FOOTWEAR

Agenda

 Global scenario
 Indian market scenario
 Segmentation and consumer
behaviour
 Major brands
 Market trends
Global Scenario
Global Scenario
 The global footwear market grew by
3.8% in 2005 to reach a value of
$159.6 billion.
 Expected value by the end of 2010 is
$194.3 billion.
 The most profitable regional footwear
market is America.
 The global footwear market grew by
5.4% in 2005 to reach a volume of 10
billion pairs.
Competitive Landscape

 Leading companies include Nike,

Adidas‑Salomon, Reebok and Asics
 Extensive revenues within the Asia
Pacific region
 High research and development
 Overcome cost increases by decreasing
prices of products from suppliers
 Maintain margins through developing
volume sales
 Consolidation along the supply chain
adding to the effect of maturity
Indian Market Scenario
Indian Footwear Market
Liberalization of Indian economy led to increase in the buying capacity of the
country’s middle class.

Market Value
The Indian footwear market grew by 8.2% in 2004 to reach a value of $2.4
billion.
Market Value Forecast
In 2009, the market is forecast to have a value of $3.2 billion, an increase of
31.5% since 2004.

Market Volume
The market grew by 8% in 2004 to reach a volume of 1.8 billion pairs.

Market Volume Forecast

In 2009, the market is forecast to have a volume of 2.3 billion pairs, an
increase of 29% since 2004.
Market Characteristics
 Over INR 10,000 crore in value terms
 Brand-driven market
 Organized retail dominates sales
 Market size approximately 10 crore
pairs p.a.
 India is the second largest footwear
manufacturer in the world
 Nearly 58% of the industry
concentrated in cottage industry
sectors
 Segmentation
and
Consumer Behaviour
 Consumers Insights
Factors which can help in enhancing the sales

 Price
 Durability
 Variety
 Looks
 Multiple pairs
 Brand name
 Buying experience
Segmentation

 According to price
• Super premium segment
• Premium segment
• Middle segment
• Lower segment
 According to usage
• Sports shoes
• Party wear
• Professional
• Casual
Consumer Behaviour
If we segment the market according to the price
 Super premium segment
• Brand conscious
• Money is secondary
• Demands more variety
• Examples – Gucci, Red Tape, etc.
 Premium segment
• Quality conscious
• Have an upper limit to the money
• Try to get lowest price possible for high quality brand
• Examples – Bata, Reebok, Nike, etc.
Consumer Behaviour
If we segment the market according to the price
 Middle segment
• Do not care much about brands
• More concerned about looks and comfort
• Price one of the main factors.
• Examples: Bata, Liberty, etc.

 Lower segment
• Do not care about brands at all
• Size of this particular segment very high in India
• Much more concerned about the functionality and
durability
• Try to get lowest price possible
• Examples: Khadim, Shree leathers, etc.
Consumer Behaviour
If we segment the market according to the usage

 Sports wear
• Brand conscious
• Money is secondary
• More choosy
• Loyal customers
• Examples: Addidas, Reebok, Nike, etc.
 Party wear
• Main concentration on the looks
• Comfort is considered but is a secondary
thing
• Demand of high variety
• Examples: Gucci, etc.
Consumer Behaviour
If we segment the market according to the usage

 Professional wear
• Brand conscious
• Lesser variety
• Importance to durability and comfort
• Loyal customers
• Examples – Bata, Liberty, etc.
 Casual wear
• Comfort is of utmost importance
• Longevity is one of the important factors
• Value for money
• Lot of untapped market
• Examples: Bata, Liberty, etc.
Major Brands
Bata India Ltd
 Incorporated in 1931
 Subsidiary of the Bata Shoe Organisation
 India’s largest footwear company, selling 60 million
pairs of shoes annually
 Dogged by labour problems, overstaffing and subsequent
losses
 Though recognized as a household name in India, Bata
suffered greatly after the liberalization.
 Repositioned itself as a market-driven, fashion-conscious
lifestyle brand with an emphasis on service and
production.
Bata India Ltd
 Introduced Flagship, City, Family and Bazaar
stores that cater to different segments of the
market
 Over 1,100 retail stores
 The retail outlets also sell accessories, like
shoes laces, socks, and shoe polish.
 Capitalise on its vast retail network
 Trying to generate volume business in un-
represented and under-represented footwear
markets
 Consistently trying to leverage on its
established brands, while creating a niche for
its new brands.
Liberty Shoes Ltd.
 Existed since the 1950s and until 1983,
Liberty was entirely export-oriented
 Liberty is the second largest shoe
company in the country
 Re-positioned as a mid-price brand in
2004
 Contemporary brand in Indian footwear
via new advertising
 350 exclusive showrooms
 Children’s shoes bring in the largest
volumes for Liberty
 Woodland
 Launched in 1992
 Carved a niche as a “Rugged high‑quality premium casual
shoe”
 Presented itself as an outdoor/trekking shoe
 Called as SUV of Indian shoes for its ruggedness and all-
terrain use
 Ads showing people wearing Woodland shoes for various
outdoor activities
 Became status symbol during the 1990s due to excellence
in quality and styling
 Pioneered suede and nubuck leather shoes in India
Reebok India
 Entered India in 1995
 Sports and fitness brand targeted young adult
mainly
 45% of its turnover comes from footwear
 Accounts for 47% of the premium sports shoe
market in India
 Initially targeted at the male consumer
 Large market for female consumer who lives
an active lifestyle
 Reebok modified the format of all its stores to
introduce a women's collection
 Reebok-certified instructors
 In 2004, opened women’s-only stores
 Reebok "Gang up for rewards" promotion
Reebok India
 Cricketers as its brand ambassadors
 Cricketers as fitness icons since
India does not have a fitness culture
 Relies heavily on sports promotions
as a marketing strategy
 Developed a fitness culture
 “Wear the Vector. Outperform”
 The integrated marketing campaign
Market Trends
Unbranded vs Branded
 India still a huge market for
unbranded footwear
 Difficult for brands to enter entry
level segment
 Difficult to raise prices
 Branded still an urban phenomena
 Looks score above brand names in
middle and lower segment
 High-quality shoes - big market for
export
Retail Growth

 Foreign brands launched new designs in

2003
 Foreign brands focus on lifestyle aspect
 Domestic players began advertising
 Improvement in operations and retail
strategies
 This excitement led to urban middle –
class moving to branded retail formats
Casual, Younger Styles

 Increased media exposure and

global travel
 Footwear a lifestyle accessory, a
means of differentiation
 Men also care more about apparel
and accessory
 Style also a factor rather than just
comfort
 Women’s and Kids’
Segment
 Opportunity for retail chains in these categories
 Ladies constitute 40% of market though 80-90% of these
sales are through unorganized sector
 Indian women changing from product conscious to brand
conscious
 Kids’ segment also expected to grow due to young
population
 Indulgent parents also a factor
 Leased space and franchizing popular modes
Sportswear
 Presence of big players
 Playful promotion campaigns, world class merchandising,
stylish décor in stores
 Promote clothing alongwith sportswear
 Banking on middle class and improving lifestyle attitudes
 Indian players also becoming more contemporary
Value Retailing

 Factory discount stores – huge in number

 Category killers arriving on the scene
 Shopping malls will drive growth in this segment
Competition from Non-Specialist
Retailers
 Face challenge from apparel retailers diversifying into
footwear
 Hyper marts and retailers - another challenger
 Will have to focus on constant improvement, need to
differentiate
Innovative Locations and Distribution
Strategies
 Future possibilities could be health spas, health clubs,
airports
 Exclusive and multi-brand stores both present
 Multi-brand – possible entry point for foreign players
 Cross-promotions benefit all
Market Value Forecast
 In 2010, the global footwear market is forecast to have a
value of $194.3 billion, an increase of 21.8% since 2005.
 The compound annual growth rate of the market in the
period 2005-2010 is predicted to be 4%.
Market Volume Forecast

 In 2010, the global footwear market is forecast to have a

volume of 13.2 billion pairs, an increase of 31.5% since
2005.
 The compound annual growth rate of the market volume
in the period 2005-2010 is predicted to be 5.6%.
Questions?