“I firmly believe that with the right footwear, one can rule the world,” Bette Midler once said. Midler could not have been more correct. As a result, the style and choice of footwear have evolved in the last one-two years from formal to casual. “The casual footwear market in India, by and large, is a base commodity market. Brands such as Walkaroo and Paragon have grown their branded offerings out of this commodity sea. Literally, every footwear brand has used a film star or a sports star to be their front-face to jumpstart the commodity offering from commodity space to help in creating a good degree of awareness,” Harish Bijoor, founder, Harish Bijoor Consults, told BrandWagon Online.
In 2022, the market size of the footwear sector was $15 billion in India, as per a report by business intelligence platform, Statista. The report also highlighted that the size of the footwear market is projected to double by 2028. Interestingly, the share of casual shoes in the footwear retail market was highest at 68% in the fiscal year 2021. In comparison, the share of outdoor shoes was the lowest at four percent during the same year.
Furthermore, over 219 million pairs of footwear were produced in India during the financial year 2023. The highest production, with about 274 million footwear pairs, was observed in the financial year 2019. As per the report, Relaxo Footwear was the leading footwear brand in the country based on market capitalisation. When it comes to the share of men’s footwear in the footwear retail market, it was highest at 52% in fiscal year 2021. Comparatively, the share of women’s footwear was 38% and the share of kid’s footwear was 10% during the same year.
E-commerce v/s Retail
So far it has been a mixed bag for the footwear industry. While some players have hit the jackpot with e-commerce for a few offline stores have done the job. Not to mention, direct-to-consumer (D2C) brands have a more direct play, as the name suggests. “We work with several e-commerce channels while Flipkart and Meesho work best for us as both the platforms assist us in linking with our target audience. However, e-commerce and D2C contribute to approximately five percent of the company’s turnover at present as these are recent ventures of the company into new channels of distribution,” a Paragon spokesperson added.
According to the Statista report, the footwear retail market in India was valued at Rs 480 billion in the financial year 2021. This was a significant decrease as compared to the previous fiscal year. The market is estimated to grow to Rs one trillion by FY2025. In 2022, with over 1800 stores, Bata India had the highest number of retail stores among footwear brands across India. This was followed by Khadim India and Metro with 785 and 624 retail stores, respectively. The leading footwear brand, based on market capitalisation, was Relaxo Footwears in the same year.
Meanwhile, for micro footwear businesses such as Yoho Lifestyle and Crimzon World, e-commerce is considered the go-to marketplace. “We have a digital-first approach right now, and most of our sales come from online stores. We do have an offline presence but it is limited to certain regions. Right now, our split between ecommerce and retail is 98-2,” Ahmad Hushsham, co-founder and CEO, Yoho Lifestyle, opined.
The advertising game…
Industry experts believe that the best advertising format for the footwear brand is the point of purchase, which means being visible at every footwear retail point with the second best medium being television commercials, followed by digital and social media.
When it comes to spending on advertising and sales promotions, Relaxo Footwear’s spending increased by 25% to Rs 122 crore in FY23 from Rs 98 crore in FY22, as per BSE filings. The company however declined an email query sent by BrandWagon Online.
Similarly, Asics’ advertising expenditure grew by 60% to Rs 25 crore in FY23 from Rs 15 crore in FY22, as per the regulatory filings accessed by business intelligence platform, Tofler. The company believes that the brand face plays a pivotal role in embodying the essence of the company. “Through Shraddha Kapoor’s influence and reach, the brand’s message of fitness, health and active lifestyle reaches a wider audience. She brings credibility and reliability to the brand,” Rajat Khurana, managing director, Asics India and South Asia, explained.
Interestingly, Bata has not revealed its advertising spending in their Q3 results.
For Paragon, the primary focus lies in television advertising as it is the most impactful approach for them, while the company also focuses on digital, out-of-home (OOH) and print campaigns. “We strategically position advertisements in high-traffic areas to optimise our reach. The integration of strategically placed billboards with online strategies, including social media and digital ads, serves to enhance brand visibility to its fullest potential. Our exclusive stores also play an important role in our campaigns through in-store communication,” the Paragon spokesperson said.
For new footwear businesses, performance marketing on Meta is considered to work best on a return on investment (ROI) front. “As a business, we focus the majority of our marketing budget on these. Further, WhatsApp marketing is also growing as you can reach consumers at a very individualised level,” Sonali Dalwani, founder and creative head, Crimzon World, noted.
Number-play!
The revenue from operations of Bata decreased 1.28% to Rs 819.11 crore in Q3, 2024 against Rs 829.75 crore in Q3, 2023, as per BSE filings. Meanwhile, the company’s net profit declined 38% to Rs 33.99 crore in Q3 2024, when compared to Rs 54.82 crore in the same quarter of the previous year. “We have been witnessing a year-on-year growth with e-commerce contributing to 8-10% of the total business. Expanding our digital footprint, we are now reaching a milestone of 20,000 pin codes pan India through our D2C website. This penetration into tier-3 and tier-4 cities has unlocked immense potential, reflected in the surge of purchase orders from these regions,” Sharad Thakur, head e-commerce, Bata India, said.
Meanwhile, Relaxo’s revenue from operations increased 5% to Rs 2782.77 crore in FY23 from Rs 2653.27 crore in FY22. However, the company’s net profit declined 34% to Rs 154.47 crore in FY23 from Rs 232.68 crore in FY22.
Similarly, the revenue from operations of Asics increased 35.85% to Rs 340.85 crore in FY23 from Rs 250.89 crore in FY22. Consequently, the company’s net profit also grew by 37.74% to Rs 55.11 crore in FY23 from Rs 40.01 crore in FY22.
Consumer test
When it comes to the consumer, most of the industry players agreed that their consumers are from both the metropolitans and smaller towns while it is now their turn to expand the retail outlets in tier-2 and tier-3 cities. “Asics retail outlets contribute about 60% of the total business With that, we are focusing towards opening more stores in tier-2 and tier-3 cities,” Khurana said.
Paragon believes that e-commerce platforms have been a preferred channel in metro cities and that in-store purchases are more prominent in tier-2 and tier-3 cities. However, brands are witnessing a shift in consumer behaviour in tier-2 and tier-3 cities, as the customers adapt to e-commerce channels for shopping because of the increased internet penetration and convenience.
Reportedly, micro brands believe that people in tier-2 and tier-3 cities prefer online, as they do not have access to retail stores of big brands. “People in smaller towns are influenced by the fashion trends that are seen in metro cities and try to emulate the same result in being able to access these brands online,” Dalwani explained.