First, even as it is focussing its thrust on the export market, the group is also busy beefing up its domestic marketing network. It is planning its own exclusive showrooms styled ‘Revolution Stores’, with an initial investment of Rs 25 crore. This will be in addition to its already existing 360 exclusive showrooms spread across the country.
Second, it is enhancing its wholesaler, retailer and vendor network with a view to retain its leadership position. Third, it aims to increase its volume sales, seeing silver linings on the horizon and predicting that the industry will grow much higher than the current 3 to 5 per cent. In a calculative move, the group is enhancing its capacity by another 15,000 pairs at an investment of Rs 10 crore. A close look at how the group plans to implement its new marketing makeover.
Mr Adesh Gupta, executive director, Liberty Footwear, claims that every twelfth pair of footwear/component exported from India is from the Liberty group. This year, the company is expecting an export turnover of Rs 100 crore, a growth of 30 per cent over last fiscal. The company is expecting substantial orders from Western European markets especially Germany and Spain.
|Adesh Gupta (right), ED, Liberty Footwear and Adarsh Gupta, ED, Liberty Shoes|
It will not be an easy run through. The European market is extremely fashion sensitive and therefore, Liberty has to be very precise and timely on orders from those countries. The group is also exploring the possibility of setting up retail outlets as well as look for marketing partners in these countries.
Beefing up marketing
With the objective of giving exclusivity to Liberty brand, the group is in the process of beefing up its existing retail chain of 360 exclusive stores by adding another 10 exclusive company-owned revolution stores over the next two years. For this the company is making fresh investments to the tune of Rs 25 crore.
“The showrooms would be strategically located at prime as well as other locations including the up market shopping malls,” says brother, Adarsh Gupta, executive director, Liberty Shoes Ltd.
In a bid to keep abrest of the trend and technologies, the group has also been conducting regular training programmes for its employees, retailers, wholesalers and vendors apart from aggressively undertaking research at its own facilities. “Recently we organised a unique exhibitions both for our existing and prospective vendors, called Vendexpo,” says Mr Adesh Gupta. Adds Mr Adarsh Gupta, “all this goes into enhancing our product brand value.”
Liberty plans to lay emphasis on individual brands in the current year by studying each one separately and working out the growth prospect of each one of them.
With 11 sub-brands under the umbrella brand Liberty, the group will now be laying separate emphasis on each of the individual brands. Its leading sub-brand Gliders contributes around 40 per cent to volume sales (25 per cent in value terms) and FootFun 20 per cent (12-13 per cent in value terms).
“Even though Gliders contribute more, it is Footfun which is growing rapidly as it is mainly a children’s product and children need to change shoes more frequently as they outgrow and therefore we hope this segment will contribute more this year,” says Mr Adesh Gupta.
Mr Adesh Gupta believes that Liberty’s range of brands cater to all segments of the population including masses and still enjoys substantial brand equity. “Besides catering to the fashion needs of the classes, we have been able to reach the masses,” says he.
Eye on market share
The Gupta brothers accept that in an industry flooded with players in the unorganised sector it is very difficult to ascertain the market size as well as the market share of individual players. “ The industry guesstimate is that the domestic industry is worth Rs 10,000 crore of which one-third is the branded segment,” says Mr Adesh Gupta.
An early entrant in the footwear segment, the company says it today commands a 22 per cent marketshare of the domestic branded segment.
As far as growth is concerned, the focus of Liberty group would remain on a volume-led growth rather than through price hikes. “It’s a classic case of a pyramid where higher one goes the base goes on becoming smaller and that is not our cup of tea,” says Mr Adesh Gupta, categorically.
Liberty has been an aggressive player in the domestic footwear industry and adds as many as 1,000 new designs every six months. And the company has to apply different strategies for both the export and the domestic markets. “While the export market is fashion driven, the domestic market is price sensitive,” says Mr Adesh Gupta.
He adds that the international trend has to be studied carefully and products have to be developed instantaneously. However, in the domestic market the company has to keep prices in mind and therefore cannot afford to be too innovative. “We will never compromise quality for fashion in the name of innovation,” adds Mr Adarsh Gupta.
Breasting the tape
Today, the Guptas prefer to play safe. “ We will lay equal focus on the domestic and the overseas markets as we want to stand on both our legs,” says Mr Adesh Gupta. And in the export market the group is looking at more promising markets of western Europe. It has recently received a half-a-million pair of shoes from a leading German company, Romika GmbH. “ It’s a Rs 18-20 crore order an we hope to bag more of such orders in future,” says Mr Adesh Gupta.
The group is also expecting a breakthrough in the UK market soon. In the domestic market the group plans to stick to leather shoes, sandals and slipper and will target the middle to upper segment. The group is undeterred by the entry of Chinese players in the home market, which, according to Mr Adesh Gupta would hurt the unorganised sector. “Chinese players will mostly introduce synthetic products and will at best provide competition to the disorganised sector,” says Mr Adarsh Gupta.
In the domestic market, there is always a fear of losing the market to other players in the footwear industry, who have also been launching new range every season. However, the Gupta brothers are also clear about the pricing strategy and want to maintain the volumes. “ We don’t plan to raise prices substantially but would rather innovate and upgrade within the existing price range,” says Mr Adarsh Gupta who feels that the organised sector may grow by 10-15 per cent, if all goes well, from the current 3-5 per cent.
“The footwear industry has seen some of the worst years and I am optimistic that it will look up,” says he. Today, by trying to find the right balance between the domestic and overseas markets, it is trying to ensure that it remain in the race to be a winner.