Skechers, the leading international sports and lifestyle footwear brands is bracing for wider presence with 100-125 stores in India in three to four years while aiming to be among the top three brands. Unveiling the future strategies David Weinberg, Chief Financial Officer, Chief Operating Officer, Executive Vice President, Director of Skechers USA, Inc spoke to Indianretailer.
How Skechers is optimistic of inexpensive and not much sportsaholic Indian market?
We are very optimistic of Indian market as our brand is performing well in retail which is a great sign. Our retailers and partners are happy with and definitely we are looking for growth. India is a mega market place for inexpensive footwear for sandals and things like that and that’s what brings us to the marketplace. The marketplace is where we are in the same place with other leading brands.
Brands like Nike is doing $120- $150 million business in India, they are growing significantly, have a great presence and that’s where the middle class consumer does watch sport. Though the large middle class consumers aren’t into athletics but they think of styles, the ones that wear rings, watches, footwear for comfort and exercises. This is the trend growing in India and that’s where we are after. We don’t want to be the in the sort of Indian marketplace where mass consumer wants very inexpensive footwear to wear around.
What are your plans of expansion in India?
We will continue to expand in India. Along with EBOs we will continue to expand through MBOs and franchisees and this is what we do everywhere in the world. Presently we have 35 stores of Skechers and probably in the next three or four years the count will grow to 100 to 125 depending upon the number of franchisees partners will join us. Simultaneously we are selling through 700 MBO and planning to increase the count significantly. These stores will be spread across metros to tier IV cities in the country. In the beginning stage in India we want to be open and flexible. Overall we are present in 40 cities across India.
The average area of stores varies from 1000 sqft to 1200 sqft and ultimately as we will bring our more products and the brand get accepted we will probably double the size of the stores. Around the world we have 1000 sqft to 30,000 sqft of stores. We want to expand across south, west, east, north region of the country.
After expanding our capacity in the metros we will move to tier I to IV cities. We start in the bigger cities first and that’s how we started in China as well.
What is the investment per store?
The investment depends upon the country and the region. We certainly have not kept minimum standards for the investment per store in India. Whatever is requirement for the investment we are willing to do so as long as the brand is getting the acceptance.
Have you finalized the franchisee partners?
No we haven’t yet. We are going to look at. We have to establish the model first and we have to establish the profitability and acceptance before selecting the franchisee partners to jump on board.
What are your plans of online expansion?
Right now we are trying to be very careful about Indian online marketplaces because they are very price competitive and we don’t want our price to be with competitive nature online. We are only available on Amazon.in. In a year we will be launching our own e-commerce portal to sell our products online.
What are your marketing and promotion strategies?
We do whatever we can. We are promoting the brand through online, social media and print media marketing, campaigning through TVC and big promotions in store. Also we have built a big international presence in markets like European and Pacific Rim where people travels. There they can see the brand and bring that brand back with them as well.
At the product side will you be more focusing on performance based or athletic footwear in India?
It’s not only performance based we will be promoting athletic footwear as well. We have very broad based product categories those all athletic inspired with various price points. Kid’s to mature age group is our TG. Historically women’s segment acquires large chunk of our sale. Also we have very good presence in men’s and kids segment and we anticipate continuing it here. We have probably the biggest demographics of the most international brands
How Indian consumer is evolving to the international styles of footwear?
Indian consumers are evolving like every place in the world. Here consumers want upward mobility, worldwide brands, quality and more styles. They see style when they travel, they see style on the internet, on TV and aspires to be well dressed and comfortable. I think consumers around the world and in India are growing more alike than ever in the past.
What is your global turnover and how much India contribute?
We are now 22 year old company and have clocked the revenue of $3 bn internationally this year and we anticipate doubling the revenue in the next five years. Our biggest growth comes from international markets. India is still one of the smaller markets for us and can become one of the significant markets over the next two or three years, simply because in India 300 million middle class consumers for footwear can double in the coming 10 years. Our goal is to be in the top three or four brands in India. We have just established the brand here and it has the potential to grow. Large part of our sale comes from metros.
Internationally we are growing by 30-35 percent annually and we anticipate growing by 20-25 percent next year.
In the next five years we see Indian market equivalent to China market. In China we will have 1500 franchisees this year so we understand what the model is and how it works very differently, because they all have shop-in-shop. In China we will be going from 200 million to 400 million consumer base this year. We have even gone in the world where we have got good franchisee partners open the stores by contributing some capital.