At the recently re-launched Central at Ambience Mall, Vasant Kunj, Kishore Biyani, Chairman, Future Group, announced his company is planning to step up the group’s focus on men’s footwear retail. At Central, Hyderabad, the footwear section spans across 30,000 sq. ft. and even in Central, Vasant Kunj, footwear occupies a major space covering 15,000 sq. ft. Area.
According to Biyani, footwear today is no longer a category defined for just women. It’s equally important for men – almost as important as buying trousers.
“Men are equally inclined towards buying footwear and on an average have at least 20 pairs to go with different trousers. This is the reason why we are expecting footwear to contribute approximately 18 percent to the overall revenue, an increase from the current 11 percent,” he said.
He’s confident that the share of footwear will increase from Rs 1,600 to Rs 2,500 crores by next year and aims to be the number one footwear retailer in the country very soon.
The contribution of private labels to the group’s revenue is around 40 percent presently. With brands like Koovs, Lee Cooper, Clarks, and Converse under one roof, Future Group claims to be the number two footwear retailer in India. “We aim to be number one footwear retailer in India very soon,” he added. Earlier this year, well-known Indian denim brand Mufti expanded into the footwear category with a multi-fold strategy after an in-depth research highlighting the rising demand for trendy footwear for men. The company’s expansion into the footwear segment is a result of the company’s in-depth research highlighting the rising demand for trendy footwear in the casual segment for men.
According to Kamal Khushlani, Founder and Managing Director, Mufti, the current estimated size of Rs 34,400 crore, the footwear segment is expected to grow over Rs 55,400 crore in the coming five years.
“The expansion into the footwear segment is a part of our company’s vision of becoming a Rs 1,000 crore brand in the coming 3 years. Our footwear collection carries forward our brand ethos and our promise of bringing quality products that comprise of style in the markets. Our primary focus continues to be on delivering more value to the customer with our products as we begin to expand into newer categories.”
The brand offers good quality products at accessible prices in the casual and sports lifestyle’ segments. The collection ranges from Rs 3,299 to Rs 3,999 and is now available at exclusive brand outlets and select leading footwear stores across India. Mufti is now looking at beefing up the distribution of its footwear collection in 500+ locations comprising MBOs, stand-alone stores and existing network of retailers in the coming year.Another renowned knitwear brand which stepped into the men’s footwear category last year was Duke with the launch of Step Ahead, a premium lifestyle footwear collection for men.
“We plan to expand our product range by entering into the footwear segment. The expansion will create a centralised, multi-product engine for wholesale and retail distribution, supporting
Duke’s long-term business growth in India,” Kuntal Raj Jain, Director, Duke Fashions (India) Ltd., said at the launch.
Duke’s footwear range features a variety of sports, lifestyle and casual shoes including moccasins, high ankle shoes, sneakers and more.
The Indian Footwear Market India is globally the second largest footwear producer after China. In 2017, the global footwear market size was approximately US$ 246.07 billion.
Growing at a CAGR of 4.5 percent in the period 2017-2023, the market is projected to reach US $ 320.44 billion by the end of the forecast period.
India’s footwear production accounts for approximately 9 percent of the global annual production of 22 billion pairs as compared to China which produces over 60 percent. Key production centres in the country include Kanpur and Agra in Uttar Pradesh; Ranipet, Vaniyambadi and Ambur in Tamil Nadu. The sector is fragmented and close to 75 percent production comes from the unorganised sector including very small, small and medium enterprises.
Of the total footwear produced, ~90 percent are consumed within the country while the remaining ~10 percent are exported mainly to the European nations which include the United Kingdom (UK), Germany, Italy and France.
It has been constantly observed that the increase in disposable income and per capita income has revolutionised the Indian consumer’s buying and spending pattern towards apparel and footwear. A greater proportion of the overall Indian population, which includes Tier I & II cities as well as smaller towns, now have considerably higher spending power. As a result of this, footwear market is gaining mass momentum and expanding rapidly.
However, the Indian footwear market is dominated by unorganised players who account for almost 85 percent of the total market and give stiff competition to organised brands. Reasons for this unequal market distribution include advantages like lower sales tax and lower labour cost for unorganised sellers. However, as consumer preference and buying behaviour is changing, organised retail players are carving a definite niche for themselves in the market.
International Players Set Foot in India
The inclination of Indian consumers towards international brands has become pertinent. After liberalisation, as the economy opened up to the international market, imported goods gradually gained traction among Indian buyers. In recent years a huge number of international brands have gained a good and reliable position in the market – a lot of these being footwear brands.
Take for example the US casual footwear brand Crocs. Globally, Crocs sells 55 million pairs of footwear every year. For Crocs, India is one of the fastest growing markets for the company besides China, Japan, South Korea and Germany. “India will grow as one of the top-tier markets because we know the potential here is fantastic,” Carrie Teffner, CFO, Crocs had said to an Indian premier newspaper.
In India, Crocs sells its products through 90+ exclusive stores, hundreds of multi-brand stores and also through e-commerce platforms.
South and West India are the biggest markets for Crocs, mostly due to climatic conditions which favour the kind of footwear Crocs offer. “North India is picking up very fast too, now. Growth is happening faster in this region of the country,” said Deepak Chhabra, CEO, Crocs India.
Adidas AG, the German sportswear company that sells Adidas and Reebok brands in India recently opened bigger Adidas stores in the country to give consumers a better brand experience that is missing from its regular 1,000 sq.ft., stores.
According to Dave Thomas, Managing Director, Adidas India, a 1,000 sq.ft. store restricts the brand to tell its complete story since the brand cannot adequately display all categories thus limiting the capacity to showcase all the best products.
The company’s biggest store is in Chennai, which is spread across approximately 7,000 sq.ft. Adidas has four company-owned stores at the moment in the country and is hoping to take the number to 20 outlets by 2020. The company operates around 700 Adidas and Reebok stores in India as of now.
Keeping up with its commitment to provide a world class shopping experience, the country’s largest footwear brand and retailer, Bata India continued the launch of its international Red Angela stores in multiple cities across India. With almost 50 new international designs, Red Angela stores have already started to yield positive results by way of footfalls and delighted customers.
“We have built up a growth momentum in Q2 with portfolio refresh across categories, and we hope to continue it as we get into the peak festival season. Our strategy of using youth icons to push our key categories has yielded positive results. Continuing our commitment to provide a world-class shopping experience to our customers, we are expanding the footprint of our Red Angela stores, which are driving additional footfalls as well as improving brand saliency,” said Sandeep Kataria, CEO, Bata India.
Meanwhile, Woodland with its retail chain of over 600 company-owned stores is present in over 5,000 multi-brand outlets and is planning on adding another 60 stores in this financial year in an equivalent combination of small towns and metros. It is also working towards strengthening its franchise model to grow its presence in smaller cities and towns.
New Brands on the Block
A first in sports footwear in India, Kan D:FY footwear range are designed in Portland, the sneaker capital of the world. Co-owned by Excel Entertainment, the brand targets Indian fitness sensibilities making great sports footwear with great technology available from prices Rs 2,200 onwards.
After launching its first store in Mumbai, the brand is planning an aggressive physical presence with 22 stores across 9 cities in Mumbai, Bengaluru, Hyderabad, Chennai, Surat, Vadodara, Mohali, Bareily and Hubli, and aims to take the store count to 100 by 2022.
The inventors of the football stud, hummel, stepped into the Indian market in 2018. The brand, which has already been running a substantial part of its production from India, has now decided to sell its wares in the country as well.
Christian Stadil, Owner Thornico Group and hummel International said, “India is a broad prospect for us. We want to explore the diverse culture and ethos of the country. The progress of India as an economy excites us a lot. The GDP growth of India as compared to other markets is highly impressive. Most importantly, there is a huge potential for an alternate sports brand with a different offering than the existing mainstream sports brand.”
CEO Allan Vad Nielsen added, “India is one of the top most focus market for the brand, Hummel. We will create branded content and products for the Indian market because we are here to stay.”
Flipkart Fashion too also launched footwear and handbags brand, Cara Mia on its platform. Meant for women in the age group of 18 to 25 years, Cara Mia, features a wide range of over 100 unique styles of footwear and 75 unique styles of handbags. Cara Mia features two ranges – urban street style fashion and vintage affair.
Flipkart Fashion recognized a gap in the market between high-end luxury products and affordable products that offer both style and quality. The launch of Cara Mia is a step to address this need in the market.
On launching the new in-house label, Rishi Vasudev, Head of Fashion at Flipkart, said, “Fashion accessories is one of our fastest growing categories where we have witnessed a 100 percent Y-o-Y growth in branded portfolio. Accessories today have moved from being functionality to an expression of one’s personality and style. With the launch of Cara Mia, we aim to expand women’s fashion portfolio and also offer quality products at competitive price points.”
Stepping into the Future with Technology
With increasing Internet penetration and rising popularity of the e-commerce market, footwear manufacturers, having a presence over the e-commerce ecosystem, are using the Internet not only to drive sales but also to monitor consumer buying behaviour, and are accordingly offering a personalised experience to customers.
Through e-commerce platforms companies also provide fast and convenient functional experience to customers like easy payment option, grievance management, after sales service and competitive pricing. The Indian footwear market is segmented by end user-wise sales, and type-wise market segmentation in which casual footwear contributes chiefly to the total revenue.
The fashion market in India is growing exponentially and footwear and accessories are at par with the consumption of apparels. The rising demand of footwear in India has a lot to do with the changing lifestyles and an increase in the number of working professionals. With increasing demand in not just Tier I cities, but also in Tier II and III cities, the Indian footwear market is rapidly evolving and expected to grow at a higher rate in the future.
In the last five years, Indian footwear export has witnessed a growth of 20 per cent owing to growing demands in the European nations and also the trend of major importing countries to shift their focus from China to other producing countries. From a need-based industry, footwear is becoming fashion and style oriented. The footwear market indeed has a high potential for growth in India.