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.
India is the third largest footwear consuming country in the world after China and USA, but with very little separating the three, India is very soon expected to be the second largest consumer as well.
In absolute terms, footwear exports from India have risen from Rs. 71.5 billion in FY10 to Rs. 180.0 billion in FY15.
The growth in Indian fashion and lifestyle market has given an impetus to the footwear industry as well. From a basic need-based industry, it has become an evolving fashion and style category.
Market Size, Growth & Segmentation
As per the India Retail Report, India’s total retail market is worth Rs 3,893,425 crore, growing at 18 per cent and is expected to cross Rs 6,156,333 crore by 2017. Modern retail is estimated at 42 per cent of this total market and is expected to grow by 21-23 per cent Y-o-Y. Retail expansion grew at an average of 16-18 per cent in terms of number of outlets and retail space with same outlet growth being around 25 per cent.
The footwear market in India, like its international counterpart, has always been broadly classified into three segments, Men’s, Women’s and Kids. Men’s market is growing at a CAGR of 10 per cent. At present, men’s market contributes around 60 per cent of sales in the footwear segment as against women’s share of 30 per cent. The women’s segment, however, is growing at a much faster CAGR of 20 per cent.
Based on the usage, the market can be divided into two sub categories:
- Regular (consisting of daily and sports footwear, material can be leather/non-leather)
- Occasional (consisting of premium and luxury, material can be leather/non-leather)
From price point, the footwear industry in India can be divided into five parts:
- Mass (Rs 150-700)
- Mid/Economy (Rs 700-1000)
- Active Sports (Rs 1000-3000)
- Premium (Rs 3000-5000)
- Luxury (Above Rs 10,000) segment
The footwear market of the country is shared between organised and unorganised segment. The organised segment caters to about 1/3rd of the market while the remaining market is fetched by unorganised players.
The unorganised segment gains prominence in the Indian context due to its price-competitive products, which are more suitable and attractive to the price conscious Indian consumer. But with increased household income, shifting consumer behaviour from saving to spending, increasing brand consciousness amongst Indian consumers, influx of large number of global brands and penetration in tier – II and III cities by footwear companies, the organised retail in footwear market is rapidly evolving and expected to grow at a higher rate in the future.
The rural market of India is still largely untapped for footwear manufacturers. Companies are re-positioning themselves and launching specific products and price ranges to expand their presence and increase their consumer base in rural areas.
The Evolution of the Indian Footwear Market
President-South Asia, Bata, Rajeev Gopalakrishnan, analyses the evolution of footwear industry in his own way. He says, “As consumers’ exposure to multi-channels on TV, movies, content increased over years, their expectation from footwear have evolved. Buying shoes for special occasions started becoming a norm. Advent of digital technologies and penetration of smartphones brings instant awareness for Indian consumers about the latest global trends and makes them aspire for the latest. Footwear is not just for utility anymore; they are more of a fashion statement. This has increased the per capita consumption from 1.6 to 2.4 in last 5 years. The market is also likely to gain from the proliferation of the retail culture, which is expected to boost it at a CAGR of 11 per cent between 2015 and 2023. Since the global footwear market is highly fragmented, the focus now lies in diversifying the product portfolio through research and development to meet the changing customer needs.”
“The industry is at a very interesting crossroad. The demography and changing buying behaviour are triggering enhanced demand from the existing pie. Rising disposable incomes and new entrants into workforce, especially women are pushing the domestic demand on the upside. On the other hand, the pain points of the industry – tax component and incentives on investor allowance are being worked upon. The organised sector will tend to be big beneficiary of these trends,” says COO, INC. 5 Shoes Pvt. Ltd., Rajesh Kadam.
He further says, “India is witnessing a change in terms of its basic aspiration that has seen the buyer’s preference move to more of branded stuff. More international players will enter the market and they will offer a wide variety to the consumer. All these are way different when we started out when it was a basic need that this industry fulfilled.”
90 per cent of the footwear produce of India is still consumed by the domestic market and the rest is exported.
“Indian footwear industry is exploring ways to increase exports and the growth in export of footwear will depend on quality and cost competitiveness,” says MD Sreeleathers, Satyabrata Dey.
According to him, India is attracting various established fashion brands of the world as well as retailers who are re-orienting their focus on the domestic footwear market. This has led to a significant increase in the number of retail outlets nationwide.
Key Trends Shaping the Indian Footwear Market
- Casualization and the Growth of Sports Shoes: According to Rajeev Gopalakrishnan, “The surging demand for designer yet comfortable shoes among women and sportswear or athletic shoes among men, have been bolstering opportunities for footwear sales.”
It is true that, the choice of footwear, both for men and women in India is always dominated by the fashion of the season. However recently, comfort has been the determining factor for the consumers in buying footwear. Casualization has kicked in as a big trend and with that sales of sneakers, converse also have picked up, as these are preferred for everyday wear. In fact, heels over three inches, most favourite in women’s segment, have recorded a decline of 17 per cent since last September.
MD & CEO Metro Shoes, Farah Malik, says, “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.”
- Increased Trust in Branded Footwear: Though the market share of branded and non-branded footwear in the country is almost the same till date, but brand consciousness of the Indians is increasing substantially.
As Rajesh Kadam of INC. 5 says: “A certain segment of Indian consumers is definitely become brand conscious, and the rest of the market does have an aspiration to get there.”
Farah Malik adds, “A fast growing economy and a rising number of affluent consumers have pushed India into the league of most brand conscious countries globally. However most consumers prefer a price point ranging between Rs 999 – 4999 with regard to both national and international brands.”
- Growing Opportunities in the Women’s Segment: Women’s footwear constitutes only 30 per cent market share currently. But the growth rate of this segment is double than the men’s segment. Where the men’s footwear market has registered 10 per cent CAGR growth rate in the last fiscal, it is 20 per cent for women’s segment.
- Omni-channel Retailing: Retailers have started venturing into Omni-channel retailing and trying in-store marketing solutions such as beacons to enrich the shopping experience and trying to find out ways to bridge the gap between offline and digital channels. In addition to engage users on digital platform, and even influence their merchandising decisions, many retailers are using the platform not just to showcase products, but to actually sell them. The same goes for mobile. Companies won’t just use the small screen to ‘get in front’ of customers (i.e. through geo-fencing and mobile-enabled sites). In 2016, retailers have incorporated mobile into other parts of the customer journey, including order fulfilment, payments, and loyalty.
LEADING FOOTWEAR BRANDS IN INDIA
The First Wave: Indian Powerhouses
The great Indian footwear brands predate their glamorised apparel cousins by a substantial time margin. Indian powerhouses in general started operating in the country majorly since independence itself and the past decades have seen more and more brands being launched into the industry. A case in point is our most loved Bata that most Indians will disbelieve its Italian origins. It was one of the earliest entrants and remains the market leader of Indian footwear.
|Brand||Year of Establishment||Segment Presence||Product Portfolio||Retailing Format|
|1931||Mass/Economy/Active sports/Premium||Men’s, Women’s, Kid’s footwear with international brands such as Hush Puppies, Marie Claire, Scholls etc.||1,250 stores across 500 cities, wholesale division, dealer-distribution network, own website and other e-commerce portals|
|Metro||1947||Mass/Economy/Active sports/Premium||Men’s, Women’s, Kid’s footwear with international brands like Clarks, Steve Madden, Crocs etc.||310+ EBOs in 90 cities and online retailing through brand website and other e-commerce portals|
|Liberty||1954||Mass/Economy/Active sports/Premium||Men’s, Women’s, Kid’s footwear||400 EBOs & 6000 multi-brand outlets|
|INC. 5||1954||Economy/Premium||Women’s footwear||225 shop in shops and 32 stand-alone stores across the country|
|1956||Mass/Economy||Rubber, PU, PVC, EVA, canvas and leather footwear for men, women and kids||20 showrooms in Eastern part of the country, MBOs and distributors|
|Khadims||1965 (wholesale & distribution)
1993 (Retail journey)
|Mass/Economy/Active/ sports||Men’s, Women’s & Kid’s footwear||600 retail outlets in 21 states|
|Action||1975||Mass/Economy/Active/ sports||Men’s, Women’s, Kid’s footwear||Franchised EBOs, brand website, leading e-commerce portals|
|Paragon||1975||Mass/Economy||Rubber, PU, PVC, EVA and TPR footwear for men, women and kids||Distributed through 80 depots and 450+ distributers across India|
|Men’s, Women’s, Kid’s footwear||EBOs, franchised outlets, own website and e-commerce portals|
|Sreeleathers||1987 (in Kolkata)||Mass/Economy/Active||Men’s, Women’s, Kid’s footwear||6 EBO’s and dealer network|
|Catwalk||1990||Economy/Premium||Men’s & Women’s footwear||150 stores in 31 cities, partnered with retail chains like Pantaloons, Globus, Central, Hypercity, Mega Mart, Lifestyle, Reliance Footprint, Shoppers Stop etc.|
|Mochi||2000||Economy/Premium||Men’s, Women’s, Kid’s footwear||Footprints in more than 35 cities through 70 retail outlets|
Source: official website of the brands
The Second Wave: International Sportswear Giants
A significant shift post liberalisation was that lifestyles expanded to foster great value for the sports/active segment and for casualization as a whole. The technological prowess of global sportswear giants enabled them to functionally and fashionably appeal to a young India.
Today, these international giants dominate the sports footwear category. The market is held by Adidas, Nike, Puma, Lotto, Reebok, and we expect the newer entrants ASICS, Sketchers, Crocs, Salomon etc to begin posing challenges to the Big 5 soon. A highly notable home grown success story however is Woodland that is a top of mind name in the adventure and outdoor segment in India.
|Brand||Time of Launch||Retailing Format In India||Key Indian Partners|
|Reebok||1995||Franchise outlets, MBOs||Basic Clothing, CS Retail, Comfy Shoemakers, Emdee, Mayur Associates Retail (Sri Devi), Uttam Trading|
|Nike||1995||Franchise outlets, MBOs||Mystore, RJ, SSIPL Group, Saffron Group etc|
|Adidas||1996||Franchise outlets, MBOs||Adi Sports, Comfy Shoemakers, Goodwill Enterprises, Mayank, Swaranbhadra etc|
|Salomon||2002||MBO||A&S Creations, Hindustan Army Store, Planet Sports and Central Stores|
|Puma||2006||Franchise outlets, MBOs||Bhawar, Ethix, Kapsons, Samarth, Shreyas|
|Lotto||2007||Stand alone stores and 200+ MBOs||Sports Lifestyle Pvt. Ltd.|
|Crocs||2007||Through Metro Shoes and EBOs||Metro Shoes|
|Paul & Shark||2009||EBO, Palladium, Emporio, Mumbai Airport, Hyderabad Taj Krishna Hotel||50:50 JV with Reliance Retail|
|ASICS||2010||Through MBO only till beginning of 2015, started opening franchised stores since then||Reliance Retail/Footprint|
|Sketchers||2012||Mono Brand Retail through JV||Future Retail|
|Airwalk||2012||Through MBOs only||Reliance Footprint|
Source: IMAGES F&R Research, indiaretailin.com, official website of the brands
Emergence of an Infant High End & Luxury Footwear Market
Though compared to the other footwear segments in India, the premium and luxury segment is very small and in terms of sales it amounts only approx Rs 450 crore as per ASSOCHAM data, but this has not prevented many international players from making an India entry. In fact their entry has hugely helped in raising the aspiration level of the consumers really high.
Many major international brands in premium and luxury segments like Aldo, Charles & Keith, Pavers England, Hush Puppies, Clarks, Steve Madden, Tod, Bally, Ralph Lauren, Ermenegildo Zegna, Burberry, Chanel, Gucci, Salvatore Ferragamo, Bottega Veneta, Armani, Versace, Hugo Boss, Dolce and Gabbana, McQueen and YSL (available through TSG’s Kitsch), Kenneth Cole all are available in India either through exclusive stores or through MBOs.
Top luxury footwear brands in the world, Louis Vuitton and Jimmy Choo have opened their exclusive stores in India. Very recently French luxury brand Longchamp has also forayed in India and opened its first store at DLF Emporio. The brand even has a plan to open 3-4 more stores in the country in coming few years.
Major MBOs in Footwear Industry
Curation of footwear for consumers is still greatly valued in India. Multi brand retail in footwear not just remains popular but is growing in strength day by day. Apart from own in-house brands, almost all the popular brands are visible at leading MBOs as well as in the major departmental stores today.
Reliance Footprint is perhaps the biggest player in this category. It has 225 stores across 24 states and has brands like Buckaroo, Franco Leone, Ganuchi, Hush Puppies, ID, Lee Cooper, Mancini, Pavers England, Moss Dunes, Provogue, Red Tape, Samsonite, Woodland, Catwalk, Custini, Hi Attitude, Inc 5, Luciano, Jove, Orange, Bonjour, Enroute, Piccadilly, Rocia, Tosca, towlips, Viviana, Hi Attitude, Levis, Lilliput, Mardi Gras, Spiderman, Adidas, Admiral, Fila, Lotto, Monza, Nike, Puma, Reebok, Scholl, Catwalk, Tresmode, Cocoon, Franco Leone, Gas, Louis Philippe, Roush, Alberto Torresi, Valentino, Sketchers, Airwalk, Barbie etc in its kitty. Pantaloons, Shoppers Stop and Lifestyle are some other important MBOs dealing with footwear.
India is often referred to as the sleeping giant in footwear terms. With changing lifestyles and increasing affluence, domestic demand for footwear is projected to grow at a faster rate than has been seen. India is witnessing buyer’s preference towards branded stuff. More international players will also enter the market and they will offer a wide variety to the consumer. All these are indications that Indian footwear industry might exhaust its full potential and grow exponentially.