian Rupee terms during the last five year backed by growing demand from European nations and increasing focus of main importing countries to shift sourcing from China to other low cost producing countries.
Brands like Metro Shoes have already established themselves as successful players in the field.
In an exclusive interview, MD & CEO, Metro Shoes, Farah Malik talks about the competitive industry and how Metro Shoes is planning to combat the threat from international players…
Tell us about the present scenario as a veteran of the footwear industry in India.
India is the second largest global producer of footwear after China, accounting for 13 per cent of the global footwear production, according to information shared by Leather India in the year 2015. India is now at the threshold of a retail revolution and witnessing rapid changes in the scenario which show promising growth in the coming years.
The entry of several international players has also resulted in providing a significant boost to the footwear market and the demand for Indian footwear will continue to grow in future as well. According to a new market report published by Transparency Market Research, the Indian Footwear Market is expected to reach US$ 258.22 billion and 12.11 billion units, respectively by 2023. It’s exciting times in India as we are also on the cusp of a retail revolution with Omnichannel opening up newer opportunities.
Give us a brief understanding of the journey of the brand.
The journey of Metro Shoes dates back to 1947, with the launch of our flagship store. With a focused approach to expanding and building the brand, Metro has emerged as a leader in fashion footwear retailing over the years. Today, we have 310+ stores with presence in over 90 cities across India. In the last 10 years, we have achieved excellent growth as a result of our focused efforts on expansion, customer insights and strategic use of technology. The company has registered a CAGR of 24 per cent in the last five years alone.
We currently function on a company-owned model and have not forayed into a franchising model yet. We also operate EBOs for Crocs. We plan to open 75 new stores in different formats across India in the current financial year and are also looking forward to clock Rs 1,060 crore revenue this fiscal, up from Rs 917crore last year. Also our e-commerce site, www.metroshoes.net is growing 200-250 per cent on a year-on-year basis.
Tell us about your USP, your target audience and the market share that you have.
Our USP lies in cutting edge designs and durability. We are a family brand, catering to a TG encompassing all age groups. We cater to all age-groups from children to adults alike. The sheer variety (we add almost 40 new designs every week) to the entire shopping experience makes it a brand to reckon with. It also offers the best and ever changing range to today’s fast fashion customer.
EBO or MBO’s, which one is the brand’s favourite in terms of strengthening its foothold?
Currently, market trends are unable to predict the strength of any particular platform per say given the constant flux the industry is in, vis-à-vis, changing trends and lifestyle choices. We at Metro Shoes rely predominantly on our own range but enhance the same by curating complementary brands to give the customer the best choice possible.
Metro Shoes is present online with an exclusive portal along with other channel partners as well. Does India prefer to buy shoes online? If yes, what is the ratio of online and physical retail sales.
With increasing Internet penetration and the growing acceptability of e-commerce, the shopping behaviour of Indian consumers is changing. In terms of preference, I do not believe the consumer will ever choose either online or offline exclusively. The Indian consumer has always sought for value, either in price or the perceived value of a product. They will choose the appropriate channel based on their need and the product offering. We are seeing good growth both through our online and offline channels.
What are the major trends in Indian footwear market now and how far are those different from the time you have started?
In the past, comfort was the most important factor during the selection of footwear. However, with the increased penetration of Internet and exposure to global fashion trends, consumption and lifestyle patterns of the Indian demographics underwent a sea of changes. Footwear is now essential fashion accessory. This era of fast fashion has seen consumers eager for new brands and shows quick adoption of international trends. Men have become far more experimental and are open to wearing loud prints with casual wear but stay subtle and classic in formal wear.
What are the most popular categories of your brand?
The last year saw an upsurge in the casual category for men and in men’s wear saw an increased acceptance of brighter colours and quirkier patterns. We have also seen a spurt in kids wear and that range is also being well accepted by customers across India. The premium formal wear in the women’s category.
Are Indians brand-conscious in case of buying footwear? What price point is the most favourite of the consumers?
A fast growing economy and a rising number of affluent consumers have pushed India into the league of most brand conscious countries globally. Indian consumers are largely brand conscious. They are accustomed to a high level of service both during and after sales. Hence, they rely on brand promises. However, with the rise of options online and with the youth seeking fast fashion there is still a thriving unorganized sector in this category.
Most consumers prefer a price point ranging between Rs 999 – Rs 4,999 with regard to both national and international brands.
Is the entry of international players being seen as a threat?
Entry of international market players increases healthy competition and encourages pre-existing brands to excel further. We aim to be a one-stop-solution for all fashion footwear needs under one roof through our multi-branded stores. With a strong base in innovation, business acumen and retail intelligence, Metro Shoes offers services for brands to enter/expand and manage retail operations through our existing and ever-growing channels. We are already aligned with Crocs and Steve Madden on these lines and look at providing a complete solution to any international footwear brand entering India.
Plans for the future?
Metro Shoes in the last year has consciously grown both vertically and horizontally. While we are a brand for all footwear solutions, we also are now partnering with brands for their distribution, expansion and launches in India like Crocs for example. Value Format Stores MSL (More shoes for less) will also continue to be a focus in the coming years.
We have recently launched a concept store in Gurugram and are very excited and anxious about how the consumers will respond to this. The adoption of technology to provide an enhanced retail experience to our consumers is also an area of focus both online and offline. Besides this, we also want to strengthen our hold in the Tier II and Tier III markets, which will require sustainable yet aggressive expansion plans. We do want to continue investing in data, technology and people who are the pillars for our business!