Fashion is one of the biggest categories in retail. The organised footwear retail market in India was estimated at US$ 1.7 billion in 2011 and is expected to grow to US$ 3.8 billion by 2016. The industry is growing at a CAGR of 17.5 per cent owing to its huge demand in the country across categories. This clearly states the potential this industry holds.
Retail of shoes is one aspect of it while its production is another. For a layman, Agra is the footwear hub for footwear. However, if we dig in, Agra is not the only place that caters to all the demand for footwear in India. Within India, there are other locations also like Delhi, Kanpur, etc where certain manufacturers and suppliers have set up their bases to be in a better position to present their offering to brands. Moving beyond India, the most loved countries for sourcing footwear are Malaysia, China and Thailand.
Brands are sourcing not just complete shoes but also the leather, soles, laces and machinery that is required to put together a shoe. This clearly states the opportunity that it signifies the immense avenues for growth for suppliers and manufacturers in the field. G Plus is the manufacturer for US Polo, Arrow, Flying Machine, Miss Sixty, Montenapo and also has an in house brand, Enroute. Prerna Nigam, Brand Manager, G Plus confirming the same says, “We manufacture for leading brands in India and also in the process have launched our own private label, Enroute to cater to the burgeoning demand for quality footwear.”
Online footwear is one of the most selling categories. However, there is a difference in retail of footwear online and from brick and mortar stores. You can always find discounts and offers on certain multi brand portals which you may not find at the stores offline. How is this possible? Online retailers make purchases at a 35-40 per cent discount on the original price of the product which enables them to offer a little leverage to their customers in terms of the ticket price. There are more than 38,000 listings of shoes & accessories on eBay India and a piece of footwear sells every 33 minutes.
Zovi offers its own line of footwear and works with Indian manufacturers only. Sartaj Singh Mehra, Founder Member & VP of Product & Production, Zovi.com tells, “We source from Agra, Delhi and Kanpur at present and focus more on different styles and not quantities. All the designing and styling is done in house.” With respect to the discounts, it puts those items on sale which have already done its life and are very much in vogue.
However when we talk of pricing, talking of the scenario, Mukesh Sawlani, Director, And Designs India Ltd says, “Online products will be priced around two per cent more than the offline store products, as they are specially packed and delivery charges embarked.” Global Desi creates in-house designs and gets them manufactured by local vendors they have been associated with. Mehra tells, “The ticket price of products is lesser online as the retail cost involved in brick and mortar stores is way higher than running an e portal. This gives way to offering a competitive price.”
Myntra only sells branded footwear and sources directly from the brands and not from the manufacturers. Highlighting their business aspect, Ashutosh Lawania, Co-founder and Head of Sales, Myntra.com tells, “Our margins range from 35-40 per cent and the demand determines the number of pairs we wish to order. While Myntra works with both India as well as international labels, Rock.in offers only international brands. They are the exclusive licensees for La Redoute and House of Dereon in India. Aashish Puri. Co-founder and COO at Rock.in. says,“We work with European brands and source from US, China and Europe with the bulk being sourced from Europe. When we talk of pricing and offers, it is in line with the company’s pricing and strategies as they are in Europe.”
China: the lowest price hub
For footwear brands, there are some key markets which are the most favoured for sourcing. China leads the game with being the leader in offering quality products at the lowest prices. Retailers both online and offline, look at associating with manufacturers from China to create a line for them.
At the Expo Riva Schuh India, the international shoes and leather accessories market, we came across several such deals being formalised. Buying teams and representatives from renowned brands Bata, Reliance, Jabong and many more could be spotted to rope in manufacturers who will create their upcoming range of footwear.
Also manufacturers identify India as the most potential markets for doing volume business which will greatly add to their revenues. Their list doesn’t just target the retailers, some are solely looking at wholesalers to associate with as they feel they can do a bigger volume business with them.
Nat’s, a leading player and retailer from Kuala Lumpur, are moving on the same lines. Michelle Kok, Export Manager, Nat’s says, “Wholesalers are the one we wish to partner with rather than the retailers. We want to only carry out business with greater numbers and wholesalers can facilitate that for us.”
While some want to partner with wholesalers, some look at signing deals with retailers and the third category wishes to cash in on both these avenues.
Licensing: added feather
Licensing, which is a big industry overseas is also growing in India. Characters are gaining immense popularity across product categories and footwear also ranks as one of them. We already have many licensed characters of footwear present in India and the frequency and number of characters is growing. Disney characters, Hello Kitty, Mickey and friends, Dora are some which are already present in the space. “We are the international licensee for Angry Birds and Spiderman footwear but still have’nt been able to begin operations. We are looking forward to finding the right kind of people to partner with in India to extend these ranges here”, says Stone Zi, Area manager, Cortina China.
Moving ahead, it is needless to say that the industry will soar to greater heights. There are enormous opportunities to be tapped and cash in on. Sourcing will in the times to come increase from China and India will follow close after.