The year 2023 will be the best ever year for Bata India as it will make its highest investments whether in terms of store network or into the brand. Gunjan Shah, managing director, and CEO, Bata India Ltd, told Shubhra Tandon that the company’s future growth will be equally divided between premium and mass products, and it will look at investing behind everything that gets the consumers to buy more of Bata products, buy more frequently and leads to customer additions.
How would you rate the year 2022 gone by?
The year 2022 was a year of resurgence for Bata. While we turned profitable last year, this year, we have surged ahead of the pre-pandemic levels. We saw a good traction on many of our categories especially premium as well as casuals and the sneakers. We also re-invested behind both our store network and refreshing our stores, expanding new stores as well as reignited all our marketing investments back into the brand after a gap of two years in Covid.
Inflation and supply chain issues dominated 2022 even as the Covid fear waned. How do you see these impacting business in 2023?
It is a VUCA (volatility, uncertainty, complexity, and ambiguity) world and volatility is a constant. We’ve got to expect the unexpected, but broadly we would say that commodity side remains stable or even maybe hopefully sliding down a little. We do not see Covid as a concern.
What is Bata India’s expansions and investment plans for 2023?
In 2022, we added roughly 120-125 stores and we hope to beat that count in 2023. The year 2023 is being looked at by us as by far the best year, and will see highest investments made whether in terms of store network or towards the brand. We want to further beef up and consolidate the strong growth that we have seen through our franchise network, the e-commerce vertical and multi-brand distribution vertical. We will also invest behind innovation for new products and styles.
Will store expansions be limited to urban centres or is there a plan for rural expansions too?
A large part of the franchise network will come up in the tier III to tier V towns, while company-owned stores will come up in the metros and mini-metros. Besides, a lot of hinterland access will be expanded through our multi-brand outlet vertical as well as digital commerce.
The year 2022 is the first year post-pandemic, what kind of changes have you seen in the customer behaviour that will shape the coming year?
Digital adoption has dramatically gone up. It’s not just e-commerce which has done well for us, but also the way the consumer consumes media and communications. We have progressively invested a lot more of our resources in digital mediums rather than the traditional, and that trend will continue. The second is the rise of casual footwear and sneakers as a category within that. While things opened up after Covid, and we saw a significant bounce back of traditional categories such as formal and office footwear, school shoes as well as wedding and occasion footwear, casualisation continues. So, in the long run we will make an endeavour to straddle both of them adequately for growth.
Premiumisation is a post-pandemic trend across all consumer categories, how do you see that impacting future products from Bata?
We’ve launched a whole bunch of products, with almost 250 sneaker studio stores within the Bata banner, and that has given a big lift to our sneaker sales over the year. We’ve got many stores that carry almost 300 styles of sneakers in different colours and usage occasions. On the casual footwear we have launched a new product called ‘Floats’— a premium, comfortable, durable, washable footwear. We are expanding that range and looking at it ambitiously going forward. We will also want to expand significantly our Hush Puppies network which has a lot of headroom to expand. We have also reinforced the stuff that needs to be done on the occasions, formal and office footwear.
Where do you see future growth for Bata India coming from premium or mass footwear?
Our growths will be equally divided between premium products and volume growths. We want more feet wearing Bata footwear as well as shoes that are driven by technology innovations which is premiumisation for us.
What were price hikes like in 2022, and will they continue next year?
We took double digit price increases in 2022. Unless inflation takes a different trajectory, we would like to make sure the pricing remains in check.
What is the demand outlook like for 2023?
While there are aberrations in certain segments and geographies but overall it looks promising. The inflation on the mass categories is what we are watching out for. But it will balance out in the medium term