Footwear retailing

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FOOTWEAR RETAILING IN INDIA FOOTWEAR RETAILING IN INDIA Prepared by Prepared by :- :- MMA (Semester – MMA (Semester – II) II) PRASENJIT CHAKRABORTY PRASENJIT CHAKRABORTY (Roll No. 40) Ranajit Paul Ranajit Paul (Roll No.42) ruchika dewan ruchika dewan (Roll No. 46) shatabdi sarkar shatabdi sarkar (Roll No. 47) titash rakshit roy titash rakshit roy (Roll No. 58)

Transcript of Footwear retailing

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FOOTWEAR RETAILING IN INDIAFOOTWEAR RETAILING IN INDIA

Prepared byPrepared by:-:- MMA (Semester – II)MMA (Semester – II)

PRASENJIT CHAKRABORTY PRASENJIT CHAKRABORTY (Roll No. 40) Ranajit PaulRanajit Paul (Roll No.42) ruchika dewanruchika dewan (Roll No. 46) shatabdi sarkarshatabdi sarkar (Roll No. 47) titash rakshit roytitash rakshit roy (Roll No. 58)

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Indian Footwear Retail Industry: AN OVERVIEWIndian Footwear Retail Industry: AN OVERVIEW

Footwear is a necessity to every person and at the same time is now a lifestyle as also a performance enhancement product; and is thus a segment with vast potential. The Indian footwear market is estimated to be worth Rs.13,750 Crore and constitutes just about one percent of Indian retail. About 37.8 percent of Footwear retail is in the organized segment, which qualifies it as the second most organized retail category in India, next only to Watches.

Men's footwear comprises the largest share of the organized market accounting for about 52 percent in value terms. As footwear retailing in India has remained focused on men’s shoes, there exists a whale of opportunity in the exclusive ladies and kid’s footwear segment. This is especially surprising as women globally in line with global trends are the key decision makers for buying footwear. The ladies footwear segment still remains the most untapped as nearly 80-90 percent purchases happen in the unorganized market largely due to the dressing habits of women for whom consideration of durability or comfort are less important than colours and designs that go with dress.

With the Indian woman becoming more brand-conscious as opposed to the past state of being product-conscious, more and more internationally renowned players are expected to enter the Indian market to fill this need-gap.

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History of Footwear RetailingHistory of Footwear Retailing:-:-

1. Emergence of Bata1. Emergence of Bata ((Bata India Ltd. Bata India Ltd. is the largest footwear Bata India Ltd. Bata India Ltd. is the largest footwear

retail chain in India. Bata India serves over 1 Lakh retail chain in India. Bata India serves over 1 Lakh customers per day and has more than 8000 employees customers per day and has more than 8000 employees on its rolls. The company operates 950 retail stores and on its rolls. The company operates 950 retail stores and runs 5 production facilities across Indiaruns 5 production facilities across India))

2. The Leather Industries in India2. The Leather Industries in India (Indian leather industry is the core strength of the (Indian leather industry is the core strength of the Indian footwear industry. It is the engine of growth for Indian footwear industry. It is the engine of growth for the entire Indian leather industry and India is the the entire Indian leather industry and India is the

second largest global producer of footwear after China.second largest global producer of footwear after China. ))

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3. Success Story of Khadim’s3. Success Story of Khadim’s

(Khadim's is the 2nd largest footwear retailer in India in (Khadim's is the 2nd largest footwear retailer in India in term of organized footwear retailing. It has more than term of organized footwear retailing. It has more than 625 exclusive retail outlets across the country. And by 625 exclusive retail outlets across the country. And by

far, the leading shoe retailer in the East.far, the leading shoe retailer in the East. ))

4. Emergence of Small Scale Industries4. Emergence of Small Scale Industries

((There are nearly 4000 units engaged in manufacturing There are nearly 4000 units engaged in manufacturing footwear in India. The industry is dominated by small footwear in India. The industry is dominated by small scale units with the total production of 55%. The total scale units with the total production of 55%. The total turnover of the footwear industry including leather and turnover of the footwear industry including leather and non-leather footwear is estimated at Rs.8500-9500 crore non-leather footwear is estimated at Rs.8500-9500 crore (Euro 551.3-1723.1 Million) including Rs.1200-1400 crore (Euro 551.3-1723.1 Million) including Rs.1200-1400 crore (Euro 217.6-253.9 Million) in the household segment.)(Euro 217.6-253.9 Million) in the household segment.)

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Marketing Mix in Footwear Retailing:-

1.Product Focus (Renowned brands like Nike, Adidas, Reebok

and Puma focus on Sport’s wear, while some niche brands like Gucci, Lee Cooper and Woodlands are renowned for luxury footwear's)

2. Pricing Model (Pricing is designed to be competitive to the

other fashion Shoe retailer. The pricing is based on the basis of premium segment as target customers. This can control costs and influence product pricing)

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Segment wise classification of price ranges in the men’s Footwear Segment :-

SEGMENTS PRICE RANGE (in Rs.)

% OF GROWTH

Mass Market 185 – 700 60% (Liberty, Bata)

Economy Market 700 – 1000 30% (Bata, Liberty)

Sports Market 1000 – 3000 7% (Nike, Adidas)

Premium Leathers

3000 – 5000 5% (Charles,Keith, Woodlands)

Luxury 10000 - 50000 1% (Gucci, Louis Vuitton)

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Segment wise classification of women footwear segment:

SEGMENTS PRICE RANGE (in Rs.)

% OF GROWTH

Traditional Wear 699 – 999 5%

Designer Wear 599 – 799 10 %

Formal Wear 299 – 699 40 %

Casual Wear 499 – 799 25 %

Sports Wear 599 – 799 20 %

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3. Place / Location (Successful brands are realizing that while malls offer

higher footfalls, the advantages of high street are many. Average Cost/sq ft would be almost 40% less than the Malls, and considering the overhead costs of parking, energy, etc high street is more suited for “youth” targeted products. It is also more suitable for players with wide product assortment.)

4. Promotion (Promotion is largely dependent on finding

accessible store locations. It also avails of targeted advertising in the newspaper and creating strategic alliances. The use of print and electronic media is essential as it is the

best way you can reach the mass in India. )

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Organised footwear market vs Unorganised footwear market

The average growth in the industry has been estimated at 12% and is estimated to touch Rs 47000 crore by 2025. Presently the Indian organised foot wear market is dominated by men’s footwear segment that contributes for nearly 60% of the market where the casual footwear has been better off with two thirds of the share in the men’s segment. The unorganised players have the lions share in the ladies and kids segment with 80 percent share. The organised footwear brands have less penetration in the ladies footwear segment mainly due to the complex buying behaviour of Indian women. The ladies and kids segment is one of the fastest growing segments in the branded footwear market and many foreign brands like Catwalk have ceased the opportunity and have set their footprints in this segment which has been untapped by major traditional Indian footwear brands.

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Business model

One learning from Carona’s fall has been the need to minimise risk and spread the risk with partners. Successful brands like M&B, S&M are pursuing a good mix strategy of few owned and franchise models to expand and serve markets. Own showrooms are used to identify the changing trends (M&B consistently targets the high end students in Delhi) and create successful product lines. Franchise option is vigorously pursued to expand the footprints and reduce the cost of Operations. S&M, has adopted a unique “Store-in-store” model using IT as a backbone to significantly reduce the cost of operations, almost 35%.

Enterprise-wide IT

Successful entrants S&M while pursuing innovative store-in-store policies have relied on IT investments such as POS and ERP. Companies such as Khadims, M&B are heavily relying on IT to understand the models of the seasons, price ranges, store performance, etc.

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India’s footwear retail Entry: Opportunities, Issues and Challenges.

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SWOT Analysis Indian Footwear Industry

STRENGTHS: -

• Existence of more than sufficient productive capacity in tanning. • Easy availability of low cost of labour. • Exposure to export markets. • Presence of qualified leather technologists in the field. • Comfortable availability of raw materials and other inputs. • Massive institutional support for technical services, designing,

manpower development and marketing. • Exporter-friendly government policies. • Well-established linkages with buyers in EU and USA.

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WEAKNESSES :-

1. Low level of modernisation and upgradation of technology, and

the integration of developed technology is very slow.

2. Low level of labour productivity due to inadequate formal training

unskilled labour.

3. Horizontal growth of tanneries. Less number of organised product

manufacturers.

4. Lack of modern finishing facilities for leather.

5. Highly unhygienic environment.

6. Unawareness of international standards by many players as

maximum number of leather industries are SMEs.

7. Delayed deliveries

8. Weak support infra- structure for exports

1.

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OPPURTUNITIES : -

• Abundant scope to supply finished leather to multinationals setting up shop in India.

• Growing fashion consciousness globally. • Use of information technology and decision support

software to help eliminate the length of the production cycle for different products

• Growing international and domestic markets. • Aim to present the customer with new designs,

infrastructure, country & company profiles.• Use of modern technology

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THREATS : -

• Entry of multinationals in domestic market. • Stiff competition from other countries.(The performance

of global competitors in leather and leather products indicates that there are at least 5 countries viz, China, Indonesia, Thailand, Vietnam and Brazil, which are more competitive than India.)

• Improving quality to adapt the stricter international standards.

• Fast changing fashion trends are difficult to adapt for the Indian leather industries.

• Limited scope for mobilising funds through private placements and public issues, as many businesses are family-owned.

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CASE STUDIES

• Bata India Ltd. & its HR issuesBata India Ltd. & its HR issues

• Khadim’s and its Customer Khadim’s and its Customer BaseBase

• RED TAPE: RED TAPE: A ‘Necleus’ BoonA ‘Necleus’ Boon

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Bata India Ltd. & its HR issues

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Khadim’s and its customer base

“Well provide prices of your choice”

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1. Selection: Matching available Human resources to job2. Appraisal: Performance Management3. Rewards: Reward short as well as long term achievements4. Development: Developing high quality employees

The human resource Cycle:-

Selection PerformancePerformanceManagement

Rewards

Development

A ‘Necleus’ BoonA ‘Necleus’ Boon

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The Conclusion

With organised retail on the rise and increase in the disposable income retailing certainly looks a promising option. Potential opportunity for value added products in the domestic leather market is high; opportunity to cater to the domestic market with a blend of traditional, western fashion can bring in huge market in the footwear segment in India.

Increasing forex impact and global competition implies that leather companies cannot sustain their growth from only exports front. The experience of companies like S&M, M&B underscores the fact that entering domestic market can de-risk the business and increase revenue growth. Success depends upon consistent strategy linking location, product range and execution. Success in domestic market requires listening to the customer, adapting the product and price, and managing the cost of operations. Scale is important to survive and grow, and low risk models such as franchise or store-in-store may prove be effective. In the final analysis success depends on each company’s willingness to take risks and implement required changes.

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BibliographyWikipedia

– http://investing.businessweek.com/research/stocks/private/snapshot.asp

– http://www.icmrindia.org/free%20resources/casestudies/bata-hr-problems1.htm

– http://www.browneandmohan.com/file3.pdf– http://footwearsinfoline.tripod.com/

ind_footwr_industry_overview.htm– http://smehorizon.sulekha.com/men-s-wear-dominate-

indian-footwear-retail-market_leather-viewsitem_5546– http://www.thecolorsofindia.com/interesting-facts/

business/largest-footwear-retail-chain-in-india.html– http://www.business-standard.com/india/news/tatas-

step-into-shoe-retail-plan-6-stores-by-next-month/412975/

– http://en.wikipedia.org/wiki/Red_tape– http://www.researchandmarkets.com/reports/594216/

indian_footwear_industry_analysis.pdf

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WITH SINCERE WITH SINCERE THANKS & REGARDS THANKS & REGARDS

TOTO

DEEPA MITRA MAMDEEPA MITRA MAM

(COORDINATOR)(COORDINATOR)

MMA, SEMESTER - IIMMA, SEMESTER - II

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THE THE ENDEND