Czech footwear and fashion retailer Bata has been revamping its portfolio in India, to include more casual wear and sneakers. This segment now accounts for 25% of total sales. Gunjan Shah, MD and CEO, tells Akanksha Nagar how online retail has become the fastest-growing revenue channel for Bata India, even as it has ambitious expansion plans for offline stores. Excerpts:
In FY22, Bata clocked `2,387 crore in revenue. What will drive growth in FY23?
The company will continue its focus on key areas of franchise and MBO (multi-brand outlets) expansion, communication, portfolio casualisation and digital footprint expansion. We have seen good traction in casual wear. So, a lot of work is going into ‘sneaker-isation’ and ‘casualisation’ of the entire portfolio, for which we also have launched sneaker studios. We currently have over 100 of these studios (like shop-in-shops) with 300 styles of sneakers, across nine brands. Sneakers led our growth in the last fiscal and contributed up to 25-30% to the total revenue, which was 15% pre-pandemic. We not only expect this growth to continue, but want to beef it up with the expansion of not only studios but also new collections. We expect the sneakers category to keep driving our growth for this fiscal.
Accessories account for 8-9% of the overall revenue. We plan to give additional impetus to it, especially to the ladies’ handbags category. Therefore, the company is developing a lot of local capabilities to turn around designs and fashions much faster. We endeavour to grow to double-digits, soon.
Bata’s online sales last fiscal were more than double that of its pre-Covid levels. What are your plans on beefing this up?
While we sell both via our site and e-tailing marketplaces, we have a home delivery service, too — where, in case a product is not available in one store, it gets picked up later from another store or a warehouse to be delivered at the customer’s doorstep. Also, we have a store on Facebook and are targeting consumers on Instagram through aggressive influencer marketing for all our brands. The online channel is now the fastest-growing revenue channel. We are present across all key marketplaces. A major chunk of the revenue comes from home delivery and online marketplaces; the balance is contributed by our own website.
Has footfall in physical stores returned to pre-Covid levels?
Our offline sales currently account for 90% of the revenue, where 75% is through owned and franchise stores and 15% through MBOs. The footfall trends are improving significantly, and are growing in terms of consumer confidence, every week. I don’t think footfalls will be a constraint. To gain more traction, we have refurbished a large part of the network in the last six to eight months.
We currently have 1,400 exclusive outlets, and more than 25,000 MBOs. The plan is to expand through the franchise channel more aggressively. At present, we have 303 franchise stores and aim to reach 500 stores in the next two-three years. The first milestone is 400 stores, which we should definitely attain by next year.
Besides this, we have five experience centres, two in Mumbai, and one each in Bengaluru, New Delhi and Kolkata. We aim to open more of these centres in metros and mini-metros. In the last six months, we have ramped up the number of sneaker studios and aim to have 200-250 of these by the end of this year. These are not geography-specific and are spread across the country and across networks—we have a separate microsite for this.
In addition to offline expansion, depending on the location and consumer segment, we are also focussing on customising merchandise to penetrate deeper into markets.