Why is Bata Betting Big on Franchising in 2021?

The footwear brand expanded home delivery to 1,200 Bata stores out of its total 1,500 stores in 800 towns.
Why is Bata Betting Big on Franchising in 2021?
Gunjan Shah

The Covid-19 pandemic has impacted consumers as well as businesses across the world. It has changed consumer behavior to a great extent and brands that have been nimble, resilient, and have adapted accordingly, have successfully carved a niche for themselves.

One such brand is Bata India which is betting big on expanding its reach through the franchise route. At present, Bata which has 234 franchise stores – out of which 100 stores were added during the pandemic – plans to increase the store count of franchise stores up to 30 percent in the next 2-3 years.

“New stores will mostly come from the franchise model,” asserted Gunjan Shah, CEO, Bata India.

The footwear brand is adopting a two-pronged approach, making sure that it is more and more accessible and easier for consumers to purchase, whether it's franchise or multi-brand outlets or digital.

The Next Big Category: Casuals and Sneakers

Amid pandemic, the work-from-home culture has changed the consumer requirements from formal footwear to more casual options. To match these changing expectations, innovating new product lines is the core part of Bata’s strategy.

The brand will soon be launching new products like sneakers under the brands - Hushpuppies and North Star.

According to him, consumers are now experimenting and are innovative. "We have just launched Hushpuppies originals, which is like harking back to almost designs of the 1970s and 1980s and is giving us very good response," he said adding "so there is a lot of creativity that you can bring in, which also allows you to give you the differential pricing and therefore margins."

Talking about the contribution of casuals in Bata's sales, Shah says, “It would be in the mid-teens, let's say from a portfolio contribution perspective till about one and a half, two years back, and that's now moved to about the mid-20s."

Sales of sneakers and other casuals have gone up 1.5 times in the last year, he adds.

Technology: Driving Innovation

This year, the brand focused on areas like product innovation, channel innovation, customer care initiative marketing campaigns, sales through its outlets along with e-commerce platforms and hyper-local digital channels like Bata Store-on-Wheels. All these initiatives helped in accelerating the growth of the brand.

“Bata store on wheels has been active in around 100 cities. Through endless aisle, a customer and scan a store, select, order and get it delivered at home,” he shares.

The brand also invested in new technologies like ticketing solutions, contact center partners, and e-commerce related processes to enhance the customer experience. 

“We look for contribution from e-commerce to be in double-digit in coming years,” states Shah.

The shoe manufacturer has launched Bata Chat shops across 800 stores last fiscal, where customers could chat and video with the local store managers for local delivery.

The footwear brand expanded home delivery to 1,200 Bata stores out of its total 1,500 stores in 800 towns.

What’s Next?

Consumer behaviors are changing after the pandemic and the market is moving towards casualization, online purchase, and value buy. There is a drop in discretionary spending and customers are more price-conscious and deal-seeking.

“So, going forward, Bata will be emphasizing e-commerce backend support and overall efficiency of reaching the consumer,” he shares.
 
The brand, which sold 3 crore pairs during the last fiscal, is serving almost 100,000 customers every day. The average selling price for the brand has gone up by 20 percent in the last four years.

“The youths between the 20 and 30 year age group are going to drive the disposable as well as the consumption going forward, largely centered in the urban markets,” he says.

"Metros are contributing to about 30 percent of our turnover and I think between the metros and tier I and II cities there would be 60 percent kind of a play of Bata," he adds.

The balance of 40 percent would come from the markets beyond Tier-II cities and towns as the brand is rapidly expanding its e-commerce presence in these cities and towns.
 

Gunjan Shah
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